“Let’s raise the minimum wage! These workers can’t support their families and need a higher wage!” The people chant.
They’re right: People can’t support their families. It’s a tragedy that one of the richest countries in the world can’t afford to feed every child, but raising the minimum wage won’t help the situation in the slightest.
If we raise the minimum wage, prices of everything else will go up with it. Not instantly, but prices will gradually raise, which eventually will lower the value of a dollar. Lowering the value of the dollar will cause your paycheck to not go as far as it used to.
As well as prices increasing, the demand for labor will decrease. Meaning the employers will be looking to minimize their staff size, not enlarge it, causing wide-spread unemployment. And while they are not hiring new people, the prices will also be higher.
Now, I don’t want to sound callous and mean, but as a minimum wage worker I know that raising my wage against the will of my employer will do nothing but cause harm to my employer and myself. Say the minimum wage was raised to $15 tomorrow, by the end of the year instead of a loaf of bread being $4 it will be $7, and a cup of coffee will be $9 instead of $5. This happens because the owners need to make up for the influx of money that’s going to their employees’ paychecks.
From a small business standpoint, owners will consider jacking up the prices of their products, some will choose to cut the hours of their employees as well as even terminate positions. They have to make up for the money they are now putting towards their employees’ larger paychecks. As an employee of a somewhat small business, my paychecks might have a larger number on them but they will just go as far as my current paychecks, or less depending on the reaction of my employer (e.g. cutting my hours), as well as society’s reaction because everything will be more expensive.
Other effects of raising the minimum wage would be an increase in unemployment and a raise in high school dropouts. Teens would see the raised minimum wage and believe if they dropped out of high school, they could make a decent salary because they could work full time. Once these teens grow up, they will want more than minimum wage and demand more, but since they don’t even have a high school diploma they can’t go anywhere, causing the employer to hire new teens, who will work for minimum wage, and for the drop-outs to be unemployed.
This problem is already bad enough. Oregon has one of the highest dropout rates in the country. In 2013, we were at the very bottom, with only 68.7 percent of teens graduating from high school. Employers won’t be looking to hire as many people as they would have before, because they have to pay each employee even more.
In the United States, the federal minimum wage is $7.25 an hour, but Oregon has raised it to $9.25. We are one of the 30 states who have minimum wage above $7.25. We are already paying higher than several other states and experiencing the highest rate of high school drop-outs.
We don’t need to worsen the problem. It would not be in the best interest of most people or a good long term solution for poverty to raise the minimum wage.