In recent news, Governor
Chris Christie of New Jersey vetoed the state’s bill for a raise to $15 minimum
wage. Governor Christie called the bill a, “really radical increase” that “would
trigger an escalation of wages that will make doing business in New Jersey unaffordable.”
Counters to Christie’s argument say the current minimum wage is unlivable, and
that raising minimum wage will give low-wage workers more money to spend. The
logic is undeniable, however just because more money literally means more
money, that does not mean that standard of living will suddenly rise and
businesses will thrive. Economist Tim Worstall said, “Human labor really is an
economic good like pretty much all of the others. Raise the price and the
demand for it will drop.” In the recent case of $15 minimum wage raise,
Seattle has not been the golden example as hoped for by liberal politicians.
Many businesses, especially restaurants, have closed down due to inability to
keep up with the enforced high hourly wage rate. Forbes says, “shut-downs have
idled dozens of low-wage workers, the very people advocates say the wage law is
supposed to help. Instead of delivering the promised “living wage” of $15 an
hour, economic realities created by the new law have dropped the hourly wage
for these workers to zero.” Another problem is that these low-wage workers used
to have multiple jobs, but now, with $15 minimum, they make a little too much
to receive government aid but still not enough to truly live comfortably. I
would have to agree with Governor Christie’s decision to hold off of such a
drastic raise.
I think it's interesting that the minimum wage debate has been so centered around $15/hour, more than a two-fold increase over the current $7.25 at the federal level. I would think there has to be something in between that would have a much less severe impact on businesses while still raising workers' standard of living. I agree with governor Christie that $15 is "radical", but I also don't think that means there's nothing to be done.
ReplyDeleteI think it's interesting that the minimum wage debate has been so centered around $15/hour, more than a two-fold increase over the current $7.25 at the federal level. I would think there has to be something in between that would have a much less severe impact on businesses while still raising workers' standard of living. I agree with governor Christie that $15 is "radical", but I also don't think that means there's nothing to be done.
ReplyDeleteI would agree with the above comment. $15 is such a huge change so why not start out with something a little less drastic? When you first hear minimum wage is going to increase I think the initial thought is that it's a good thing. But what about the repercussions of that? People probably tend to think about the effects in the short run and don't think about the effects raising minimum wage would have in the long run. With the quote from the article about the demand for human labor decreasing as the price increases, I can only see this creating problems. Yes, people cannot live off of minimum wage as it is currently, but they also cannot live off of nothing. Less and less people are going to be hired because companies are not going to be able or willing to pay their workers nearly twice as much as they are now. So in the long run, could this mean higher unemployment? It could also mean an increase in the cost of living or in the cost of goods. How can companies be expected to pay the same number of employees twice the money? If they were to increase minimum wage I think it just needs to be a gradual change that happens over time.
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ReplyDeleteI think that the idea of changing the minimum wage rate to $15/hr is good, but again this should be a gradual change. Over time businesses could create the means to be able to afford that rate; however, a change this drastic would hurt the economy in the long run. New Jersey made the right call to veto this bill.
ReplyDeleteClearly, this decision is a trade-off between employment and wage growth, and there are pros and cons with each. The Fed continuously cites lack of wage growth as a sign that the economy hasn't fully recovered yet (even with a solid unemployment number). Overall, this means the lower class still suffering from slow economic growth, regardless if it's due to wage or lack of a job.
ReplyDeleteI'm curious to see if this movement to raise to $15/hour retains its momentum following the presidential candidates solicitation of the low wage populous vote. According to hetitage.org, the federal minimum wage has never been higher than $8.55 per hour (adjusted for inflation).