Recently Seattle has passed its decision to gradually raise its minimum wage to a grand total of $15. As both a graduated high school student and child of the middle class, I see both points of view of the age old debate of whether or not to raise minimum wage. On one end of the spectrum, raising the minimum wage would be increasingly beneficial for those who depend on minimum wage as a form of living and for those students who are making extra cash on the side, but on the other end, raising the minimum wage could result in increased costs for businesses and a higher unemployment rate. There’s no one exact correct solution with regards to minimum wage, as a lot of it is situational, but with all the recent discussion that has been brought up regarding minimum wage, there have been valid points made that raising the minimum wage could be beneficial to all, not just the workforce themselves.
Businesses benefit from this increase in wages, as it reduces turnover, encourages efficiency, and causes an increase in demand. Gap for example, has recently made a decision to raise its minimum wage. Peck, the president of growth, innovation, and digital for Gap, says that Gap has no plans to cut jobs, emphasizing its decision as a business decision because it allows the company to attract and retain talent, and maintain its competitiveness. The market businesses are in requires businesses to be competitive in order to maintain the highest level of productivity and revenue, and that includes wages for employees. Gap, realizing this, has already taken the first step towards leading higher wages of minimum wage workers to attract the top talent. Google announced a 10% raise for its employees around three years ago, and the Google stock is currently 60% higher now than it was before the raise, proving that businesses do not necessarily lose money with the increased wage. These two examples demonstrate how the increase of minimum wage lends to positive affects as it allows companies to maintain competition and enforce efficiency.
Living in the Bay Area and specifically in the Silicon Valley, has a high cost of living. Thus it is understandable that there be an increase in minimum wage. For many of those who do work in minimum wage jobs and depend on them, the national standard of $7.25, set five years ago, is generally not enough to maintain a basic standard of living. Increasing wages will generate more income for those minimum wage workers, and the increase in income would allow them to afford more and therefore spend more, boosting the economy. Also, raising the minimum wage would lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week essentially providing $5 billion a year more for families living in poverty.
There’s concern that raising the minimum wage benefits the workers at the cost of consumers, but consumers too can benefit from this increase of minimum wage. Many of those who are in minimum low waged jobs rely on government funded social services such as, Medicaid or food stamps. 45,753,078 people received food stamp benefits of $138.80 per person, which is a substantial amount of money to be spent on welfare. Government shouldn’t be subsidizing at the cost of taxpayers, but through the increase of minimum wage, many of those reliant of those services will be able to afford the basic necessities for them to live a basic standard of living. And with the declining dependence on social services, the government and therefore tax payers and consumers wouldn’t have to spend as much on social services.
Overall, the raising of minimum wage seems to lead a beneficial impact for businesses, the workforce, and consumers. Businesses would be able to retain talent and increase efficiency, millions of those in the workforce would be lifted from poverty, and consumers would have tax savings. What’s not to desire?