One of the great things about living in a democracy, on top of the ability to vote our political leaders in, is the freedom to critique them for their perceived wrong doings. With the minimum wage set to increase to $15 an hour in 2019, this is certainly a topic that piqued my interest. As a person who has experienced working a minimum wage job, the thought of getting paid $15 an hour should excite me. It should seem like a great idea to me. But it doesn’t. Here are seven reasons I am personally against increasing to a $15 minimum wage.
1. Minimum Wage and Inflation
The whole point of increasing minimum wage is to help those with minimum wage jobs; the problem is, it doesn’t do that. As somebody who has worked in fast food, I remember when I initially started my job, the cost of a meal was about 8$ or so. A few years later, after cumulative increases in minimum wage equalling about an extra 1.20$ above the rate when I just started, the cost of that same meal is near 10$. Why? The more employers have to pay their employees, the more money they need to make to operate their company and still profit, and the easiest way to do that is to raise the price of a product. For example, if a grocery store pays their employees minimum wage and gets their products from a supplier who pays some of their workers minimum wage, in order to still maintain a profit the supplier will have to raise their prices, and the store will then have to buy the goods at the raised price and then sell them at an even higher price to ultimately still be a profitable business. What good are a few extra dollars onto your hourly wage when the cost of everything rises along with it?
2. The Effect of Inflation On the Lower Class
So now that we’ve analyzed the rising product prices that accompany minimum wage increases, let’s talk about how this directly affects those working minimum wage jobs. Simply put, those working minimum wage jobs to support themselves, and possibly a family as well, are considered to be on the “lower class” of the financial spectrum. Lower class citizens tend to opt for cheaper lifestyles. This means cheaper groceries, restaurants, clothes etc. One of the ways that these stores are able to keep their prices so low is by hiring inexperienced workers and paying them relatively low wages. As those wages, and as a result, products increase in price, lower class families who rely on those cheaper groceries essentially end up spending back what they made at work on those higher priced items.
3. Where Did the Jobs Go?
I remember a few years ago going to a McDonald’s in my area. They typically had at least two cashiers working, sometimes three or four. Now, anybody who has been to a McDonald’s recently has probably noticed something; they have kiosks. Customers can now place their own order, reducing the necessity for a high number of cashiers. Now, at a place where I used to see three or four, I usually only see one lonesome cashier working and during busy periods possibly a second person helping that cashier out for a matter of minutes. When I was growing up, I remember seeing the movie iRobot and becoming irrationally afraid that we would end up losing our jobs to robots. That may not exactly be happening, but I can guarantee you this: if an employer has to pay their employees an extra 4$ an hour for a basic job, they’re going to begin to devise ways they can reduce the number of employees they have to pay. It’s just that simple. Now, of course, the cost of installation and upkeep of machines are not free, but if one machine can replace three or four employees, at $15 an hour it will eventually pay itself off and be a profitable decision.
4. Where Did the Local Jobs Go?
God bless the Canadian business owners, who want to support Canadians. They want to employ Canadians to build Canadian products on Canadian soil and sell them to, well, Canadians. It’s great for the economy, creates a lot of local jobs, and also reduces the necessity of sweatshops overseas. However, what happens when that employer is told he or she now has to pay his or her Canadian employees $15 an hour to do even the most basic and simplistic jobs? Ordering from and/or doing business with sweatshops outside of the continent begins to look like a much better option to them. Yet another reason argument against such a major increase in minimum wage. It is also important to note that when people envision minimum wage jobs, many think of large companies that can afford to pay their employees a little extra, however, a lot of small, local businesses in Ontario employ many of their workers at minimum wage as well.
