CAPS Confer: Should the federal minimum wage be raised?

The federal minimum wage should be raised. 

 Currently, the federal minimum wage is seven dollars and 25 cents an hour, which has stayed unchanged since 2009. The newly-inducted president, Joe Biden, implemented an executive action on January 22 that requires all federal workers who are paid less than 15 dollars an hour to be identified and provided suggestions on how to increase their wages. This action also has the potential to cause federal agencies to mandate that all contractors pay a 15 dollar minimum wage. 

   The raising of the minimum wage a majority of potential benefits that are primarily supported by the claim that an increased wage will put more money in the hands of employees, which will lead to more money that can be put back into businesses and services, which fuels the economy. This gradual increase of minimum wage to $15 by 2025 will also benefit around 21 percent of the US workforce, which is nearly 32 million workers. People that work in jobs that are minimum wage, like some restaurant workers, personal care assistants, and hotel housekeepers could benefit greatly from an increase that would earn them an additional $3,300 a year.

   Another benefit of increasing the federal minimum wage is that it could diminish both the racial and gender wage gap. According to, “African Americans and Latinos are paid 10 to 15 percent less than white workers with the same characteristics”, so the new act would therefore see a $3,500 increase annually for a year-round worker. In addition, when the minimum wage increased during the Civil Rights Era in the 60s, it “significantly reduced Black-white earnings inequality and are responsible for more than 20 percent of the overall reduction in later years”.

   This increase is one that is needed urgently, as more than one-third of workers who are employed in residential or nursing care facilities would experience an increase in their wages . These people, as well as other front-line workers, are extremely important to society and especially important now that the world is in a state of a global pandemic. Seeing a pay increase for these kinds of workers would keep them on their feet during a time of need.

   One of the main counter arguments against raising the minimum wage is that it will cause inflation, small business closure, and job loss, but this isn’t necessarily true. In the standard business model, raising the minimum wage will cause labor to become more expensive, and therefore jobs will be lost, but this was not the case for Seattle when they decided to raise their minimum wage from $9.47 to $15 an hour over seven years. 

   A team of researchers from the University of Washington were commissioned by the City of Seattle to conduct research on the effects of the wage increase. According to Idahopress, “The team’s most recent findings, released in October through the National Bureau of Economic Research, found that low-wage earners in Seattle are earning more and remaining in their jobs longer.” In addition to that, the article also mentions that businesses did not attempt to leave the city, which is what many would have assumed to be the case following a minimum wage increase. Now, it is worth noting that during this time the company Amazon was hiring thousands of workers in Seattle, so if this study is deemed irrelevant in regards to supporting the argument for an increase in the minimum wage, another case study solidifies the point.

   Similar to Seattle, Washington D.C. raised its minimum wage from $5.25 an hour in 1993 to $9.50 an hour in 2014, and they have continued to raise it to $15 an hour in 2020. According to a study published in 2014 titled Effects of a Higher Minimum Wage in the District of Columbia, by Austin Nichols and Jonathan Schwabish, “We find no clear evidence of a decline in employment in DC following the increase in the minimum wage in 1993”.  This study, conducted by the Urban Institute, analyzed the long-term effects of the increase of the minimum wage in Washington D.C. with respect to its neighboring counties and found that there was also no clear evidence of an employment decline.

-Lawson Pollard (Reporter)

The minimum wage should not be raised. 

 The minimum wage, both federally and in North Carolina, has been  $7.25 since 2009; however, across the US, state legislation has raised the minimum wage, the highest being almost double the federal wage in Washington at $13.69 per hour. Now, federal legislation is pushing to raise the minimum wage to $15 an hour, and many states have already raised the minimum wage or are in the process of doing so. Many people support the raising of the minimum wage; however, the minimum wage simply should not be increased.

   Raising the minimum wage will have many obvious and many not-so-obvious effects on the economy. The direct increase in wages of millions of American workers currently earning less than $15 an hour is the obvious and intended effect of the raise. Those who support the raise advocate that it will lift people out of poverty and boost the economy; however, there are many other consequences to consider. 

   One of the most significant negative impacts is the loss of jobs for teens and low-income workers. Employers do not want to pay their employees poorly; there simply is not an infinite amount of money available to the employer, especially if the business is small and growing. The steep increase in the minimum wage would mean the entire wage base would rise, meaning that all employees would want to see some increase in their wages. Small businesses in particular would be especially vulnerable to collapse because of the sudden spike in expenses. Many employees would be laid off. Where a company before could pay two people $7.50, they can now only pay one person $15. 

   These layoffs would most dramatically impact lower level and local workers. A huge number of jobs in agriculture would be lost and millions of farmworkers would be laid off. Teens as well would be turned away from jobs. Employers simply can’t afford to pay teen employees working a menial job $15 an hour. According to a study by The Employment Policies Institute, which surveyed 197 economists, 84 percent believe a minimum wage of $15 an hour will have negative effects on youth employment. 

   Furthermore, only six percent of those economists believe that a $15 minimum wage is an efficient way to target individuals in poverty. Overall 74% of the economists opposed raising the minimum wage to $15.

   Another major reason that the minimum wage should stay put is motivation and incentive. Capitalism and a free market are two of the things that make America so great. Anyone who has a strong work ethic can be financially successful in the US. The basis of our capitalistic economy is that people are motivated and incentivized to work and do their job well by the promise of financial gain. If the government imposes a minimum wage that guarantees workers a comfortable wage, the motivation to do your job well has been significantly reduced.

   The only real argument for raising the minimum wage is to decrease poverty levels by providing more capital to the lower class of workers; however, it is important to realize that simply giving people more money does not fix the problem. The money must come from somewhere, and that somewhere is employers. Consequently, employers now have to raise prices to keep up with new payroll expenses, and then everything costs more. And then where does that leave us? Back where we started, except with a significant hiccough in the road. Many businesses would have likely been forced to close or lay off many people.

   If our goal is to reduce poverty, let’s not just raise the minimum wage and see what happens. Let’s focus our attention on how we can fix a broken system without simply putting a band-aid on it. Instead of forcing employers to increase wages perhaps levy a corporate tax that provides funding to career counseling centers or higher education institutions. Doing this would sift out those who don’t want to work to support themselves from being a burden to the rest of the hardworking, tax-paying citizens. In the end, raising the minimum wage is not a wise idea, and certainly not to $15. 

– Walt Brunson (Reporter)