Hey, Check this Out!--Minimum Wage is on the Rise

Charlie McGill
Mr. Roddy
GPHC
3/15/2020
Minimum Wage is on the Rise

The article I read for the Hey, Check this Out blog was about Seattle's switch to a $15 minimum wage and the economic repercussions of that change. Analyzing Seattle's economy after their wage increase is incredibly important for two reasons. First, both Bernie Sanders and Joe Biden have a $15 minimum wage (a living wage, as Sanders calls it) as a part of their platform, and it's vital we understand the economic effects of that policy before voting for either candidate. Secondly, having case studies is necessary when debating on whether or not to enact policy, and there is much debate surrounding a $15 minimum wage. Although the economic results of Seattle's wage increase don't lead to a conclusive verdict on the debate surrounding a living wage, I think it makes a very good argument in favor of $15 hourly compensation.

In 2014, Seattle passed a law that gradually increased the cities minimum wage to $15 an hour by 2021. After allowing a few years for the natural effects of higher wages to take place, the University of Washington and The University of California at Berkley completed studies on the economic implications of a living wage in 2017 and 2018, respectively. Their findings are part of what leads me to believe a $15 minimum wage would benefit the economy; although the University of Washington found that an increase in wages led to a decrease in hours worked, resulting in less overall pay for low-wage workers, a follow-up study found that this wasn't the case for all workers and that experienced workers in low-wage jobs saw their total compensation rise. Additionally, the University of California found that rise in wages led to an increase in overall pay and no job losses. To me, this is conclusive evidence that a $15 minimum wage benefits workers. As for the effects on businesses, those are more complicated. However, their are two things that make me believe businesses of all sizes could manage such a steep increase in hourly compensation: the fact that in the 50's, a time of economic prosperity, the minimum wage was $22 in today's money, and the interviews that CNBC conducted on Seattle's business owners. Those interviews were very revealing to me, as they showed that businesses who innovated and adjusted their business models to account for a hike in labour costs thrived. A business can't pretend like a $15 minimum wage won't increase their total costs, and advocates for a living wage shouldn't either. However, it is just as ignorant to believe that with proper adjustments and preparations a business can't thrive. As the two University studies revealed, a $15 minimum wage led to richer low-wage workers. That means those workers can invest back into the local economy by going out to eat more and spending money on various products. A living wage isn't anti-business; it simply allows the working class to live in dignity. 

Of course, we will never truly know what a $15 minimum wage will do for the entire country until we try it. Seattle, as with any singular case study, shouldn't act as conclusive proof for whether or not a policy is good or bad. There are always limitations in a case study. In Seattle's instance, they had a booming economy before they increased wages, so we may never know if $15 hourly pay will work in sinking economies until it is tried. However, the success of Seattle along with the facts and economic theory surrounding a living wage lead me to believe it is necessary to unlock the next step in economic growth. 

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