As college students we all face a common battle. Lack of money. We work hard for our dollars but seldom find our bank accounts full. This is mostly because a majority of workers our age are employed in minimum wage jobs.
Like most Americans I enjoy the idea of Capitalism. You are rewarded for the work you put in. If you succeed it was because you were skilled and determined. However, my paychecks do not show how skilled and determined I am.
Employers want to pay us the minimum wage to save money and because they know they can. We aren’t going to quit when jobs are scarce, therefor, they know that they can pay us nothing and get away with it. Or they hid behind the myths that raising the minimum wage would be bad for the economy and job market. Well it’s time to learn the truth.
Minimum wage was first brought about during the Great Depression under the Fair Labor Standards act. At the time it was .25 cents an hour. Since then it has increased to $7.25, which seems like a large amount. However, due to inflation, the current value of $7.25 is nowhere near what workers should be paying. To raise the value to be equal to the 1968 minimum wage we would have to raise it to about $10. This information and more can be found in John Wihbey’s article “Effects of raising the minimum wage: Research and key lessons”.
Most critics would say that raising the minimum wage would only offer negative consequences. For example, businesses would start seeing hardships, unemployment would become more prevalent, and prices on goods and services would see an increase. The University of California, Berkeley’s Institute for Research on Labor and Employment have recently published two papers on the subject of minimum wage proving that raising it would not be as bad as everyone thinks.
In their first paper “Do Minimum Wages Really Reduce Teen Employment?” they focus on our age group, whom make up one fourth of the minimum wage workers. They studied data gathered from the government’s Current Population Survey from 1990 through 2007 to analyze minimum-wage impacts and found that raising the minimum wage resulted in no dramatic loss of employment. The teens they studied did see a slight loss of hours in a week, however, this loss was balanced by the increase in pay.
In their second study, “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties” they discussed how these effects can be seen over a broader area. This study also found no significant employment loss in counties with raised minimum wages. The researchers at Berkley believe this is because higher wages attract more workers and in turn reduces the vacancy rate of the companies. They also found increased productivity of the companies and cost reduction for expanding their employment.
Now if you are still concerned about the effects on the businesses themselves, Paul Krugman in his New York Times article “Power and Paychecks” makes a comparison of two major superstores, Walmart and Costco. He says, “The classic comparison is between Walmart (with its low wages, low morale, and very high turnover) and Costco (which offers higher wages and better benefits, and makes up the difference with better productivity and worker loyalty). True, the two retailers serve different markets; Costco’s merchandise is higher-end and its customers more affluent. But the comparison nonetheless suggests that paying higher wages costs employers a lot less than you might think.”
All in all it is clear to see that raising the minimum wage would not be that damaging. As a college student I know that I could definitely use a couple more dollars in my wallet, and if I was offered more money it would definitely act as an incentive to work a little harder. Which would benefit my employers. I am looking forward to the progression we are seeing with this subject and I hope that we can all start to benefit from a higher minimum wage soon.