The governor of California also recently signed a bill that will raise the minimum wage in the state from $10 to $15 by the year 2025.
I have concerns for these minimum wage hikes. While these are places with high costs of living, I don't know that this is the right solution for the issue of low wages. Because the wage increases have to come from somewhere, companies will have to raise the prices of their goods and services in order to be profitable. A solution that I see as viable is to provide better educational programs so that people can learn the skills that they need to advance into higher paying jobs.
New York is following in the foot steps of other areas increasing the minimum wage. So far studies have shown that the increase to $15 has not had much of an effect on the price of goods being consumed. However, every location is different, and so are the companies. This will be something to follow in the future to see the outcome.
ReplyDeleteI agree with you on the educational programs route versus just increasing the minimum wage to $15. Lots of companies now provide discounted routes and sometimes even free routes to getting a degree as long as people graduate, maintain a certain GPA, and stay with the company for a certain number of years following their graduation. This is a much better option for workers in order to gain a higher paying job as well as to better position themselves for the future if they were to ever change jobs or move to another part of the country.
ReplyDeleteThese minimum wage hikes are not going away by any means. England has just passed a future minimum wage hike, and economists are suggesting that it will end up helping the upper class more than the lower class, who are supposed to be the main benefactors of the minimum wage increase. It is a bit alarming that more states are beginning to seriously consider these wage hikes, but I guess we'l have to wait and see what the final outcome is.
ReplyDeleteI agree with Jamie in the fact that prices have not increased. At least thus far throughout the areas with increased minimum wage. However, increasing the minimum wage is un-debatably going to increase costs for a firm. So how are these costs dealt with in areas of increased minimum wage? Some arguments are say that in many cases workers are just eliminated. For example in France when the minimum wage went up grocery stores eliminated jobs such as labeling prices and daily stockers. So I tend to lean in the camp of Hope that this worries me. In addition, if all states follow suite in raising the minimum wage there will be inevitable inflation.
ReplyDeleteThe cost of living is so incredibly high in New York (in general) that the increase in minimum wage is ultimately a good thing. What I wonder is how useful California's minimum wage increase will be. in 9 years it will $15? at that point, that money will have the same purchasing power as the current $10 minimum wage. I respect them not rushing into it, but 9 years is probably too long. New York's plan to have the legislation in affect by the end of 2018 is the right amount of time.
ReplyDeleteI am not sure how beneficial an increase in the minimum wage will be. As others have said, it is likely to increase costs to the firms. This may cause firms to stop hiring and may lead to higher rates of unemployment. With higher minimum wages, the cost of living is likely to increase. With these effects, the increase in minimum wage may do more harm than good. I agree with you that targeting the problem in a different manner may be a better idea. Although, funding for an educational program may open up an entirely new set of problems to worry about.
ReplyDeleteI think that there are clearly both pros and cons to the raising of the minimum wage like most events in economics. From a moral point of view, it would be frowned upon to say that one should not raise the minimum wage, especially in places like NYC and CA where the cost of living is so high, and there is such a huge amount of income disparity amongst the citizens. At the same time, I feel like the cons of the raising of the minimum wage may outweigh the good in some aspects such as the unemployment of laborers when businesses cannot afford to pay all of their workers, and the increase in the prices of the economy overall in the short run. I agree, however, that something does need to be done in order to give people more opportunities to work in higher paying positions; I think that retraining workshops and educational trainings could possibly be a step in the right direction.
ReplyDeleteI agree with Hilary how there are both pros and cons of raising the minimum wage. It is beneficial in these cities that have high costs of living. What also must be a focus during these wage hikes is inflation. If inflation is increasing at the same rate as these wage increases, than people are really not benefiting from higher income because they are still spending the same proportion of that income. I think the increases in wages should be influenced or determined by inflation.
ReplyDeleteThe minimum wage does not affect most labors. Only labors without high skills or experiences would be affected. The unemployment rate of course would decrease, but not that large. I agree that inflation also plays a role in the increase in minimum wages.
ReplyDeleteI am curious to see what comes of this. With such expensive states like New York and California, I wonder what the relative wage is to ours. Maybe that's what they're already accounting for when they adjust it. I agree that the increase in the California minimum wage seems a bit slow, and it may actually be below inflation, I don't know.
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