Sunday, February 9, 2014
As Minimum Wages Rise, Businesses Grapple With the Consequences
There has been a lot of talk recently about raising the minimum wage of workers across the country in order for it to be a more sustainable income. While at first glance it may sound like a good idea to many people there are many things that will happen in response to this. This article discusses many situations of how this will affect the economy. A large focus of which tends to be on the small business side where for example, raising the wages of the workers very well may put some out of business because there isn't an increase in revenue to handle the increase in wages. It is noted in the article that currently the federal minimum wage of $7.25 when adjusted for inflation is about 23% lower than the wage in 1968. In my opinion there should not be a raise in the federal minimum wage as I do not believe it would be beneficial to the economy in the long run.
http://www.nytimes.com/2014/02/06/business/smallbusiness/as-minimum-wages-rise-businesses-grapple-with-the-consequences.html?ref=economy
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I agree that this may put strain on some businesses at first. However, I think that this will translate into our enormous lower class actually having money to spend, thus increasing revenue for businesses in the future. It's scary to think that the average age of fast food workers in the U.S. is now 29. And the fast food companies and other large companies such as Wal-mart can certainly afford to increase the wages of their employees. The minimum wage in this country provides millions of people with no social mobility and they are forced to suffer from day to day working harder than lots of other wealthy americans while making a fraction of the money.
ReplyDeleteI agree with Ms. Rothschild's perspective: “I believe part of our costs in running a business includes investing in employees.” I think raising the minimum wage is crucial at the moment. We need to adjust our wages for inflation just like we adjust our prices.
ReplyDeleteWhile it is true that higher wages could be beneficial, it is also true that some companies can not afford to pay more than they currently are paying. Thus, a raise in minimum wage could put some good companies out of business.
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