All the wage: the reality of the wage raise

COLTON WALTERS

Chief Graphic Designer

waltercj@plu.edu

For the past few years, cities like San Francisco, Los Angeles and Seattle have approved a raise to their minimum wages. In Tacoma, this decision will raise the hourly rate from roughly $8 to a bold $15 over the next three years. The issue is polarizing to many. While some see the initiative as a way to increase revenue and spending power, the raise’s speculated consequences on the job market make $15 seem a lot less appealing.

One group that would definitely be harmed by the raise is the people who already have jobs. Though their pay rate would jump to double the federal wage, most employees’ job security would be jeopardized.

“There will be people who lose their jobs over this.  I don’t think there’s any question about that,” said Norris Peterson, Pacific Lutheran University’s Chair of Economics.  

While large corporations may have an easier time affording an  increase in their workers’ pay, smaller companies would have to decide whether or not to fire workers and reduce the number of hours they give their employees. Thus, with fewer hours, these workers’ incomes will roughly stay the same as it was before the wage raise. It doesn’t make sense to raise the minimum wage if the consequences are likely endangering jobs and shortening work hours if people’s income stays the same or drops.

Those who are trying to enter the job market are also going to be seriously affected.  This raise in minimum wage makes it a lot easier for hirers to pick their employees based on prejudices.

 “That’s a recipe for disaster,” said Peterson. “This gives employers a license to discriminate on any margin they feel like, just because they can.”  

Additionally, people who held back entering the workforce for $7 an hour will likely try to get jobs that pay $15. This increases the number of people trying to enter the workforce, making it harder for anyone to be employed.  PLU Economics Professor Lynn Hunnicutt expressed how people looking for jobs will have it the hardest.  

“If the minimum wage goes up we should not be surprised that companies will try to get by with fewer workers,” she said.  

Entry-level jobs, typically reserved for high school or college kids, would be handed over to overqualified adults.  Even businesses that offer attainable jobs wouldn’t hire an inexperienced high school student for $15 an hour when there’s a surplus of grown adults with greater professional experience.  Raising the minimum wage would cripple people trying to push their way into the labor force.  

This unprecedented wage jump will be brimming with negative consequences for the job market.  While a sudden jump to a $15 wage seems great on paper, it’s not realistic. Both Professor Peterson and Professor Hunnicutt say that a better solution would be raising the wage to $11 or $12 in cities like Seattle.  This is a more practical figure and wouldn’t hurt the job market like a devastating $15 wage would.

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