Benefits Of Minimum Wage

Minimum wage has always been a popular topic amongst discussion always staying quiet relevant. Whether one may be protesting for an increase or arguing against it, there are always very strong argumentative points on both sides in the war of minimum wage. Currently there have been large protests in many states for the minimum wage to be raised to $15. The idea is that an increase in minimum wage would potentially be beneficial to lower income families, however there is also some economic risks involved with a wage increase. Sometimes a wage increase is necessary due to inflation, however such a dramatic increase it could cause problems for the United States economy. Despite a $15 minimum wage being possibly beneficial to lower income families, a minimum wage increase would be detrimental to the United States economy because it would cripple smaller businesses, create an increased use of automation, and increase unemployment in minority youth.
The Former CEO of McDonald’s says that a minimum wage of $15 would be a job killer. “You talk about going from an average wage of $10 up to $15 for a new minimum, you’re talking about a 50% increase in wages. You look at that. Small business is going to get crucified with these rules, the joint employer stuff, the union organizing,
these restaurants can’t afford that… it’s inflationary and it’s going to cause prices to go up,” (Limitone). With such a dramatic increase chances like these aren’t worth taking, especially with the former head of a massive company saying it wouldn’t work out well. Ultimately, it would cause restaurant franchises to cut their employment rate and also force them to raise the prices of their foods to support the employees wage increase (Limitone). And because of that companies also would have to find another way to work around the wage increase, reducing, examples like lowering the proportion of food dispensed per order, and quality of the product could go down could be seen with the quick wage increase. One of the more recent workarounds companies have found to cut human labor is the use of automation.
If minimum wage increases too quickly some companies are looking to turn to robots to get the job done. Because once robots become cheaper than $15 dollar minimum wages, millions of jobs could potentially be replaced by robots; such as cashiers and factory workers. And in order to prevent this from happening would be to keeping the price of human bought labor slightly cheaper than that of a robot. Although why would a company chose to use a robot over a human? The answer is simple, robots are much more sanitary, and since they are programed to take specific order errors could become completely eliminated. Another benefit of using robots over humans is that you can always depend on the robot to show up on time. Market research done by ISBSWorld has determined that the average amount of employee’s working in the fast food industry has dropped almost more than 2 employees per restaurant in the past decade. If this trend continues to happen eventually a majority of entry level jobs could become replaced by machines (Limitone).
Another way an increase hurts the economy it would increase the unemployment among minority youth.
With an increase to minimum wage many older more experienced workers would be attracted to high paying entry level jobs. This could greatly hurt the opportunities of black teenagers. “The unemployment rate for African Americans ages 16 to 19, while down by almost half from 2010, still stands at 25%. That compares to 13.9% for white youth and 15.6% for Latino youth.” Another possible issue faced with the increased wages may cause teenagers to leave school early interrupting their education. If students are leaving school early that could hurt the growth and the economic structure of our
society.