Tuesday, February 25, 2014

S456 ARCHIVES: Troubles with Wages in America

~~ the following is a piece I did for the 2013-14 school year of "The Ram Pride," Ringgold High School's school newspaper ~~

Since 2009, the federal minimum wage has remained at $7.25 an hour, despite increasing once both years before. Many believe that minimum wage should increase, while others think that it would be bad for the economy. Some states, like California, have already raised their minimum wage, but the state of Pennsylvania has kept it at $7.25. Exactly how much to raise the federal minimum wage, and by when, is a point of contention amongst supporters. Remarks from the president during the last state of the union address prompted discussion on raising minimum wage nationwide, even though little progress is being made for supporters. 

Back in February of this year, Barack Obama said in the State of the Union Address that he would like to see federal minimum wage increase to $9 an hour, and then automatically increase after that with inflation. According to “Inequality.org,” the minimum wage “[a]djusted for inflation using the BLS online inflation calculator… would come to $10.55 per hour in 2012 dollars.” Obama is either compromising, or attempting to avoid bad economic implications for such a large increase. In his speech, President Obama points out that “a family with two kids that earns the minimum wage still lives below the poverty line.” What’s frustrating for proponents of this increase is that, as Annie Lowry from The New York Times writes, “the proposal would see the federal floor on hourly wages reach $9 in stages by the end of 2015.” That is a long time from now.

Recently, though, strikes that originated in New York from November have flooded the entire country. The Thursday before Labor Day, “workers at McDonald's and other fast-food chains conducted strikes and walkouts in nearly 60 cities,” according to USA Today. These protests aren’t specifically asking for a minimum wage increase, just a standard wage increase, but to $15. Still, these strikes express a large disappointment over wages for workers towards the bottom. Additionally, America as a whole supports a minimum wage increase to $9.00, with, according to a February poll from Pew, 71% in favor and 26% opposed.

I talked to Mr. Manko, Ringgold’s Advanced Economics Teacher, to get a grounded perspective on the matter. When I asked him whether or not there would be an extreme reaction from businesses to a minimum wage increase, he said changes would “happen gradually.” At the end of the day, he says businesses won’t let wage increases eat away profits, although “some may” just eat the costs. He did cite some chains like Sheetz that pay their workers above the minimum wage, and explained that offering good wages is an effective way of enticing people to work for you. When I asked whether or not Pennsylvania raising minimum wage independent of the rest of the country would have differing results from a federal increase, he said “you’d see an increase in cost of living,” citing other states that saw increased costs of living with a minimum wage increase. I challenged him by saying that it may have been the cost of living that prompted a minimum wage increase instead, and he conceded that it is a tough “chicken before the egg” problem. He did note that there are more to the equation than wages for workers, saying that benefits like healthcare and vacations are important.

Perhaps most importantly, I asked why the heck we haven’t seen an increase in minimum wage in around three years. His response: “Politicians are scared” of upsetting corporations. 

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