How Would You Do Living on the Minimum Wage?

Tchaikovsky Sounds Funny

The argument most opponents of increasing the minimum wage use is they state jobs will be lost. Most studies find the loss of employment, through increasing the minimum wage, are minimal at most.

The reality is the total amount of money involved in businesses paying the increase to the lowest wage earners is usually a small fraction of the total cost to a business. Since the minimum wage has last been increased in 1997, the “pain to business” for the cost of paying the minimum wage has been eaten away by inflation and the businesses have received a break in continuing to pay employees the minimum wage. Other costs to businesses have increased during this time: cost of capital, the cost of pay to all other employees, etc. The only cost that has not increased is the cost of hiring minimum wage employees. The amount of money involved in increasing the cost of paying the lowest wage earners is usually not a major cost to businesses.

Increasing the minimum wage often has been found to be good for businesses. Most jobs at the minimum wage are the ones with direct contact with customers—the people behind the cash register, the sales help, the people who clean hotel rooms, etc. Employers are discovering that increasing the pay to such employees keeps these employees happier and they remain on their jobs longer. This lowers the costs of searching for and hiring new employees and then training them. There are also productivity losses from new employees who are unfamiliar with the duties of their new positions. As these are often the employees who have direct contact with customers, this can have far reaching consequences should customers be dissatisfied with their service. Maintaining experienced employees can be crucial to many businesses.

There have been many incidences where increasing the minimum wage increases employment. Employers have discovered that keeping experienced employees on positions such as cashier keeps the flow of customers moving more rapidly with the resulting smaller lines then bringing in more customers. This then requires more cashiers. Businesses have had difficulty attracting qualified employees at such low wages. The higher wages attracts a large pool of applicants. At the higher wages, more good cashiers can be hired.

Even when there are minimal losses of jobs due to increasing the minimum wage, the basic issue of fairness remains. Is it fair to force someone to work at a wage where, working full time, year round a person can not reach even the poverty level? Basic respect for humans demands this pay increase. There have been employers who have stated they laid-off employees due to increasing the minimum wage, yet these employees then find other jobs at the more decent wage rate. The question really is: what is the lowest level of decency we should provide to someone who works? The minimum wage should be increased.