Dilbeck 1

Ethan Dilbeck

Professor Flanagan

English 1A, 77701

24April 2020

The Destructive Potential of Fifteen Dollar Minimum Wages

Minimum wage can be described as the lowest hourly wage an employer is allowed to

pay his/her employees for the work they do. In the United States, laws surrounding minimum

wage can be enforced on a tribal, local, state-wide, or federal level. The federal minimum wage

as of now is seven dollars and twenty-five cents though, according to the Gale Database, twenty-

nine states have wages higher than this (Gale par. 1). In the years of 2017 and 2019, a bill was

proposed to the senate to more than double the minimum wage by raising it to fifteen dollars. A

pay raise of this caliber is far too dangerous for the United States Economy for the following

reasons: Businesses that rely on these employees will be put out of business, entry level

employees will find themselves unemployed more often, businesses will raise prices for

consumers in order to compensate for the wage, minimum wage employees will find themselves

working far fewer hours, and higher wage employees will find themselves far worse off

mentally.

There are several businesses across the country that rely heavily on the work of entry

level employees. Walk into just about any chain fast food restaurant and you will see a multitude

of young adults and teenagers standing behind the counter. These employees are all more than

likely working for a minimum wage to either get some experience under their belts, earn some

extra money for themselves, or both. Because these employees are working for a minimum
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wage, the businesses they work for are able to hire large quantities of these eager young people.

If the minimum wage is raised, these businesses will become unable to pay these inexperienced

employees and will likely be put out of business. In an article by Kim Palmer titled, “Can

Restaurants Handle a $15 Minimum Wage”, Kim quotes Chris Armington, the owner of a local

pub who states, “My biggest expense is payroll. It exceeds my rent. Two weeks of payroll is

more than double my rent each month, if that increases by 200% (sic), it would potentially put

me out of business.” The only chance these businesses would have to remain open would be

finding more experienced workers that will work for minimum wage (Palmer par. 8)

Even if these businesses do manage to stay open, that will not save the hundreds of

thousands of young employees that will be forced into the unemployment line. In an article titled

“ABOVE THE BARE MINIMUM: But at What Cost?”, the author, Marina Krakovsky, says,

“Harry Holzer, a professor of public policy at Georgetown University, points to the 2014

report from the Congressional Budget Office—based on data from a range of previous

studies—-which estimated that raising the federal minimum to $10.10 per hour would

cause a wage increase for 16 million to 24 million people, but would also spur the loss of

about 500,000 jobs. However, job losses could swell much higher than that, especially in

the long-term, if wages went up higher still. “Going to $15 or even to $12 will generate

much bigger employment losses,” Holzer says.” (Krakovsky 33).

This inability to obtain an entry level job will act as a sort of impenetrable wall that will stop

these workers from even making it over the first hurdle of job experience that allows them to get

a higher wage job. This then will lead eventually to more and more of these young people ending
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up homeless on their streets, throwing their lives away before they’ve even began. They get to

experience the true minimum wage of zero dollars an hour, the wage of an unemployed person.

Those in favor of a fifteen-dollar minimum wage may say that such a wage would

increase spending among minimum wage workers and therefore, improve the economy. This,

however, is untrue because as the minimum wage increases, businesses will be forced to raise the

prices of the products they sell, as well as cut employees’ hours which will leave them with a

similar annual salary to that of which they already had. A higher bottom line income leads to

inflation which leaves the economy right where it started. In an article by Amelia Lucas, a

CNBC journalist, Lucas presents a survey of 173 American restaurants performed by Harri, a

management software company, in which 71% of participants said that their response to a federal

minimum wage hike will be to raise menu prices (Lucas par. 8). 64% said they will cut

employees’ hours worked in order to compensate for the extra payroll costs (Lucas par. 9). This

effect will not likely be limited to restaurants. We can expect to see a general increase in costs

including properties and insurances which will render this “living wage” incapable of financing a

life.

Another argument made by those in favor of such a wage is that raising the minimum

wage will improve the mental health of those living in poverty. In an article by Bill Gardner

titled, “How to Improve Mental Health in America: Raise the Minimum Wage”, he says,”Getting

a wage increase helps workers cope with life stresses that promote the risk of depression and

other mental health disorders.”(Gardner par. 4) This argument can be debated the same as before

in the sense that giving these people more money will not help them because as they get more

money, they are accelerating inflation which in turn increases the costs of general goods and

services, including those that benefit mental health. Gardner later brings up a study from the
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British Household Panel Survey, which is a group of families in the UK who are interviewed

annually about their general quality of life. In this study there were three groups. One group

