Effects of Raising the Minimum Wage

Multi Genre Project By: Ethan Klemons Connie Douglas: English 1102-093 5/1/2014

Dear Reader, My name is Ethan Klemons. I am currently a Freshman at the University of North Carolina at Charlotte and am in the process of pursing a degree in Accounting. When we were assigned this line of inquiry project, there were many topics that came into mind. Since we could only choose one, I decided to research the effects of increasing the minimum wage. This is a topic that I have become very passionate about other these past couple of months. Through my own personal experiences along with my extensive amount of research, I have created my personal bias being against increasing wages. The minimum wage is a growing concern in America that was recently reintroduced as a controversial issue through president Obamas proposed increase to $10.10 per hour. I currently am an employee at Auto Bell Car Wash. I have worked here for over 3 years now. At Auto Bell I personally make $8.00 an hour, other coworkers make around $7.25. This job taught me the benefits of hard work as I was promoted to crew Leader within the first year. The way I look at it, minimum wage jobs are meant to be a starting position for which people can advance from. In addition, personal experiences in the work place have led me to believe that increasing the minimum wage is not only harmful to the employer but employees such as myself. More details on there are listed through certain elements of this project. The intention of this project was to help explain my viewpoint on the issue. Currently, around 70% of Americans approve a minimum wage increase. In my opinion, a lot of these people also lack a full understanding of its effects. In my multi-genre project, I have included a pro-con list, a photo with a description, and a persuasive essay. While there are indeed two sides to this issue, it is still important that we are informed before making a decision as serious as this one. If you increase the minimum wage, you are increasing the wages of everyone else. Whether or not you feel this is right or wrong, that shows the extent to how serious this issue is. I hope you find this issue as interesting as I did. More importantly, I hope you gain an understanding of the issue and understand that there are a variety of factors that come into play.

Thanks, Ethan Klemons

Please note that this list merely shows the common arguments by each side. I do not necessarily agree with them and personally do not believe some of them to be true. However, the validity of each is still up for debate.

Pros Vs Cons
Of Raising the Minimum Wage

Pros

Cons

-Gives employees more -Takes away money from spending power to help the employers that stimulate the economy they could use to -Allows employees to invest and create jobs accommodate for a in the process. rising cost of living. -Most employers today -Needed so that already pay their employers dont take employees well above advantage of cheap minimum wage. labor -Results in unemployment -70% of general -Reduces the demand for Population showed to be labor. in favor of increase -Employers could raise the price of their product, which raises the cost of living. -does not stimulate the economy because it takes money from someone else that could spend it.

As you can tell, the number of cons far exceeds the pros. While this may appear to some to be a biased list, this is the reality. Throughout my extremely extensive research, I found that the majority of the articles were in favor of increasing the minimum wage. Despite that fact, I noticed that they all seemed to repeat each of those pros listed above. The difference between the articles was their knowledge on each pro and being able to support their own personal beliefs. More details on the pro and con side are listed throughout my entire e-portfolio.

Raising the minimum wage doesnt seem that beneficial?!?!

You might be wondering what this picture has to do with the effects of minimum wage. While it may not be evident at first sight, this image is extremely effective in showing the consequences of an increased minimum wage. I am an employee at Auto Bell Car Wash. I will start out by stating that you will not understand why it says censored, that is a joke for the workplace. In this picture, I am standing next to a fellow co-worker waiting to clock in for work. Even though we were scheduled to clock in an hour earlier, business was too slow to allow that. This was the

extreme that management went to make ends meet. While this business practice is extremely unethical, the business needed to do whatever it took to survive. There is not a doubt in my mind that by increasing the minimum wage, my coworkers and I will have a sharp reduction in hours. If this is not the case, there will be more layoffs or a possible increase in the price of our service. While many people automatically assume that the business is trying to take advantage of cheap labor, I can counter that also by using this example. At Auto Bell Car wash, I get paid $8.00/hour plus tips. Auto bell, exceeded the minimum wage despite the fact that tips would bring that number up to nearly $25/hour. The first thing youre probably thinking is that Auto Bell must just be the exception to the assumption mentioned above. The fact is, many businesses already pay their employees more than the required amount. The percentage of people making the minimum wage is extremely small for this exact reason. If the business was trying to take advantage of cheap labor, why would they pay more than the required wages? While I would probably get much more hours if the wages of your basic employee were lower; this proves that in our current society, the business is not always trying to abuse the system.

