By Jack Haines
Op-Ed Editor
There’s no denying it. The U.S. economy is in its worst slump since the Great Depression. The unemployment line may have gotten a little shorter over the past couple years, but many of the currently employed are working much lower paying jobs, including many minimum wage, part-time jobs.
One of the newest suggestions in the struggle to jump start the economy is to raise the minimum wage. Currently the federal minimum wage, the lowest hourly rate a worker can be paid, is $7.25 an hour. However, President Barack Obama has proposed drastically raising the minimum wage to $9.00 an hour. The Fair Minimum Wage Act of 2013, supported by such respected names as former Speaker of the House Nancy Pelosi, proposes raising the number to $10.10 an hour, significantly higher than the current statistic.
It is correct that this is not very high paying, and that it would be very difficult to get by on such a low wage. However, raising the minimum wage by so much will cost business owners much more. They will have to re-adjust their already tight budgets. Layoffs and a stoppage in hiring are possibilities in such a scenario.
A raise on the minimum wage is an incredibly risky move, and should not be undertaken, at least not at such a drastic rate. The economy is still very unstable, very unpredictable, and while bare subsistence workers could obviously use the money, an increase in wages puts a burden on the average business owners’ pockets.
Recently, large sales corporation Costco came to the defense of a higher minimum wage. CEO Craig Jelinek defended the President’s stance, saying that a higher wage would help both employees and employers alike. However, one problem lies with this this. Costco has a starting pay of $11.50 an hour, well above the current minimum wage, and even the proposed ones. Costco may be a large company, and Jelinek an experienced businessman. But small businesses who can’t afford to pay that $10.10 an hour should be in the spotlight as well.
The Costco support shouldn’t be a great persuasion for a rise in the mnimum wage, simply because Costco already pays more than the proposed $9.00
Business owners frequently disapprove of minimum wage raises. While accusations of “greed” make sense, after all nobody wants to pay more for the same thing, there is valid reason for business owners to be scared of raising their minimum wage. If employers are forced into this drastic pay raise, than they may also be forced to lay off a few workers to meet their new budget. Thus the purpose of the raise is defeated.
The minimum wage should be adjusted for inflation, but not abruptly raised. Doing so is not the best choice or the best option for solving the countries.
The U.S. economy is in trouble, and there is an urgent need for fast-acting fixes to the situation. However, raising the minimum wage should not be one of these solutions. While nobody knows for sure what the effect would be, it is not the worst of raising the unemployment figure to find out.
