Increasing the minimum wage may help hard working families make ends meat. The first federal minimum wage in 1938. Started at $. 25 an hour. In 1968 it reached its peak value. Since then the value has fallen thirty percent, so that today's minimum wage of $5.15 is equal to $4.18 which is equivalent to the value in 1995 (women, 4).
Some states have decided to raise the minimum wage above $5.15 an hour even though the senate ultimately sets the minimum wage. There was a push to raise the minimum wage two dollars in the next two years. The average yearly income for a person who works minimum wage is around $19,000. In the United States there are over 1.6 million minimum wage workers. Fifty-three percent of minimum wage workers are high school, or college students, seventeen percent are the retired, and thirty percent being unskilled workers.
Because the minimum wage is not enough for most people to live on, in 1994 local union leaders and activists have helped to pass more than 100 living wage ordinances. A living wage is designed to help low wage workers and their families to live above the poverty level They have decided on minimum wage on different things but they are looking to increase it since minimum wage workers that make up a family of three are making $5000 below the poverty line. There are some positive aspects to raising the minimum wage. Bernstein and Schmitt from the Economic Institute in Washington, D.C. studied the effects of raising the minimum wage in 1996-1997 from $4.25 to $5.15 found the following: 1. Nearly ten million workers or 8.9% of all people with jobs benefited from the full increase to $5.15.
2. Most of these workers were adults (71%) and females (58%). 3. Close to half (46%) up to beneficiaries work full time and another third work twenty to thirty-four hours per week.
4. The average minimum wage worker brought home more than half (54%) of his or her family's weekly earnings. 5. The increase primarily benefits the working poor -- 35% goes to the poorest working households and 58% goes to the lower 40% of working households. (New Orleans, page 16) This concludes that there were financial benefits for all of those people who got the minimum wage increase.
The report issued by New Orleans looked at three separate family situations to measure the benefits of the minimum wage raise, the first is a family with one working adult and one child; family with two adults and two children, including one adult with a paying job; a family with two adults and two children, but with both adults holding paying jobs. All three families had an increase in there gross income but there disposable (how much could actually be spent) income did not increase a lot. This was because all families got support from federal Food Stamps and Earned Income Tax programs. The other two things mentioned that these families benefited from were greater access to bank loans or other forms of credit to purchase homes or get higher education and the other was dignity. It has been found that the vast majority of people in this country would prefer to work for a decent wage than to receive government or welfare benefits. (New Orleans, page 15) The government also benefits when workers earn more money because they aren't as dependant on federally funded programs like food stamps.
The New Orleans report also felt business in poor neighborhoods would benefit because workers would spend there money in their neighborhoods. Just as many people however are against raising the minimum wage. They argue that job losses will occur. Employers may need to pay workers more money in wages than they are receiving in labor.
An example is that McDonalds can install a French fry basket loader that loads a specific amount of fries into a basket. This job was previously done by a minimum wage employee. Such jobs that pay minimum wage are fast food worker, a person who washes dishes, waiter or waitress, a person who works a cash register or a bus boy / girl who goes around clearing the tables. The people who work minimum wage usually fall into three categories. High school or college students, who are just working to get a little extra spending money, the people who are retired or have decided to work for entertainment, and the people who use minimum wage jobs as a full time job. There are also negatives to all the positives.
Such an example is that the last minimum wage increase in 1997, 20,000 student employees were without a job due to the raise, in Detroit (http: / web). The problem comes for the people who are using a minimum wage job as their full time jobs. Working a forty hour week at minimum wage gets around 230 dollars and the cost of living is expensive taking into consideration insurance, food, utilities, gas, and other items needed for a child. By the time these workers pay all their bills they only have a couple hundred dollars to spend for themselves a month if they are lucky! College and high school students are working when they want to, just for a little bit of money to have fun with, and the retired do it most of the time to interact with other people instead of staying at home by themselves. Minimum wage workers are important to businesses and the economy.
If nobody were to work at fast food or restaurants, there would be no dining out. All companies would have to make their profit from the consumers are stores. When people buy products for themselves they use it conservatively instead of as much as they want such as they would a fast food restaurant (taking 30 napkins and 10 ketchup packets when you only need 10 napkins or 2 packets). Companies make much profit from the production of the things they sell to fast food such as the ketchup packets, cups, napkins, straws, and if there were no fast food places for them to be sold then not as many people would be needed to work in the factories to create and maintain the assembly lines for these products.
Flexibility of hours and shifts is another problem for full time workers. If the person is trying to get an education and work enough to support their family they are going to struggle on one or the other. For the unskilled worker not trying to advance in their life as well as the person trying to advance is going to have problems with being scheduled in. The are the students and retired people that want to work as well as the unskilled and they might not be able to get as much time as they want working, and this creates a problem because they need to get another job to support their family. Even though raising the minimum wage sounds like an incredibly good idea there are so many twists and turns that make it seem not all that worth while. With the drawbacks of people getting fired and people not being able to get as many jobs in the area it could make things quite difficult.
Raising minimum wage would benefit the few who would still have jobs if they were lucky and were not laid off so companies could pay their employees the higher minimum wage pay. Although today's minimum wage isn't enough to make a low wage workers life great, it seems to be that is going to have to be like that for some time until a better solution is found to solve the minimum wage crisis.