Minimum Wage Brings Unexpected Increases

by Grant Murrow

originally published by The Voice on March 14, 2013
http://www.buvoice.com/opinion/2013/3/14/minumum-wage-brings-unexpected-increases.html

During his State of the Union address in February, President Obama announced his plan to raise the federal minimum wage from $7.25 per hour to $9 per hour. He claims that this raise would lead to a “raise in the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.” However, this is not the case.

His claim of having more money in your pocket may be true in cases of employees of conglomerate employers, such as Wal-Mart or Target, but smaller businesses cannot afford to pay that much to their employees. If a company can save on labor, they will. Cutting into profits of a business by forcing a raise in wages will eventually cause them to raise their own prices in an effort to soften the impact. If it does not come in a raise in prices, it will likely come in a form that hurts the company’s employees such as, reduced hours, reduction of fringe benefits, installing machinery to take the place of workers, and even more detrimental-the higher likelihood of hiring illegal immigrants. All of which, in turn, hurt the American economy and people.

It may also lead to an increase in general unemployment. For example, the minimum wage in the state of Washington is linked to inflation, which is currently $9.19, and the unemployment rate is 7.6%. This reflects the fact that an increased minimum wage will not help employment decrease, and may even have the opposite effect in some cases. Also, as a secondary result of unemployment, crime in the areas with higher unemployment will undoubtedly rise. However, the people most affected by an increase in minimum wages are teenagers and young adults.

The people who minimum wage most affects are teenagers, the unskilled, minorities, those involved in low wage industries, and those not unionized. According to the Bureau of Labor Statistics and the United States Census report, 18.063 million young Americans, 66% of Americans over the age of 18 whom do not have a degree, 32.28% of Americans whom are minorities, 3.6 million workers who are involved in low wage labor, and 95.8% of Americans ages 16 to 24 who are not unionized would all be affected by this increase. Clearly, this would alter the life styles of a lot of people in a very negative way. All of the groups previously listed could have to deal with reduced work hours, benefit cuts, and ultimately layoffs. Thus putting a negative mark on the economy as a whole, and put people like us at the bottom of the ladder.

An increase to minimum wage and dropping profits would leave less money to go around. People like the students here at Bloomsburg University are prime targets for these losses, as we haven’t yet had a chance to enter the job market and gain experience. So what can be done to save jobs for people like us who don’t yet have our degree? Firstly, after a formal bill or law is announced, write to our congressmen. Tell them your opinion on the matter and ask them to act on your behalf in congress. Secondly, make yourself indispensable at your job. Take the time to learn your job and become the best you can at it, and make sure that your boss sees your potential. Lastly, study, and study hard. Your degree may be the difference between feeling the effects of the minimum wage increase or getting ahead.