In the article, Ben
Rooney reports that San Francisco in California has become the second United
States city to raise its minimum wage to $15 per hour. The other city to
already do so was Seattle in Washington. The reason behind the increase is to
increase the workers living wage, or the minimum income for a worker to meet
their basic needs. The Mayor of San Francisco, Edwin Lee, believes that this
push will narrow the gap between the rich and poor in the city.
The previous
minimum wage in San Francisco had been set at $10.74 per hour, a 140% increase
in wage. The ballot was approved by the majority of voters yesterday at 77%
compliance with raising the minimum wage. However, the law will not be
effective immediately. The wage will rise slowly starting in 2015 and finally
reach $15 per hour by 2018.
Other states that
also made changes to their minimum wage laws include Alaska, Arkansas, Nebraska,
and South Dakota. However, their increases were not as drastic. The motion to
raise the national minimum from $7.25 to $10.10 an hour has not made it out of
the Senate. President Obama has mandated that companies with federal contracts
increase their minimum wage to $10.10.
If the government increases
the minimum wage, this will cause some wage rigidity problems. Specifically, it
will increase the structural unemployment. If employees are paid more, companies
may not be able to employ as many workers.
I think easing into the increase in minimum wage by gradually increasing each year will help with structural unemployment. If the cost of labor doesn’t increase dramatically right away, employers will be less likely to fire a bunch of workers right off the bat. I assume that San Francisco has an above average cost of living, so I believe an increase in minimum wage will be good for the city’s economy with a lot of people earning a little more money.
ReplyDeleteIt's always nice to see minimum wage go up in our country since so many people live below the poverty line. However, i think increases should be made year by year. I think this is the best way to do it because it could prevent businesses from firing people because they have to pay more for one employee. I also believe that doing it year by year would give workers incentive to work hard and increase their production.
ReplyDeleteRaising minimum wage also increases overall production costs for companies. Companies may have to fire workers to compensate for the increase in overall production costs. Thus, it will be interesting to see if overall unemployment increases in San Francisco due to the increase in minimum wage.
ReplyDeleteI think that the wage raise in San Francisco was definitely needed. The cost of living there is much higher than it is in other places, same as Seattle. The minimum wage is a sticky thing that has many rippling consequences and needs to be dealt with carefully. In a perfect world, I'd propose that minimum wage be calculated by the cost of living in each city or county, so that each and every person making minimum wage would also be making a living wage.
ReplyDeleteThe minimum wage is always a touchy issue and will obviously cause some changes in unemployment. It's interesting how we learned in class how the change in minimum wage does not necessarily improve conditions overall. It will be interesting to see the results of the minimum wage increases in these cities
ReplyDeleteThis sounds great and all for the citizens of San Franscico, yet you have to look at what is this going to affect besides a rise in income. As the price per worker goes up the expenses of food and every day services will rise along with it. The mayor may have a point that it could narrow the gap of the rich and the poor but it will increase a part of the unemployment because these companies won't have enough to pay their employees.
ReplyDeleteFrom reading the article, it seems living in San Francisco is relatively costly compared to other cities. I believe the mayor made the correct decision by increasing the minimum wage to $15 per hour. However, a wage increase doesn't necessarily mean higher standards of living. Other comments address this in terms of goods and services increasing in accordance to the minimum wage therefore we're back at the starting line. It will be interesting to see how this plays out over time.
ReplyDeleteThe increase in the minimum wage in San Francisco seems beneficial since the city has higher costs of living compared to most places in the United States. However, an increase in the minimum wage typically leads to higher unemployment. I wonder how many people actually made below $15/hr in San Francisco before, as this can help predict how much of an impact this change will have on the unemployment rate.
ReplyDeleteIs there a specific reason for $15/hour being the aiming point for these reforms? I feel like such a drastic jump will make structural unemployment a serious problem had they not implemented the gradual increase until 2018. I would be curious to see how something like $10/hour and $12/hour would affect the economy and living standards before setting the ending point at $15. I'm sure this was taken into account when proposing the change but I think it is still a big leap even when easing into it.
ReplyDeleteAn increase in minimum wage in any state is always beneficial and hard to argue as a negative. I think in particularly for California and Washington, it makes sense that it's been raised to $15/hour because they are, after all, two of the most expensive states to live in the U.S. I couldn't imagine how people are living comfortably or above the poverty line if their making the same as what workers make in states that have a lower cost of living.
ReplyDelete