Pros and Cons of Raising the Minimum Wage
When you picture a minimum wage worker, who do you picture? Do you see a sixteen year old, a middle-aged mother, a college graduate, or even a senior citizen worker? In September of 2013, California governor Jerry Brown signed a new bill into act that would cause the California minimum wage to rise from the current $8.00 and hour to $10.00 and hour in increments over the next three years. The minimum wage rate will go up in two separate $1.00 boosts. The first will change the rate from $8.00 to $9.00 in July of 2014, and the second increase, to $10.00, in January 2016. In this paper, I will discuss, compare, and weigh the pros and cons of the minimum wage increase in California.
Governor Jerry Brown based the minimum wage increase off of the bases of inflation. Governor Jerry Brown explained that the rising costs in California have not kept constant with the minimum wage meaning that the three million Californians earning minimum wage find themselves living in poverty and living paycheck to paycheck, Governor Jerry Brown explained, "The minimum wage has not kept pace with rising costs… This legislation is overdue and will help families that are struggling in this harsh economy." At first glance this bill seems to be doing great things, helping low income people and families earn a more livable wage, but like all things there will be both good and bad outcomes of this bill.
Firstly, I would like to address my previous question: who works on the hourly minimum wage? According to the Bureau of Labor Statistics, as of 2011, the highest percentage of Americans working on the minimum wage are workers aged 16 to 19 who work part-time (less than 35 hours a week). Most of these workers have less than a high school diploma in regards to education and a slight majority of them are female. There are very slight variations between race (see chart) and most of them are single (unmarried). These results, at least to myself, are not shocking but are helpful when looking at who this minimum wage increase will be affecting.
Once the minimum wage goes up will employers be able to successfully employ the same amount of workers as when the minimum wage was lower or will they be able to higher on new workers as they need them? This is one of the concerns of many in regards to the minimum wage increase. In Sanja Blazevic’s article, “Is Employment Decreasing Due to Minimum Wage Increase?”, Sanja explains that many economists believe that a minimum wage increase causes most age groups of minimum wage workers to suffer. This is caused by jobs becoming more scarce after employers want to employ fewer people since they are being forced to pay them more than they would prefer to. Young workers (25-29) seeking a job of a minimum wage could see unemployment rise to close to 10% during a minimum wage hike (Blazevic) creating a significant unemployment problem. Other age ranges saw similar but not as extreme level of...