consisted of low wage workers who received a pay increase from the minimum wage. The

second group was made up of the workers who did not receive a pay increase because their

employers refused to obey the law. The third and final group consisted of workers who did not

receive a pay increase because they were already slightly above the minimum wage. The

research found that group one was the only group that saw an increase in mental health. Gardner

then makes the statement, ”If getting higher wages is good for you, then the change in the mental

health of workers who received higher wages ought to be greater than the change in the two

groups of comparison workers who did not” (Gardner par. 6). This statement is false as it

neglects to acknowledge the fact that the mental health of groups two and three are likely to

decrease greatly. This means that two thirds of this study would have a decrease in mental health

which would actually support the idea that increasing the minimum wage would have an overall

negative effect on general mental health.

It is plain to see that a raise in the minimum wage to fifteen dollars is far more destructive

than it is constructive. Entry level businesses will be put out of business, entry level employees

will raise the unemployment rate, businesses will compensate for the extra payroll costs by

raising their rates, minimum wage employees will be sacrificing the hours they work, and

employees that work for more than minimum wage will find themselves at or just above it. The

youth of America are the future of the country. If they feel satisfied with a minimum wage job,

who will be the doctors, engineers, scientists, etc. of the future? These employees need to be

taught that the true solution to improving income is to climb the ladder of business by working

harder. Knocking the rungs out of the bottom only limits the heights they can achieve.
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Works Cited

Gardner, Bill. "How to Improve Mental Health in America: Raise the Minimum Wage." Gale

Opposing Viewpoints Online Collection, Gale, 2020. Gale In Context: Opposing

Viewpoints, https://link-

gale-com.reedleycollege.idm.oclc.org/apps/doc/NXCSYO935611839/OVIC?

u=cclc_reed&sid=OVIC&xid=0b36d40b. Accessed 22 Apr. 2020. Originally published

as "How to Improve Mental Health in America: Raise the Minimum Wage," New

Republic, 4 May 2016.

Krakovsky, Marina. “ABOVE THE BARE MINIMUM: But at What Cost?” HR Magazine, vol.

62, no. 7, Sept. 2017, p. 30. EBSCOhost, search.ebscohost.com/login.aspx?

direct=true&db=f6h&AN=125080311.

Lucas, Amelia. “Higher Minimum Wage Means Restaurants Raise Prices and Fewer Employee

Hours, Survey Finds.” CNBC, CNBC, 25 Apr. 2019, www.cnbc.com/2019/04/10/higher-

minimum-wage-means-restaurants-raise-prices-and-fewer-employee-hours-survey-

finds.html.

Meer, Jonathan. “The Hidden Costs of the Minimum Wage.” Gale In Context: Opposing

Viewpoints, 2019, go-gale-com.reedleycollege.idm.oclc.org/ps/retrieve.do?

tabID=FeaturedContent&resultListType=RESULT_LIST&searchResultsType=SingleTab

&searchType=TopicSearchForm¤tPosition=3&docId=GALE

%7CSNQOCJ181060194&docType=Viewpoint+essay&sort=Relevance&contentSegment

=ZXAY-MOD1&prodId=OVIC&contentSet=GALE
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%7CSNQOCJ181060194&topicId=00000000LVXT&searchId=&userGroupName=cclc_r

eed&inPS=true.

"Minimum Wage." Gale Opposing Viewpoints Online Collection, Gale, 2019. Gale In Context:

Opposing Viewpoints,

https://link-gale-com.reedleycollege.idm.oclc.org/apps/doc/PC3010999333/OVIC?

u=cclc_reed&sid=OVIC&xid=07a49521. Accessed 15 Apr. 2020.

Palmer, Kim. “Can Restaurants Handle a $15 Minimum Wage?” Small Business Reference

Center, Crain's Cleveland Business, 29 July 2019,

web.a.ebscohost.com.reedleycollege.idm.oclc.org/sbrc/detail/detail?vid=3&sid=468d7a0a-

7133-4049-9874-dec8aac221c3%40sdc-v-

sessmgr02&bdata=JnNpdGU9c2JyYy1saXZl#db=b9h&AN=137857597.

Stepman, Jarrett. "A Higher Minimum Wage Fails in California." Gale Opposing Viewpoints

Online Collection, Gale, 2020. Gale In Context: Opposing Viewpoints, https://link-gale-

com.reedleycollege.idm.oclc.org/apps/doc/SPJIXG388702891/OVIC?

u=cclc_reed&sid=OVIC&xid=170f871e. Accessed 13 Apr. 2020. Originally published as

"A Higher Minimum Wage Fails in California," The Daily Signal, 7 May 2019.