The minimum wage, a highly volatile topic in the US, has been increasing throughout the years, but many believe the minimum wage is still too low for comfort.
Since 1975, the US minimum wage has increased by $5, now being $7.25. President Barack Obama has promised to increase the wage to $12, but many people are demanding a $15 per hour wage. This may sound enticing, and many people might think, “If my minimum wage is increased, wouldn’t I become more rich and wouldn’t I have a higher living standard?” This might seem true, but there are many other negatives and consequences that come in if the wage is increased.
There are some problems in raising minimum wage. At the moment, France, a country with a minimum wage of 9.67€, which is around $10.21, has an unemployment rate of 10.5%. That’s double the average unemployment rate in the USA. A correlation can be seen between unemployment and minimum wage. Though there are many other factors into unemployment rate, minimum wage is the biggest factor, especially for larger corporations. This is because of simple economics, companies have factors into cost, such as raw resources, facilities, advertising, and labor is one of those factors. When the wage is increased, this affects the cost of creating the product because companies have to pay their workers more, making their product more expensive. This eventually creates a chain reaction, that could eventually lead to economic hurt or inflation.
Another problem with raising the wage is that companies will eventually lower the usage of regular human labor. This is very easy to spot in places like Europe and Asia, where the minimum wages are extremely high. For example, many McDonald’s franchises in Spain have self-checkout and self-ordering machines to avoid hiring and paying workers to simply take orders for $15 each hour. This may be very absurd and surprising to see, but this has also happened in the US as well, especially in states where the minimum wage is beginning to convert to $15 an hour, such as New York and California. This hurts the specific group of people that want the minimum wage to be increased, and overall hurts the economy.
Overall, the people who want the minimum wage to be increased to $15 per hour in the United States are in danger of hurting their own economic stability. There is no concrete proof that the economy will be hurt in the US, but it’s easy to make an educated guess that the increase could hurt the economy, as seen in Europe, Japan, and other countries and continents that have high minimum wages.