OPINION — The federal minimum wage has been $7.25 since 2009. While it is understandable that minimum wage earners cannot exist on their income, especially since the cost of living has increased substantially since 2009, increasing the federal minimum wage will cause a domino effect of multiple economic problems. Ironically, a quick increase in the wages of low-income workers will actually increase poverty and unemployment rates.
Many businesses providing minimum wage jobs will be forced to lay off workers or reduce hiring. Some may even be forced to close. When the businesses feel the pinch of increased costs of doing business, they inevitably pass that cost onto the customers. Since many of the minimum wage jobs are in the fast- food business, how would we, the consumers, feel about paying $10.00 or more for that burger?
An increase in poverty will become noticeable when the current earner of, let us say, $15 per hour finds that his/her wages stay the same but prices have increased. To offset this, the population in this income bracket and higher will demand cost-of-living increases and those companies will feel the pinch.
Many companies have already resorted to outsourcing jobs to countries where production costs are lower. Other companies have turned to automated systems and robots to replace employees. Consumers already pump their own gas, use self-serve checkouts and automatic teller machines, to name a few of the examples where jobs have been replaced by machines. An increase of the minimum wage will only give more companies reason to do the same and unemployment rates will soar. This will bring about more low-skilled workers without jobs and low-income communities would be hit the hardest.
Teenagers and young adults may be shut out of the workforce if the minimum wage is increased. Statistics show that 16- to 24-year-olds make up 50.4 percent of minimum wage earners. Many young people count on the low-skilled work to help pay their expenses while going on to school to acquire the education that will enable them to be eligible for higher paying jobs.
Increasing the federal minimum wage would harm the poorest areas the most. In areas where the cost of living and average incomes are especially low, it would cost employers more to pay their minimum wage employees and they would be unable to cover the cost by raising prices because their customers would not be able to afford their product or service.
While something needs to be done in order to keep low-skilled workers from poverty lane, an across-the-board quick raise of the minimum wage is not the answer.
The only winner in raising the federal minimum wage is the federal government. Each earner would pay a higher amount of income tax. The pockets of the working class will empty faster with higher prices while the government picks up additional revenue. Do we really want to believe that much good will be done with the increased tax revenue?
Submitted by Cherrie Cheran, Cedar City
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