This week, there have been protests in Oregon for increasing the minimum wage from $9.25 an hour, to $15 an hour, the main argument being that $9.25 an hour isn’t enough money to live on. A lot of people are happy about this idea, but a lot of people are not.
This isn’t a new debate. Economists have been arguing about the pros and cons of a minimum wage since…I don’t know, since the concept has been around, probably.
I read an article this morning that argued the the $15/hr supporters were ungrateful and lazy. I didn’t take it seriously at first but after reading the comments under the article and the amount of likes it got on Facebook, I realized that this is something that quite a few people genuinely believe.
Whatever you believe, you should be informed, so here are my two cents, as someone who has both studied economics and worked in retail.
1. Minimum wage is a social safety net, not the work of the economy.
Minimum wage was made to ensure that people who work will make enough money to support themselves. Minimum wage is supposed to be the lowest income a person can make and still make rent, feed themselves, clothe themselves, pay the bills, and provide for their family. Not glamorously: they’re not going to be going out to eat or getting the new iPhone or taking tropical vacations, but if they live simply, they are still able to live.
Sadly, minimum wage is not that. The cost of living is way higher than what a minimum wage of $9.25 an hour will provide for. If you’re a teenager looking to save up for a car, $9.25 is plenty. You could live just fine without any income. But if you are supporting yourself, you can’t live on just one minimum wage job. You end up having to get two or three, and even then you’ll probably need food stamps.
2. The “Fast food jobs aren’t worth $15 an hour” argument.
No, no they aren’t. But that isn’t really the point. Minimum wage has nothing to do with what jobs are worth. It’s about making sure people can support themselves with the amount of money they earn.
3. The “But economics!” argument.
Trust me, you don’t want to live in a society run by unguided economics. Economics is amoral–it’s a social science–and its only goal is perfect efficiency. Social programs are not efficient. If society was run purely on economic principles, there would be no minimum wage, no child labor laws, no retirement.
The most efficient way for companies to run would be to offer some jobs that only pay $0.01 an hour, and to have their workers work until they physically can’t anymore, at which point they would get rid of them and hire new, young workers.
That’s a dystopia. Humans value things like rights and dignity. We know that sometimes you have to sacrifice efficiency for social and ethical reasons.
4. The “Minimum wage jobs are temporary and therefore shouldn’t be comfortable” argument.
There probably aren’t many people who aspire to a lifelong career as a minimum wage employee, but there’s a difference between “comfortable” and “a liveable wage.” There’s a difference between being able to afford a fancy new car and being able to afford an apartment in a safe neighborhood.
5. The rising prices argument.
Prices will rise whether or not minimum wage increases because of inflation. You can’t choose not to provide a liveable wage because the price of milk will increase. Besides, there will be less people buying milk if they don’t have money to buy food. As I read somewhere, keeping a large portion of the population in poverty isn’t good for society.
6. The rising unemployment argument.
This is the most convincing of the arguments against raising minimum wage, in my opinion. As minimum wage increases, so does unemployment because employers are forced to hire less people. This means that more people will not have jobs and will have to depend on government help.
But on the other hand, people trying to live on a minimum wage still need help from the government because while they’re working, they still aren’t making enough to support themselves.
If the government were to make $15 an hour the new minimum wage, there would be some bad backlash, I’m sure. Unemployment would probably spike, prices would increase, people would be unhappy. But the way I see it, the current level of minimum wage isn’t liveable. It will have to be adjusted eventually and the yearly adjustment for inflation isn’t going to cut it. Whether $15 an hour is what it would need to be raised to, I don’t know. But it does need to be raised.