Ever since the Fair Minimum Wage Act passed in 2007, its guidelines, which raised the minimum wage to $7.25 by 2009, have gradually lost the attention of the American public. However, with fast-food workers recently striking for better pay, President Obama proposing a $9 federal minimum wage in early 2013 and Seattle contemplating raising its minimum wage to an unprecedented $15, the topic of minimum wage has reemerged as a national issue.

by Betselot Wondimu ’15 Pro

The income inequality in the United States today seems boundless, partially due to the low minimum wage poor Americans are facing. According to the Wall Street Journal, the top ten percent earned 50.5 percent of America’s income in 2012. No new policies have been enacted concerning these problems despite growing support from workers across the country. However, recent outcries have brought minimum wage back into the political discussion and are inspiring rationales that argue an increase would dramatically boost our slow economy.

President Obama suggested that the federal minimum wage be raised to $9 in his State of the Union Address earlier this year. If this were to be implemented, low-wage workers in all major companies would have more pocket money. With this, the companies would take initial losses in profit.

As time goes on, however, workers earning new, universal living wage salaries across the nation would unleash their enhanced purchasing power. Cashiers, janitors and fast-food workers would be able to spend more and reinvest money back into the economy by buying more food, clothes and other basic living accessories. Stores that originally raised their workers’ pay would now see a gain in profit from selling additional goods and services.

While some fear that increasing the minimum wage would discourage employers from hiring workers, their fear is misguided. According to a study conducted by the University of Vermont, increases in both federal and state minimum wages correlated to lower unemployment. This happened because with a higher living wage, companies’ profits ended up exceeding what they lost through workers’ pay.

With the current federal minimum wage set at $7.25, low-wage workers have a difficult time surviving. Someone in a two-person household working 40-hour weeks would annually make $15,800, which is just under the poverty threshold, with this living wage. A provider in a four-person household would be thousands of dollars below the poverty line. People working full time don’t deserve to struggle and still not get by.

Currently, 19 states have set their living wages higher than the federal government’s. These state legislators realize that the American economy is a cycle, and what goes around will eventually come back around. On top of giving businesses profits by encouraging the working-class to spend, an increase in the minimum wage could dramatically better the lives of many, even helping them off of government welfare. In the wealthiest country on earth, low-wage workers shouldn’t be living the way they are.

by Brian Hughes ’15 Con

Raising the minimum wage is a classic example of good intentions that yield bad results. It’s a nice thought to pay people more money so they happily have more to spend, but the logic in increasing the federal minimum wage of $7.25 someone earns an hour just isn’t there.

It sounds like a good idea, at least. When people are earning more money it grants them more freedom to spend it on things besides life’s necessities. From there, it makes sense to contend that businesses would make more money as well, so everybody wins.

If the logic for raising the minimum wage is so obvious, why stop at $9 or even $15? Why not raise it to $30? It’s because that extra money employers have to pay has to come from somewhere. Businesses aren’t as willing to hire when they have to pay $10 an hour opposed to that $7.25 mark. So now all those people that were going to have more money to put back into the economy suddenly have no jobs at all since businesses decide that they can’t afford to hire people when it’s too costly. When the price of a product goes up, people aren’t going to buy as much of it. Labor is no different.

This applies to high-school students as well, as Forbes reported that within six months of the last wage increase, 600,000 teenagers’ jobs were lost. With most young adults lacking sufficient skills for more complicated professions, higher wages are out of the question if there are no opportunities to work lower-paying jobs that provide the experience needed to move up the career ladder.

These politicians who are fixated on paying people more to help stimulate growth are playing to the likes and views of their constituents. A recent poll commissioned by the National Employment Law Project Action Fund, a non-profit group that supports increasing the minimum wage, found that 80 percent of the 1,010 American adults surveyed supported raising the minimum wage to $10.10 an hour and increasing it periodically to account for inflation (which, it’s worth noting, is almost nothing at the moment).

Lawmakers want to have the ability to show the visible, easily explainable effects of legislation they support. You can either say, in theory, that it will put more money in your pocket, which is what people want to hear, or you can tell them that it will result in the chance of them losing their jobs.

It’s always a good thing for people to earn a better salary and have more money to spend, but not at the cost of businesses. The best way for people to earn more money is not with more policy, but to work hard and make their services worth more on their own.