Should Minimum Wage Be Avoided

More and more people start to pay attention on Economic area, especially they care about their wages. The reason is that wage really important for supporting people’s daily life. In general, higher wage can afford some colorful life, but lower wages sometimes even cannot afford a dinner for a people. Thus, many people and the government want to increase the minimum wage for ensure people’s basic life. In CNN NEWS website, the author Jeanne Sahadi reported a news about increasing minimum wage. This news states that the Berkeley Labor Commission want to increase the minimum wage to $19 by 2020, and many employers hold a negative viewpoint because of the decreasing benefits. However, I disagree with these employers’ perspective. I think the negative impact of raising the minimum wage can be avoided. Dorothee Mitrani, one of the employer in the news, said, “We can raise our prices. But you can’t charge $25 for a sandwich.” Dorothee thought that if they have to increase the minimum wage for employees, it means the operating cost are increased also. And if operating cost are increased, the benefit will be decreased automatically. For solving this problem, the only way they can do is to charge more money per product to customer. However, the problem is that increasing price will decrease the quantity of demand. In other words,
there will be less customer are willing to buy their product, and their benefits will be decreased. Hence, Mitrani has a negative opinion about raising the minimum wage. In fact, Dorothee Mitrani’s worry can be solved by increasing the minimum wage. The reason is that Mitrani address the impact of raising minimum wage only from the perspective of an individual business owner. Mitrani did not think from employees’ situation. As employees, they also have another status---customers. If the minimum wage can be increased, it means employees who usually get minimum wage will get more wage than before. Thus, they will have extra money to buy food and other basic goods. For Doreothee’s store, she can sale more product because of the increased demand, and she can get more benefit than before even though the operating cost is increased. Furthermore, the news also report Armstrong’s opinion.
He said, “if a business goes out of business, job disappear and the city doesn’t have a tax base.” In other word, Armstrong thought one of the negative influence of increasing minimum wage is decreased employment rate and tax base. The reason is that raising minimum wage will lead to a higher operating cost for employer, and if employer cannot increase the price of product, they have to get a lower benefit than before. In a long time, employer may choose to fire some employees for decreasing the operating cost. It is decrease the employment rate and government tax
base. Nevertheless, I have different opinion. Like what I said in the fourth paragraph, increasing minimum wage can give some people more money to buy extra food, so the increased demand can bring the higher business volume. It means employer can get more profit. The extra profit can recover the extra wage, and even over the extra wage. Thus, employer does not lose money, then employer will not fire any employees. In addition, employer can also increase the price a little bit, and people still can afford it. The reason is that the little increasing of price just has big affect on people who are poor. And the big reason that why people are poor is that they get the minimum wage. Thus, if employer increases the price a little bit, poor people still can afford it because of the raising of the minimum wage. So the result of increasing the minimum wage will not decrease the employment rate and tax base in a long term. In conclusion, I want to say that I support the Berkeley Labor Commission’s proposal about increasing the minimum wage because it will not decrease the profit of employer, the employment and the tax base. Here is the link: http://money.cnn.com/2015/09/16/news/economy/berkeley-minimum-wage/index.html