Is there a chance of job loss?
Studies by economists in New Jersey display that as wage increases that so does the number of people let go because companies can’t afford to pay a large number of employees. Hiring itself becomes expensive for companies, specifically small businesses. Studies by the Harvard Business School show that the unpopular restaurants go out of business because of the high cost to pay all of it’s workers. The number of businesses to go out will increase as mutual as wage increases. This means an increase in competition for jobs. These jobs will attract more highly skilled workers due to the fact that people with impressive degrees will turn to these jobs for the simple fact of better pay though less rewarding in personal terms.
How do nationwide opinions affect the possibility of bumping the minimum wage?
Many states oppose the prompt to raise the minimum wage in more favor of the smaller businesses at hand that would be negatively affected by this proposal. But 19 out of the 52 states support the increase in pay for employees. Arizona being one of them that will have the largest increase of the following supporting states. Which is contradictory to the results approximately 300,000 less jobs will be created in Arizona, Colorado, Maine and Washington according to the AAF calculated into the next few years. Around 291,000 people will receive pay raises in Massachusetts. California has 1.7 million people will also get pay raises. All beneficial promotions differ among each individual business.
How will it affect poverty rates?
The logic behind raising the minimum wage is that it will lower poverty levels. An article by The Economist states, “People are now able to afford to live in the city with rent approximately $2000 a month. Poverty will continue to drop as the wage slowly makes it’s way up to $15.” People will be able to afford housing and be in much more comfortable financial situations. Statistics taken by officials in Emeryville state that “Poverty levels currently have dropped by 10%”. The goal of raising the minimum wage is to benefit the people as much as possible. It also leaves a good review/reputation on companies and how they treat their employees. When people hear about this there will be more commodity to purchase that specific company’s products or services knowing that they are coming from a good place.
How will this affect economic prices?
Many private companies strongly oppose the proposition out of fear of inflation. Product prices would increase due to the bump in raise; the government strives to even out money spent even though the main goal was to provide a more comfortable financial situation for employees on minimum wage. “The average meal at McDonald’s would increase from $3 to $5” (New York Times). Popular food vendors similar to McDonald’s sued the city for suggesting a $15 minimum wage out of fear for trying to find ways to bankrupt the companies. With the proposal the average cost of goods would be increased by 23% (Grant). If the cost of the goods increases then the cost to create them increases as well. Which caters to the arguing side that the minimum wage is unnecessary.
What are the other future possibilities for minimum wage companies if the salary is not raised?
The main purpose of bumping the minimum wage is to help out companies employees live in a more comfortable situation. Statistics noted by companies with minimum wage stated “Majority of our employees nowadays are adults with families in the lower class trying to get by” (The Economist). A yearly salary would average around $30,000 with $15 an hour. This would also change up to companies spending ¾ of their profits towards pay for their employees. Like stated in previous sections, many companies oppose this proposition since there have been more technological advancements that result in the less availability of jobs. “In 2011 7,000 kiosks replaced individuals in the consumer field. Recently McDonald’s has put in ‘Create your own taste’ touch screen kiosks that allow customers to order on the screen. On average this suggests that there will be 1 million less jobs” (Johnson). This proves that the field will be more competitive and suggests that employees will now work harder since it would be more trouble to get in.