Should We Increase Minimum Wage?
Most people who have a job would gladly accept an increase in their hourly wage; specifically people who are only making minimum wage. Although this increase in wage sounds ideal for the employees, it might not be as ideal for people that typically buy goods and services from the business, as well as the business itself. In the end however, an increase in minimum wage will bring forward more benefits than it does negatives, therefore it should be increased.
Above is a graph that shows the correlation between restaurants’ average star rating and how likely they are to close down. It also shows restaurants that pay their workers minimum wage, and restaurants that pay 20% more than minimum wage. This graph shows that at any given star rating, restaurants that pay minimum wage are less likely to close than those who pay more. Although this may seem like a bad thing, it brings many positives as well. Since restuarants with high ratings aren’t the ones that are closing, this increase in restaurants shutting down would cause the overall quality of restaurants to increase. The reason why higher paid employees’ establishments are more likely to close is due to the fact that the demand for these restaurants are relatively elastic since they tend to cater towards less wealthy individuals. Since in increase in wages would also increase the price, it would cause an overall decrease in demand. This then causes the consumers to think of other alternatives instead of eating out such as cooking at home.
Another benefit from the increase in minimum wage would be less reliance on government aid such as food stamps, medicaid, and energy subsidies. Since the relative minimum wage is not high enough due to inflation, many people rely on government aid in order to scrape by. Using the Bureau of Labor Statistics longest-running measure of inflation, the minimum wage should be $10.95 today. Since it is well below this, it demonstrates how people making this hourly wage are struggling to survive in today’s economy. If the minimum wage were to increase, they could provide more for themselves, and become less reliant on government aid. This is a benefit for our economy, therefore helping to prove the point that minimum wage should be raised.
In conclusion, an increase in minimum wage will improve the overall quality of restaurants as lower quality restaurants will be forced to close down due to the inability to maintain customers with an increase in menu prices. Along with this, it will provides individuals with better living opportunities, as even if they are laid off from their job, it is not structural unemployment, so they will be able to find work otherwise.
"Higher minimum wages may make bad restaurants close." The Economist. The Economist Newspaper, 29 Apr. 2017. Web. 01 May 2017."The impact of raising the federal minimum wage to $12 by 2020 on workers, businesses, and the economy: Testimony before the U.S. House Committee on Education and the Workforce Member Forum." Economic Policy Institute. N.p., n.d. Web. 01 May 2017.