The debate over whether or not to raise the minimum wage has been a fight since President Franklin Delano Roosevelt pushed a 25 cents an hour minimum wage through Congress and signed the Fair Labor Standards Act into law in 1938. Proponents of raising the minimum wage argue that since the 1940s, inflation has made the current amount ($7.25 an hour) unlivable in the majority of our country. Frankly, this has been the reason previous presidents have cited in order to raise it to where it is now. Meanwhile, opponents of the increase argue that raising the price of labor would increase the level of unemployment across the country. The question here is how can we solve this problem without hurting the lives of those who need both more money and a job.
Raising the minimum wage to a flat $15 rate across the board seems to be a good idea as many of its proponents argue for the benefits. I agree with the majority of the arguments for the increase (i.e. the increase would allow for workers to not live paycheck by paycheck–this is something you can barely do with the current minimum wage); unfortunately, I argue that a flat rate may not be the best idea there is. While wealthy corporations whose profit margins are in the multi-millions (or billions) can afford the increased price of labor, small businesses whose profits are near to none or even in the negative can only afford to pay the current minimum or a little more. The increase from $7.25 to $15 may push employers to lay off workers simply because they cannot afford the new minimum wage. These small businesses cannot handle the extra cost and will choose to cut their labor force to the point where they can afford the labor, increasing unemployment and increasing the amount of work that another worker would have to pick up.
Around six million employees are working in small businesses; if employers were to lay off half of their employees, we would have a case where about three million people would be unemployed. Of course, this is an exaggeration, but it is a plausible possibility. Although not all is lost (nor that dramatic), there is a new solution at hand; instead of making a flat rate, there should be a mandatory rate if a company produces more than a certain amount of profit/capital. For the purposes of the argument, any business that makes more than five million dollars a year needs to pay their workers a $15 minimum wage. Meanwhile, businesses that make five million dollars or less should keep paying the current minimum wage. (Note: legally I am not entirely sure how this can be implemented, as there might be an issue with it breaking the Equal Protection Clause of the 14th Amendment of the Constitution.)
As a result, small businesses would be forced to improve how their work environment is run. This would encourage some employees to keep working in the business granted it is a smaller paycheck. Meanwhile, companies like Walmart and McDonald's would have to start paying livable wages, all the while forcing small businesses to innovate in order to keep their workers from jumping ship.
The increase would affect student life here at Andrews University in a positive light. Students employed by the university would have more cash to spend on things that the university provides, making a cycle of cash flow from the university to students and back to the university—making the lives of students who use the money they earn on campus to pay off tuition easier. Not only that, a pay increase can provide those who work in the Cafeteria and Gazebo an extra incentive to continue working.
While the United State's minimum wage is the twelfth highest in the world, our society has reached the point that there is a need to increase the minimum wage to $15 an hour here in the United States. In order to do this, there needs to be a complex way to implement it so we don't end up hurting the people who both employ and work for small businesses, which are the bread and butter of innovation here in the states. The standards of living have changed and improved since the Fair Labor Standards Act was signed into law, but it is now time for our wages to keep up with society today.
The Student Movement is the official student newspaper of Andrews University. Opinions expressed in the Student Movement are those of the authors and do not necessarily reflect the opinions of the editors, Andrews University or the Seventh-day Adventist church.