So I saw this post on WordPress’ front page about how minimum wage doesn’t help. While I agree that there’s a possibility that minimum wage may not be as effective as we would like, I simply don’t buy the arguments that the author presents, nor do I buy the arguments of the economists he links to. I thought I would join in the debate on his comment section, but then I thought it would just be more fun to write my own thoughts about the issue. Here’s what I simply don’t believe and why:
Argument #1: Raising minimum wages will only result in business owners raising prices to break even, because they can’t afford to pay their employees any more.
This argument might make sense in the case of small business owners who are struggling to get by. In my personal experience working for local businesses, however, I’ve found that small business owners usually already pay their employees significantly higher wages than the minimum wage. Why do they usually do this? (Again, this is just in my personal experience) Well, they usually pay higher wages to get better workers. This is how they stay competitive with bigger, regional, or corporate entities. With a raise in minimum wage it might make it impossible for businessmen and women in that class to compete without raising prices, but they are already paying more than the minimum, so it wouldn’t necessarily force them to increase pay.
Now, if you’re talking about corporations(who are usually the ones refusing to pay employees a dime more than what minimum wage requires), then I’m calling 100% BS right there. For example, Wal-Mart’s CEO makes around $35 million annually. That’s a greater hourly pay for him than some employees made in a year back in 2010 according to an ABC News article. Now, you are trying to tell me that Wal-Mart, with its executives making that kind of cash, is going to go under if they are forced to pay their employees just under $2 more per hour? Any economist trying to convince me that corporations and chain businesses can’t manage that heavy load is, in my skeptical view, stuck in the back pocket of said corporations.
Now obviously the corporate folks will lose some profits, and they may try to counter that by raising prices, rendering the minimum wage ineffective. That action, however, doesn’t boil down to survival. That boils down to greed. “…Because I can’t live off only $30 million a year. I’m being robbed by the government and their pesky minimum wage!” Of course nobody would put it that way, but that’s what it sounds like when the higher-ups complain about having to pay workers more.
Argument #2: Raising minimum wage makes it harder for inexperienced demographics to get jobs.
This main argument from the blog simply doesn’t make sense to me at all. Supposedly an economist studied and found this to be true, but what are the jobs inexperienced workers, such as high school students get? Usually they get that job as the cashier at McDonald’s, or some other minimum wage, minimum skill job. Last I checked, these jobs have never suffered as a result of required wage increases, and they still have plenty of inexperienced workers, including lots of acne ridden adolescents
This argument goes on to suggest that employers won’t hire workers without experience, because the new higher wage doesn’t justify their lack of experience. But my question is, if that’s the case, who are businesses hiring? Did a wealth of experienced workers just pop up when businesses asked for them, as if the job market shifted to accommodate businesses who wanted more experienced workers? “Suddenly the market just stopped hiring workers without experience, because after minimum wage went up they realized they didn’t need any new blood in their businesses, and there was already a surplus of experience out there!!!!” Haven’t business owners always looked for experience before taking a chance on less impressive resumes? But they still have to hire some inexperience eventually. I kinda thought that was obvious…
It’s always been easier to get a job if you have previous work experience, and in certain fields it can seem downright impossible to get a job without experience. But that never had anything to do with the pay. It had everything to do with the market value of a given job and the skills, education, and experience necessary to effectively carry out that job. Not to mention competition.
There are more arguments in opposition to minimum wage. As I said at the beginning, I don’t know how effective minimum wage is, but I simply don’t believe that it has a negative effect. The previous blog and its sources just haven’t convinced me that this is the case.