In the
article “Chicago hikes minimum wage to $13,” the author Katie Lobosco writes
about the recent vote to raise the minimum wage in the city. However, a minimum
wage of $13 will not be fully in effect until 2019. The wage will increase over
time from $8.25 to $13 over the next five years. The first increase will take
place in July of 2015 when the minimum wage will increase to $10. Wage for
workers who are allowed tips will also see an increase from $4.95 to $5.95 an
hour. It is expected that the increase in wage will affect over 400,000 workers
and help remove almost 20% of those workers from poverty.
The wage increases was easily
passed by a vote of 44 to 5 in favor of the increases. While the Mayor of
Chicago, Rahm Emanuel, supported the raise, chambers of commerce and
restaurants are concerned that it may reduce the number of low wage jobs.
Other major cities like San
Francisco, Oakland, and Seattle also approved minimum wage increases over the
next several years this fall. Statewide, Alaska, Arkansas, Nebraska, and South
Dakota have passed increases to their minimum wages to join 12 other states and
Washington D.C. that had already done the same. At a national level, talks
about raising the national minimum wage to $10.10 from $7.25 have stalled.
It is great to see the minimum wage increasing for those that work at this pay level, however; a question that arises for me is whether or not this increase will effectively relieve 20% of those workers out of poverty. Given that the plan won't come into full effect for 5 years, and in that time prices and cost of living can easily increase, will this 20% relief hold true?
ReplyDeleteI think the decision to increase the minimum wage looks really appealing on the surface. It is important to remember, however, that an increase in minimum wage not only puts low-skilled, low-educated workers at risk of losing their jobs, but so, too, does it prevent those who most need a job from getting one. Ultimately, I do not think raising the minimum wage is the best way to reduce poverty.
ReplyDeleteFrom when the policy is implemented (2015) to when it'll be competed (2019), it will be interesting to see how prices will be impacted in the relevant industries.
ReplyDeleteThis increase in minimum wage is an interesting decision as although it would decrease the number of discouraged workers and increase the labor participation rate,but the employment opportunities might not be as many as the labor supply.
ReplyDeleteAlthough there are potential risks, there is still a benefit from this wage raise: there will be a lot more people and families who will be above the poverty line, and that is never a bad thing. It's also good that it is going to be a slow and gradual process, because the consequences can be seen, and maybe a change can be made if necessary.
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