“Of course, nothing helps families make ends meet like higher wages. … And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.” -–President Obama, State of the Union address, Jan. 20, 2015
President Barack Obama is renewing his call to raise the minimum wage to $10.10. During a speech at a manufacturing plant, President Obama proclaimed, "We should be raising the minimum wage to make sure that more workers who have been working full-time shouldn't be living in poverty...". He also called for a wage increase for tipped employees such as waitresses with the possibility of having minimum wage adjust with inflation. President Obama is certainly motivated by good intentions. Families earning minimum wage will be able to immediately enjoy an increased standard of living. There are, however, negative consequences which may result from an increase in minimum wage. The proposed wage increase could actually hurt more Americans than it helps because of prices increases employers will have to make to incorporate the higher cost of employing workers.
I do not completely agree with Obama’s plan but tip workers should get a wage increase because tips are the bulk of their pay (which wouldn’t be a problem if people tipped consistently). These workers operate on a fluctuating income. A waiter could be doing a phenomenal job week after week working the same amount of hours and still get paid differently. Every job is difficult in its own way but it pays off to know that a paycheck will always be the same. One thing that people fail to realize is that sometimes these workers have to split their tips. Depending on the size of the restaurant, the restaurant may use a pool-type tip system. This means that all tips are placed in a “pool” that is then distributed amongst each staff member at the end of the shift. Also, restaurants have to pay credit card processing fees. Some restaurants will take a small percentage out of the waiter’s tip to balance out these fees. The waiter still gets a high percentage of the tip but out of that $20 tip, the waitress may only get between $5 and $10 out of it. There are many things that alter a tip worker’s paycheck. A simple wage increase could make a huge difference in how much money they take home each week.
Tip workers produce more than what they are paid for, which leads into the minimum wage effects on production. However, regular should not get a pay increase. Employers will have to pay workers more money for the same job, price adjustments will be made to accommodate the wage increases. Employees will be expected to produce more. For jobs that already require a lot of work, this could be very troublesome. Wages have an effect on production. For any job, an increase in pay means the job...