By this point, most people have heard about raising minimum wage to $15/hour. Sounds like a fantastic idea right? When you take a closer look it’s not quite the best solution to our problems.
McDonald’s is already testing out kiosks in their stores in Australia rather than having cashiers. That means that the two or three people that stand there and take your order and greet you when you come in won’t be there anymore. And it’s a success with the crowd so what does that mean for those jobs if it’s a permanent change? They won’t exist because using a kiosk cuts down on the cost since there isn’t an employee to pay.
Minimum wage jobs are not meant to be permanent and raising the minimum just removes incentive to move up in life. Yes, moving up is difficult and a lot (I repeat: a lot) of hard work, but people working in McDonald’s and Zaxby’s shouldn’t be making more than or as much as the people who risk their lives, like our military, policemen, firefighters, and paramedics.
So let’s look at the numbers for a second. According to GoArmy.com, an active duty soldier in the Army with less than two years of experience gets paid $18,378 a year, and that number is actually lower the first few months. Firefighters and paramedics start between $20,000-22,000. If minimum wage is $15 and that person works a part time job at 28 hours a week, they’re making $21,840 a year.
Seattle, Wa enacted a $15 minimum wage back in March and almost immediately saw the negative effects. Businesses have to make more than they spend to get any kind of profit and a lot of money is spent in running a business: electricity, paychecks, rent for the building, taxes, and other necessary payments. That means a $15 minimum wage causes many good private businesses close their doors and lay off workers. Western Journalism quotes Anthony Anton, president and CEO of Washington Restaurant Association, as saying “It’s not a political problem; it’s a math problem.”
The same Western Journalism article contains an interview with a hotel cleaning woman who said that she didn’t get paid for her overtime anymore, lost her 401k and health insurance, and wouldn’t get paid holidays and had to pay for her own parking. A waitress at the same hotel said she used to be paid $7 per hour plus tips, which amounted to more than the $15 per hour she now gets paid. With the wage increase, her tips don’t amount to nearly as much so she makes less. She also has to pay for her own parking.
An increased minimum wage means higher prices for products, lower quality products because businesses acquire cheaper materials to cut costs, and customers going elsewhere for lower priced products. And you think bargain hunting now is a struggle. It would only get worse.
The United States is supposed to be the Land of Opportunity, not the Land of Handouts. Increasing the minimum wage just means a spike in the unemployment rate because people are going to get laid off and an increase in product prices because companies need to get their profit from somewhere and shipping isn’t going to be cheap. It turns into a vicious cycle when you need to make more because you’ll be spending more.
It doesn’t look like an increase will help anyone.