5. Who Needs School When You Can Make $15 An Hour With No Formal Education?
The most common motivator for high school graduates to opt to enroll in post-secondary schooling, as opposed to immediately entering the work-force, is money. Certainly not at the moment, but later on down the road the thought of a college/university-induced salary is a primary motivator for many people to spend tens of thousands of dollars, endure sleepless nights studying or leave their friends/family to study abroad etc. According to a 2011 survey, the average Canadian makes about 39,522.50$ in their first year of working after graduating university, which assuming they work 40hrs a week/52 weeks a year, works out to approximately 19$ an hour. That’s only four dollars more than the soon-to-be minimum wage. Now I’m sure that number is a bit higher in 2017 and things like vacation days weren’t accounted for, but the point still remains: how much motivation does a person have to spend upwards of $40,000 and four years on a university degree, when they can spend a few hours of training for a minimum wage job that pays near the same rate? This, coupled with the recent tuition increases of Ontario universities, just seems like a recipe for disaster.
6. The Correlation between Minimum Wage & Minimum Skill Requirements
With a stereotypical middle-high class job, the job security for workers comes from how unique they are. Jobs that only a few people are able to do or willing to do pay more, and for good reason. It makes sense, if a person gets a 4-year degree from a university, spends years interning, building a network & learning and then goes on to get a job in their field, they put themselves in a minute percentage of people on this planet who know as much about their field of work as they do. Of the approximate 7 billion people on this planet, a relatively small percentage of those have a post-secondary diploma/degree. Of those, an even smaller percentage have a diploma/degree in their specific field. Which means in the grand scheme of things, people with post-secondary education are extremely unique in terms of the knowledge they bring to the world in their area of study*. That’s what you pay for; you pay for a person’s expertise, which few other people on the planet have in that domain, and that is what sets a person in a well-paying job apart, gives them job security and makes them worth the money they earn. On the other hand, many jobs pay well on the premise that a small percentage of people on the planet are willing to do that job. Some jobs are incredibly dangerous, unclean, physically demanding or just unbelievably boring. But whatever the reason is, most people aren’t willing to do it. Therefore, employers must pay well to keep people interested in applying for and keeping the job.
Minimum wage jobs are not like that. At all. Due to the low requirements, low paying jobs are some of the most applied for positions in the workforce and they also don’t require extensive expertise to learn or do. Ask 10 people to work at a minimum wage job, and with a few hours of training, at least 8 of them will get the hang of it, most likely. They may not be great at the job considering their new status, but they’ll be able to carry out the tasks. Now, ask those same 10 people to do the job of an accountant or dental hygienist after a few hours of training and see how well that works out for them. Now I do genuinely believe that every hard working adult should be able to earn enough money to support themselves, regardless of their job. There are, also, many people doing that while working minimum wage jobs. However, the argument that minimum wage jobs don’t make enough to support certain luxuries or raising a family isn’t a very valid argument for raising minimum wage by such an absurd amount, because that isn’t what minimum wage jobs are meant to do. Minimum wage jobs are great for young people, people in school who need flexible hours, people with little-to-no work experience looking to boost their resume etc. They’re not meant for the breadwinner in a relationship of two people looking to settle down and start a family or buy a new house. So using the fact that minimum wage jobs don’t allow people to do things that minimum wage jobs aren’t intended to do, is just an absurd reason for a near $4 increase in minimum wage.
*I am well aware that many fields do not require post-secondary schooling/formal education to become extremely knowledgeable and useful in, that was simply an example.
7. The Impact On the Middle Class
A commonly acknowledged fact in first world countries, regardless of political beliefs, is that the country’s economy does best when the middle class is doing best. So how does this affect the middle class? First, let’s focus on its impact on the lower class. A rise in wages accompanied by a rise in prices for everything else and a loss of jobs, kind of negates the extra few dollars added onto minimum wage. As for the upper class, with the money they make, inflation isn’t going to burn a hole in their pockets anytime soon. But what about the middle class? The people who won’t be benefitting from higher minimum wages but will be affected by the inflation that accompanies it? Seems like a lot of hassle with no benefit for them.
But then again, these are just my views on it. I’m an open minded person, so if the facts change, so will my opinion. As for now, however, these are just my opinions. The opinions of a college kid working minimum wage, on an increase in minimum wage.