Why employees should be paid more for minimum wage jobs
In July 2009, the federal minimum wage was raised from $6.55 to $7.25, but this was more than a decade ago. The final wage increase was the third step in a three part increasing series which began in 2007. The overall 40 percent increase was a substantial raise from the $5.15 minimum wage that existed prior.
Today, labor advocates are fighting to raise the minimum wage to $15 per hour, as well as the right to unionize, with a campaign dubbed Fight for $15. The movement, which began in 2012, is gaining enormous headway thanks to publicity from politicians and large businesses. Thousands of fast-food workers, retailers and other low wage workers have come together to fight for what they believe is the bare minimum hourly rate needed to survive.
The Fight for 15 movement has already resulted in a $68 billion raise for 22 million low wage workers. According to an analysis published by the National Employment Law Center, “of the $68 billion in additional income, the overwhelming share … is the result of $15 minimum wage laws that the Fight for $15 won in [12 cities and states] over the past few years.”
Most recently, Amazon CEO Jeff Bezos announced Amazon would be raising the minimum wage for its employees to $15 an hour starting Nov. 1, as a show of support for raising the federal minimum wage. Bezos has challenged other businesses to do the same, or more, than he has done.
While Bezos’ act seems admirable, and a federal minimum wage of $15 seems appealing to low wage workers, the question on everyone’s mind is how this will affect the economy if it goes into effect. Many people are worried that higher wages will discourage employers from hiring employees and lead to the shutdown of businesses.
However, there is evidence that a $15 minimum wage can exist without toppling the economy, as critics suggest. New York City has a $15 minimum wage and has seen positive outcomes in revenue and employment. New York City enacted the higher minimum wage in 2013. Since then, “the city has seen a strong economic expansion of the restaurant industry, outpacing national growth in employment, annual wages, and the number of both limited and full-service restaurant establishments,” according to A New School study.
The Federal Reserve Bank of Chicago posits that “if low-wage workers have more money in their pockets, they will have more money to spend, potentially expanding the number of consumers who can afford to eat out.”
In addition to contributing to the growth of the economy, a rise in minimum wage will also ease the suffering of individuals struggling to live off of the current low-wage amount.
The Massachusetts Institute of Technology’s (MIT) Living Wage calculator shows “the hourly rate that an individual in a household must earn to support his or herself and their family. The assumption is the sole provider is working full-time (2080 hours per year).”
It estimates the California living hourly wage for a single adult with no children is $14.61. That number increases to $30.23 for a single adult with one child and continues to increase significantly with each additional child and non-working co-parent. The same calculator estimates the required annual income for a single adult after taxes is $26,000. However, if that single adult is earning minimum wage and working 40 hours a week, they will only make $24,960. This goes to show that it is impossible to live off of minimum wage as a single adult working full-time.
Financial worries — in addition to having a physical impact on where someone can live, what someone can buy and if they can pay bills — cause mental and emotional stress. Most of the time people are concerned with economic implications — “What will happen to business owners?” “Will inflation spike?” “Will unemployment rise or fall?” — and not the positive implications it can have on mental well-being.
According to Big Think, studies show low minimum wages can lead to otherwise preventable health issues, such as premature death and severe anxiety. New research, published by researchers at West Chester University, concluded that economic instability was a key factor in rising stress levels in children.
As Matthew Desmond shared in a story for The New York Times Magazine, “A $15 minimum wage is an antidepressant. It is a sleep aid. A diet. A stress reliever … Poverty can be unrelenting, shame-inducing and exhausting.” Going to bed knowing that you can pay the bills in the morning; that you have enough money to take the bus to work instead of having to walk; or that you can afford to eat more than what’s on the dollar menu at McDonalds. That is the peace of mind possible with a $15 minimum.
As debate continues as to whether raising the minimum wage is justifiable or not, it is important to remember the implications it will have, not only financially in the lives of those who need it most, but on overall quality of life.