Big Businesses hit back on Minimum wage
A recent government report that was released has estimated
that a bump in the federal minimum wage could potentially cost the U.S. economy
half a million jobs. President Obama has been lobbying for congress to increase
the hourly minimum wage from 7.25 to 10.10 dollars. On a positive note, the
increased income is expected to lift around 900,000 Americans above the poverty
line. The article explains the strategy
of large firms battling against the president’s initiative.
Research shows that “Several big restaurant
companies -- including YUM! Brands, which owns
Taco Bell, KFC, Pizza Hut; Darden Restaurants which
owns Olive Garden and Red Lobster; and Cracker Barrel Old Country
Store directly lobbied against a bill to raise the minimum wage
last year”. Both companies have fore warned “investors that an increased
minimum wage would adversely affect profit margins, according to SEC filings”.
http://money.cnn.com/2014/02/21/news/economy/restaurants-minimum-wage/index.html?iid=SF_E_LN
This brings up an interesting dilemma would one prefer more americans with a higher standard of living but also more americans without jobs or a larger mass below the poverty line? In a age where technology is exploding I personally do not think it is a smart idea to raise minimum wage and threaten the jobs of people who may be compromised by machines.
ReplyDeleteThis issue has been an interesting debate lately. On one hand, lifting 900,000 Americans above the poverty line is a major accomplishment for the Obama administration. It has been shown on many accounts that, minimum wage alone, cannot support a family of 4. With this being said, the other hand is that many of these employees and future labor force will not be able to enjoy the benefit, especially the teen labor force. I think the best option is to find a middle mark that allows the least risk for unemployment while still benefiting those earning, or future earners, of the minimum wage.
ReplyDeleteOf course businesses don't want the minimum wage going up because then their costs go up. Is the rise in minimum wage good sure higher income, is the job loss bad yes but it happens. That is why it is to go up slowly. I like the idea of the minimum wage going up. With inflation wages must go up in order to keep people out of poverty. The idea of raising people above the poverty line is good, job loss is just a necessary consequence that of course is going to happen but wont be too bad in the long run.
ReplyDeleteIt makes sense that businesses would be opposed to this rather large jump in minimum wage. Though it may not seem like a lot, food service industries especially run on a tight budged and having to allocate a higher percentage of profits toward labor costs could severely cut into their profits.
ReplyDelete