Yes, No, Maybe So – Minimum Wage

0
94
Minimum wage is one of the biggest dialogues of our time. In this article, Nell, Keegan, and Sam discuss whether the minimum wage should be adjusted for inflation. Photo courtesy of: unsplash.com

At Opinion, we celebrate the wealth of viewpoints that makes this section what it is. Some concepts, however, are too big to do justice with just one voice. In this segment, we want to make space for the Yeses, the Nos and the Maybe Sos of the biggest dialogues of our time.  

Today’s question: Should the minimum wage be totally adjusted for inflation? 

Yes (Nell Srinath, AOE): According to the Center for Economic Policy and Research, the federal minimum wage if it had increased with inflation and rising productivity since 1968 would hover around $21.50 per hour — a whopping $6.50 over already controversial proposals to raise the federal minimum wage to $15 per hour. With inequality continually on the rise in the United States, a cruel reality punctuated by the $5 trillion (with a “t”) increase in the wealth of billionaires during the devastating COVID-19 pandemic, the working class deserves drastic and immediate restitution for enduring unlivable wages while putting their lives on the line to provide goods and services to the rest of the population.  

Of course, it would be silly of me to assume that this pool of funds can just be pulled out of thin air; after all, don’t we have a national debt crisis to worry about that is sure to come to a climax someday? With this question in mind, it is worth knowing that more than half of all deficit spending is funneled towards bolstering the war industry, which also devours more than $810 billion of the federal budget for fiscal year 2023. Federal lawmakers can simply consider subsidizing a minimum wage increase by drawing money from the military-industrial complex, the police state and more than $20 billion fossil fuel subsidies to support firms in their pay increases for workers earning minimum wage. This would constitute one of the only times that U.S. economic policy has opted to valorize life instead of degrade it. 

No (Keegan Reck, SW): There should be no further increases in minimum wage in general. When the government introduces more wage regulation, it imbalances the labor market by artificially pushing up the lowest wages with many consequences – less jobs, further increases in inflation and ultimately a higher cost of living to Americans.  

It is nonsensical for wages to be mandated at the rate of inflation. Inflation is the result of the economy attempting to correct itself. Increasing the minimum wage dependent on inflation will only exacerbate the current causes of inflation – increasing regulation on supply, the main driver of inflation currently, through higher labor costs will create an endless spiraling effect of wages perpetually trailing an upward moving inflation.  

Furthermore, raising wages will disrupt the already precariously balanced labor market. Firms simply will not be able to hire as many low wage jobs as they try to balance out aggressive wage increases. Increasing minimum wage further pushes out new firms who struggle to pay labor costs. By increasing the wage these firms have even less ability to compete and in some cases become entirely excluded from the economy, which decreases jobs and economic output. Though some studies claim there are productivity increases and benefits from raised minimum wage, it has been found in a review of employment studies that generally minimum wage increases have negative employment effects. The consensus among economists is consistent: most oppose wage increases and agree wage increases will have negative consequences.  

Maybe so (Sam Zelin, ME): While both a firm yes and a firm no to this question have their merits, the logical solution is to merge the benefits of both into a nice middle-ground option. The federal minimum wage currently sits at $7.25, and that presents two issues: First, that is a significantly smaller number than the minimum wages of states like New York, which currently has its number set at $15, and second, the jump from $7.25 to $21.50 would mean having to find a lot of money instantaneously to pay people the new rate. 

To find a solution to this, all one must do is look to the example currently being set by states like Connecticut, where the increase is applied gradually. 

Connecticut plans to get to $15 by 2023 according to the state’s official website, and some states like Florida (which plans to hit $15 by 2026), are also doing this. 

At the very least, there need to be some changes to minimum wage, in the fact that eventually all states should have a plan for getting to the $15 mark. The fact that according to an Aug. 30 report from the National Conference of State Legislatures, only “30 states and Washington D.C. have minimum wages above the federal minimum wage of $7.25 per hour,” is simply not OK. 

Once all states have planned to raise above the federal minimum wage, and then eventually there are plans in place to get every state to $15, the conversation should still continue from there. Inflation is never going to halt completely, so in short, there should just be a continual plan to raise the minimum wages nationwide. They don’t necessarily have to keep pace with inflation, as that’s likely not feasible or stable, but there should always be an ongoing effort to move it forward. 

Leave a Reply