Raise in the Minimum Wage

I worked as a busboy, a movie theatre usher, pumped gas and delivered newspapers. None of those jobs paid enough to raise a family. All of those jobs were appreciated.

The State of Illinois is planning on raising the minimum wage with a goal of $15.00/hour by January of 2025. The City of Chicago has ordered that the minimum wage within the city be raised to $13.50/hour for employers with 4 to 20 workers and $14.00/hour for employers with 21 or more workers effective July 1rst, 2020. How many Chicago employers currently paying 20 minimum wage employees do you think will hire more with this rule in place? How many employers with 21-25 minimum wage employees do you think might be inclined to reduce their work force if possible?

There are many articles supporting both sides of the arguments about raising the minimum wage. I have heard the complaint that you can’t raise a family on what Walmart or McDonalds pay their employees. That might be true. Counter arguments include cautions that if the minimum wage goes up there will be less jobs available. When I owned my own business. I hired two guys to clean up and paid them minimum wage. I would not have paid them any more because my budget wouldn’t allow it and the work was basic, sweeping floors and emptying garbage. If I had been ordered to pay them more I would have kept only one, or cut their hours.

Newton’s Third Law states that for every action there is an opposite and equal reaction. If an employer is forced to give minimum wage employees a certain increase the employer might react by having less employees or giving the employees he/she has less hours to stay within the budget. This is one of the strongest arguments against a government forced minimum wage. There is a real danger, many economists say, that a higher minimum wage could hurt low income workers by diminishing the number of jobs available to them.

A common response to the argument that it is impossible to raise a family on a minimum wage job is that minimum wage jobs are not designed to support families. They are designed to acclimate people new to the work force. These are commonly teenagers who are seeking their first job. Other facts offered are that many minimum wage jobs offer possibilities of promotion to better jobs within that company or have scheduled pay raises.

When I was working minimum wage jobs I left one job after being told by a friend that he was making much more at a different location. When that location hired me I quit the first job and moved on. This action is not uncommon. I believe that employers who pay poorly get the lower end of the employee pool in most cases. Those employers are eventually forced to decide if they want to continue to train new employees, or pay better wages.

In my opinion some government officials enact laws or resolutions as “knee jerk” reactions to real problems or to give the impression that they are siding with “the underdog.” My question is, Is raising the minimum wage really helping?

Ripple effects generally result from any decision. A worker making $10.00/hour would surely applaud a law forcing the boss to raise their salary, they may stop clapping when the boss eliminates that position stating that it is cost prohibitive.

In arguments supporting pay increases many people whose opinions I respect say, “Business owners make too much money, it’s time they spread the wealth.” This argument would carry more weight with me if every business owner had money to burn. This statement fails to consider the struggling business owner who works alongside his employees and doesn’t have enough money in the bank to take a vacation because he re-invests his profits in the business.

Workers must be protected from those who might take advantage of them. Many businesses are small operations whose owners struggle to keep the doors open. If these businesses are hurt by “Big Government” as opposed to “Big Business” where do they go.

Think of the big hits every business has taken in 2020. Several national chains have suffered. Communications giant “AT&T” plans to close more than 250 of its stores cutting 3,400 jobs nationwide, 51 “Bath and Body Works” stores will be shuttered, “GNC” fears it will be forced to close1,200 stores, these are the big stores. Can you imagine how hard the small family run restaurants that employ so many of the minimum wage workers have been hit?

If raising the minimum wage is a good idea, which is debatable, perhaps now is not the time.

Please share your opinions on this subject and, if you like the article, share it. If you don’t like it please let me know why.

Thanks

Phil