Minimum Wage Inclination

Source: CNBC

Article Link: http://www.cnbc.com/2015/07/23/the-15-minimum-wage-fight-notches-higher.html

Author: Heesun Wee

Date: 7-23-15

The issue discussed in this article is New York’s inclination towards increasing the minimum wage to $15 an hour. Soon, The New York Wage Board will complete a testimonial to New York’s work administrator. While the article doesn’t advocate for or against wages, it does inquire about the future: Who will be the next governor to take a risk and utilize his or her power to increase minimum wages?

The supporting evidence for this issue consists of the history of government authority over wages. The New York Wage Board’s sudden move places the issue on a broader, nationwide spectrum. Not only is New York impact, but so are the other few states with comparable government authority over wages. Other states under public eye in regards to the issue include California (with a current wage of $9 an hour), Massachusetts (currently $9 an hour), and New Jersey (currently 8.38) an hour. Such wage hikes clearly impact the economy. Proponents claim it will positively affect our economic standing by subsiding income equality; however, opponents maintain that owners of small businesses will face the brunt of New York’s ignorant actions. The article reveals how wages are a huge determining factor in our economic standing due to their impact on small businesses, low-income earners, employment, and nearly every economic aspect of society.

Wage fluctuation is a very controversial topic due to how it can affect different people of incomparable statuses, either immensely or not at all. Take inflation, for instance. Restaurants, with staff who make minimum wage, could have middle-income customers. If minimum wage was to increase, restaurant owners might be inclined to raise their prices to balance out a loss in profits. However, an increase in prices would result in less clientele. In order to maintain business, owners would inevitably need to feel the burden of increased wages. Thus, inflation wouldn’t be heavily affected. On the other hand, a hike in minimum wage would correspondingly raise the purchasing power of formerly low-income workers. More consumer spending would stimulate economic bustle and boost GDP  (gross domestic product). The overarching impact this would have on inflation is reliant on whether or not increased income would lead to a universal (all product) demand increase.

Another split debate is how wage increases would affect unemployment. Proponents of a hike in minimum wages would argue that unemployment wouldn’t be negatively impacted due to how much increased purchasing power will increase demand and profit, thus, making more jobs available. Others argue that if it costs businesses more to hire employees, then owners would favor one worker that can perform many tasks as opposed to multiple people only capable of a single duty. Again, it all comes down to how higher incomes will influence spending.

In general, a hike in wages is a very heated topic, and I believe it’s one that will be an everlasting debate due to how it will impact those of different classes. New York may not be alone in its desire to raise minimum wage to $15 an hour, for other states have equivalent government power. I feel as though this decision really validates the authority of state governors’. Without the fear of legislation hampering their aspirations of change, governors can truly alter this issue as they see fit. With the upcoming presidential election of 2016, I see the already scrutinized issue has been brought directly to the forefront of America’s political landscape. Bernie Sanders, a presidential candidate, has been very blunt about his wish to raise the federal minimum wage. I agree that minimum wage should be increased in order to help elevate many from a life of poverty.