Presentation here https://prezi.com/dkzawvqjgsos/the-minimum-wage-must-remain-constant/
The United States of America economy has been quite problematic over the past ten-fifteen years and there have been no true solutions found to aid the situation. A largely contributing factor to this economic turmoil consists of the current movement to fight for a higher minimum wage. The “Fight for Fifteen” movement embodies an idea of a change that would demolish the country’s already awful economy. Furthermore, one must recognize the significance of if hypothetically, the minimum wage was doubled to the amount of fifteen dollars an hour. Although raising the minimum wage would seem to be a good thing for those that are paid the minimum wage in their profession, numerous complications would arise if the minimum wage was increased by this significant of an amount.
Given the current economic state of the United States, there are many people that are either without jobs or currently possess an occupation that pays the federal minimum wage amount of $7.25. Realistically, there is almost no way one can survive on such a low pay rate or through unemployment and welfare benefits. To counter the popular belief that many possess where raising the minimum wage heavily would magically fix this issue, one must understand why this solution would definitely not work.
Imagine working full-time as an adult and attempting to live life whilst receiving the minimum wage as a source of income. An increase of three or even eight dollars of the federal minimum wage amount would seemingly change everything. Think again; companies such as McDonald’s, Wendy’s, or other organizations that pay most of their workers the minimum wage would take a major arrow to their knees. There would be no transition time to allocate the funds required to pay these skyrocketed wages to their workers. The companies would not simply be able to double their labor costs for the majority of their workers and make the same profit as the federal minimum wage amount is now. The increased overhead costs would blow so many companies out of the water and cause them to reconsider their labor strategies. The fast food businesses, retail stores, and even many local businesses throughout America would either have to reshape their entire business model or feel the bite of bankruptcy. In recognition of the counterargument, a question could be asked: Would this raised minimum wage negatively affect lower class America, or more specifically, those who rely on the minimum wage amount to survive? The answer is a strong yes and the reasoning for this can be made by how these affected businesses would react to an increased minimum wage.
A strong detriment that raising the minimum wage so significantly would create is a need for these businesses, that are reliant on the current minimum amount, to have to go the extent of altering their staffing. By increasing the minimum wage to fifteen dollars an hour, fast food franchises such as McDonald’s would have nearly doubled labor costs. The franchises would have to lay off a significant number of workers. These workers would have their jobs eliminated by the very change they have advocated for: a minimum wage increase to fifteen dollars an hour. Additionally, this change would cause companies and organizations to boycott the wage hike by eliminating more jobs to ensure profits and expect more out of the remaining workers. To put this into perspective, retail stores and fast food restaurants across the nation would possess much smaller and stressed out staffs all working for the new wage amount. And the many workers laid off by these companies would be stuck in a worse situation than they are currently: unemployment.
Another effect that a wage increase of this amount would introduce is widespread inflation. The very dollar amount that one could receive through this minimum wage increase would be deemed pointless as businesses would have to increase prices drastically to combat the heightened labor costs. Unfortunately, the largely increased salaries that many people would receive would be rendered nearly useless as many products purchased every day would now have significantly higher prices. Even more problematic, those of the middle class who receive significantly higher wages would still have to alter their own lifestyles due to the causational inflation, but without any pay raise. In summary, there is almost no one that would be significantly helped with this proposed minimum wage increase, as the negative drawbacks it would create would overbear almost all of the possible benefits. It is striking to know that many who desire for the minimum wage to be increased do not truly understand the detrimental phenomenon that would be formulated.
It has been often depicted by media and sources of entertainment throughout history that machines or robots would ultimately surpass humanity at some point in the future. Interestingly enough, increasing the minimum wage could quite possibly contribute to this proposed demise. A recent example of this phenomenon starting to occur is portrayed by Wendy’s new aim to counter the chance of higher minimum wages in the future. An introduction of ordering kiosks to thousands of Wendy’s restaurants highlights the idea that human workers will be replaced by machines. By eliminating cashiers and other greeting staff, the company’s appeal to automation shows that their profits matter more than the workers who survive off of their mainly minimum wage salaries. It is instances such as these that show how raising the minimum wage would to contribute to the elimination of many jobs and exhibit the desire for companies to automate human jobs to ensure profits.
Additionally, the belief that the minimum wage should not be changed is echoed through the eyes of the current president. As stated by the visionary himself, U.S. president Donald Trump, “Okay, you know, the minimum wage is a very, very complex situation, because we are a noncompetitive country…if you start raising that minimum wage, you’re going to make a lot of our companies even more noncompetitive” (Lee, n.p.). The idea of non-competitivity of the United States described by Trump is exemplified through the country’s rapidly declining economy. Companies in the United States already have sought to avoid American labor as it is hard to obtain profits this way. The combination of a massive amount of debt, declining value of the American dollar, and one of the highest corporate taxes in the world (35%), has made the United States much less competitive in comparison to many countries in the world currently. The main connection that can be made is that an increased minimum wage would ultimately drive even more jobs out of the country and into different countries with lower minimum wages. This action by companies to reduce overhead costs associated with labor by holding operations in countries outside the U.S. that possess a lower minimum wage is called offshoring. Companies all around the U.S. once again would try even harder to avoid the heightened minimum wage amount if increased, and consequently, an additional plethora of employment would leave the United States. Given Trump’s observation of the country’s non-competitivity, an increase of the minimum wage to a possible fifteen dollars would severely hurt two of the nation’s biggest issues surrounding its economy today: unemployment and offshoring.
The United States and its population would ultimately be destroyed by a federal minimum wage increase to any major extent as suggested by the “Fight for Fifteen” movement. Widespread effects would be felt throughout the country without discrimination of social class or wealth. Although major advocation has been made to raise the minimum wage significantly in the nation, the change would not be in the best interest of anybody in the United States. A lack of understanding is evident as this movement of people do not realize the effects this change could have on the entire population. The federal minimum wage amount would not matter if all the jobs in accordance with the dollar amount would be scrapped by corporations and replaced by machines or robotic operations in light to avoid hypothetically increased labor costs.
Aurenius, Anton. “How the U.S. Corporate Tax Rate Compares to the Rest of the World.” Tax Foundation. Tax Foundation, 16 Jan. 2017. Web. 13 Apr. 2017.
Dorfman, Jeffrey. “Lowest Wage Workers Will Be Biggest Losers Of Fight For 15.” Forbes. Forbes Magazine, 08 Apr. 2016. Web. 13 Apr. 2017.
Gurwitz, Adam Hersh and Ethan. “Offshoring Work Is Taking a Toll on the U.S. Economy.” Center for American Progress. N.p., 30 July 2014. Web. 13 Apr. 2017.
Lee, Michelle Ye Hee. “A guide to all of Donald Trump’s flip-flops on the minimum wage.” The Washington Post. WP Company, 03 Aug. 2016. Web. 13 Apr. 2017.
“Minimum Wage Hike Backfiring? Wendy’s Increases Self-Service Kiosks.” Fox News. FOX News Network, n.d. Web. 13 Apr. 2017.
***Disclaimer: This essay may or may not exemplify my views along with the associated magnitude of which way I might lean towards