I don't believe in a $15 minimum wage. I just simply don't. From an economic standpoint, it makes very little sense at all. While it may have good intentions, most of those taking part in the Fight for $15 movement are only looking at the issue in one dimension. While there are perceived social benefits and the issue tugs at our heart strings when we hear stories of workers who are struggling, emotions shouldn't decide our decisions. While the arguments made for a $15 minimum wage are compelling, all of those are either unproven or outright false.
Perhaps the known supporter of the wage hike is Senator Bernie Sanders. He railed at Hillary Clinton during the primaries for not being as vocal about it, and this issue was part of the platform that helped him gain an almost cult following among millennials.
He tweeted:
Politifact rated this claim as "Mostly False." The source of this claim came from the Economic Policy Institute, a left-of-center think tank, based on a minimum wage hike to $10.10. "Raising the minimum wage to $10.10 would reduce government expenditures on current income-support programs by $7.6 billion per year -- and possibly more, given the conservative nature of this estimate," EPI wrote.
This research was based on a wage hike to $10.10, not $15. The effects of raising the minimum wage to $15 is unknown, and many economists believe it could have dire effects. Most are torn over the effects on minimum-wage increases on employment. In 2014, the nonpartisan Congressional Budget Office estimated that an increase of the minimum wage from $7.25 to $9.00 would result in the loss of 100,000 jobs. But a rise to $10.10, CBO estimated, would swell that number fivefold, to 500,000. That's just to $10.10.
Logically, this makes sense. Increasing minimum wage only increases the likelihood that jobs will be exported and outsourced to places where minimum wage is much lower, or the amount of automation. Companies have no incentive to hire workers at higher cost. Why not invest in a well trained, more productive, smaller workforce, that can do the same job as a larger, untrained, and more expensive workforce? Office turnover is now much more costly. This hurts the younger generation, many of whom rely on retail and fast food jobs to support their families and their education. I find it vastly preferable to have a job than no job at all. Those pushed out of the labor market due to hiring freezes are forced to use government benefits to survive. Does that really decrease the amount of spending on welfare programs?
From a moral standpoint, most people in these minimum paid jobs have few if any marketable skills, work experience, education, or any real "value" to the company. The amount of investment it takes to get one of these jobs is minimal compared to say, one of us spending $35,000 a year at UC Berkeley to get an undergraduate degree. Let's do some basic math. Assuming that individuals work a standard 40 hour work week and that they work 50 out of 52 weeks in a year, a minimum wage job garners around $30,000 a year. According to the Daily Californian, UC Berkeley's student-run newspaper, the average salary of a UC Berkeley graduate is around $54,000. Now, account for the amount of money spent in tuition and other fees, which adds up to around $150,000 after four years. In order to have a net gain of $30,000, a graduate must work for 3.33 years after graduation. In addition, it takes six years for the rate of investment to be the same. And that's not even taking into account that fact that half of us will end up making less than the average reported salary. Is that not outrageous?
In short, in a perfect world, I would love to have a $15 minimum wage. But we don't live in a perfect world, and a $15 minimum is just as if not more harmful than current wage standards. We can only wait to see the effects.
