Disadvantages of Minimum Wage for Businesses and Workers

It is quite common for someone to look at a problem and try to solve it with momentary solutions for they seldom look past the apparent indications of that specific problem. It is much easier to quench the thirst of several hundred people temporarily and feel good about yourself than to build a permanent well for thousands. The same idea applies to the practice of a “living wage” or the constant snowballing of a “minimum wage” in the United States of America. While a minimum wage is supposed to provide support for those that are underpaid and those unable to provide enough for their families, it tends to increase unemployment specifically amid unskilled teenagers.

The federal minimum wage was first introduced in 1938 as a provision of the Fair Labor Standards Act, originally set at 25 cents per hour, and raising up to $7.25 over the period of 2007 to 2009, to what it is today. Since then, many teens have benefitted from the minimum wage in the upper-middle-class whereas thousands of disadvantaged minority youths have been victims of unemployment. It is no surprise that most of the people who want to raise the minimum wage are educated upper-class men and women who know they will benefit from such an increase. The first thing that comes to the mind of the public when they hear that the government might raise the minimum wage is “I am going to get paid more for what I am doing now”, but they rarely think about how the long-term effect is going to play out in their lives. They do not realize the fact that if they are already being paid the minimum wage, increasing it would mean that their skills would also have to be increased. And their skills do not match what the minimum wage is going to offer, then their skills would have to be found elsewhere in the work field. Whenever the government increases the minimum wage, the cost of hiring employees also increases. The employers of industries will then be looking for employees who would fit the shoes of the new minimum wage rather than the old one. No company or industry is going to hire an inexperienced teenager or a retiree at the rate of $12 per hour when they can hire an experienced middle aged person. So, for that reason the minimum wage according to Roger LeRoy Miller in The Economics of Public Issues “merely enriches a few at far greater expense of many others, who can’t get jobs.”

According to an NPR interview between host, Mary Louise Kelly and social science correspondent Shankar Vedantam, as the minimum wage was increased in the city of Seattle it was observed that the restaurants were affected by the decrease in hygiene. As Srikant Devaraj from Ball State University in Indiana puts it during the interview, “We find that a dollar increase in minimum wage resulted in a 6.4 percent increase in overall health violations and 15.3 percent increase in less severe violations as a result of the increases.” This evidence shows that when the restaurants or any businesses for that matter, face higher costs of employees, they must find ways to cut them either through passing it on to their consumers or cutting the hours of the employees. Although, what Srikant Devaraj and his colleagues found was an increase in health violations in the restaurants. Kelly asks Vedantam, “What we're seeing here is the research shows if workers get paid more, to earn the same profit, businesses need to cut on something and where they're cutting is around the edges on hygiene?” He then answers her, “That seems to be what the research is suggesting.” Perhaps, a reason for health violations being the outcome of increasing the minimum wage could be that employees with new wages look at keeping hygiene up to par as something beneath them. They see themselves above that work rather than willing to simply get their hands dirty by taking out the trash or mopping the floors thoroughly. Another reason could be that employers focus more on filling positions that require higher skill sets and do not deem it worth hiring anyone with the increased minimum wage. Therefore, when the minimum wage is increased the restaurants may have to let go of one or more of their workers in order to compensate.

According to Miller, “Supporters of the minimum wage claim that it prevents exploitation of employees and helps people earn enough to support their families and themselves.” Although, Miller goes on to say that, “Even so, at $7.25 per hour, a full-time worker earns only about two-thirds of what the government considers enough to keep a family of four out of poverty.” Therefore, the claims of the supporters of the minimum wage fall short in meeting their presupposed assertions.

One scenario may be that because the minimum wage is not enough to support a family of four it requires both the father and the mother to work. When both the parents work full-time jobs 98% of married people earn above the minimum wage, therefore their income suffices to support their families. However, this concept will affect the living conditions for the children due to not having a parent available to them at all times. In Timothy 5:8 it is written, “Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.” Biblically speaking, it is the man’s role to provide for his family as the head of his household. It is also written in Ephesians 4:28, “Anyone who has been stealing must steal no longer, but must work, doing something useful with their own hands, that they might have something to share with those in need.”

According to the United States Department of Justice, “Over 10,000 ex-prisoners are released from America’s state and federal prisons every week and arrive on the doorsteps of our nation's communities. More than 650,000 ex-offenders are released from prison every year.” When we look at those numbers and consider the fact that we are as followers of Christ supposed to promote the ability to work for everyone in our society. When the government raises the minimum wage, we earlier looked at how this incapacitates an unskilled worker to acquire a job. Getting rid of the minimum wage would create many job opportunities for unskilled teenagers, immigrants, and ex-convicts to be able to sustain themselves and feel a part of our society. Therefore, when we look at the verse in Ephesians 4:28, we have to obey it by promoting wages fit for everyone to work and grow instead of promoting to raise the minimum wage. The minimum wage, just like all of the government programs such as Medicaid, and Medicare are supposed to promote the general welfare of the people of America and they do not, then they simply should not exist or be modified accordingly.