Sounds like it hurts the people it tries to help?!

Persuasive Essay In an economy that has become increasingly difficult for citizens to make ends meet, many people have suggested raising the minimum wage as a solution to our problems. In recent news, we have seen the issue arise through president Obamas proposed increase to federal wages. While that idea sounds appealing to just about any minimum wage employee, the idea could be more detrimental than many anticipate. We have used this approach many times in our past but have we really seen any significant impacts? While economists have shown to be split on this issue, my personal experiences and research have assured me that raising the minimum wage is not the right thing to do. Jobs are created through the success of a business; making it more difficult for businesses to make ends meet is simply foolish. In 1938, the United States enacted its first minimum wage laws under the Fair Labor and Standards Act (Driscoll). Prior to this date, minimum wage laws were considered to be an unconstitutional concept. It had been introduced several times in the 1920s but never really passed. Some states attempted to put minimum wage laws into effect during this period; however, they were immediately over-ruled due to the liberty of contract grounds (Driscoll). This basically stated that the employers had the freedom to enter into a mutually-acceptable agreement with employees (Driscoll). When the minimum wage was enforced in 1938, it started at a mere .25 cents/hour (Ford). Since then, it has risen to $7.25/hour on the federal level and close to $10/hour in some states. There are many possible outcomes of increasing the minimum wage. Since a business is going to do whatever it takes to survive in a struggling economy, it is likely that raising the minimum wage would pose more harm to the very people it is trying to help. There are 4 things that the employers could do. They could raise the price of their product (which raises the cost of living), reduce employee hours, fire employees, or stop hiring completely. As you can tell, none of these options are beneficial to minimum wage employees. Supporters of raising the minimum wage often claim that there is no evidence to

suggest significant unemployment hike (CBO). There are several ways in which that can be countered. For starters, the business has several other options aside from terminating employees. That number could be low simply because the business has the power to take any of the approaches listed above. It flattens that percentage out a bit. Your basic high school economics class teaches the law of demand. The law of demand states that as the price of a good or service increases, consumer demand for the good or service will decrease. This concept applies to workers as well. Lets say John cuts grass for his neighbors for $5 per mow. His neighbors would probably be happy about that and John would be happy to have a job. Now lets say John raised the price to $20 per mow. The neighbors might still be happy to pay that but if John raised it to $100 per mow, poor John would be unemployed. This is no different than with minimum wage workers. If you force businesses to pay them more, the demand for their labor drops. As a consequence, a business might have to settle for fewer workers which is harmful to both the employer and employees. As you can tell, the law of demand is a pretty basic concept that just about any business must follow to survive. My personal experiences in the workplace have also helped me to forge my own bias. I work as car detailer at Auto Bell Car Wash. While I was making above minimum wage plus tips, I learned a lot about the measures a business will take to make ends meet. It was not an uncommon occurrence at Auto Bell to have to wait several hours to clock in. Even if you were supposed to arrive at say 2pm, you could often be stuck waiting up to two hours to clock in. There were also many days where you would come in to work for a manager to tell you to go home. Although this is a very unethical business practice, the business will do whatever it takes to survive. Even as a preferred and valued employee, this was still very common. Though this was very frustrating as an employee, I was just grateful to have the job. I not only wasted time out of my life but lost money. If you raise the minimum wage, I guarantee you that there will be much more days like that for me and my fellow coworkers.

One common misconception made by supporters of raising the minimum wage is the belief that it will stimulate the economy (Ford). These people tend to claim that by raising the minimum wage, you give more spending power to these workers that they can use to spend and help businesses grow. This would be the case assuming that money simply came out of know where. Obviously that is not the case. Raising the minimum wage is like an entitlement program where the concept of wealth redistribution comes into play. The money that would go into raising the minimum wage comes out the pockets of not only the employers but other workers. This is not stimulating the economy. While it may give these employees more money to spend, it takes the spending power of the business and other workers. If anything, it is much more economic stimulating to let the employer save some money to invest in their business which could potentially create even more jobs in the process. While there are indeed two sides to this issue, the biggest thing to look at is how this issue affects the overall population. If you raise the minimum wage, you are not only raising the wages for entry level employees; you have to raise pay for everyone else. Obviously, a cashier should not be making the same amount of money as a manager. Even though the economists are split on the issue, it is also likely that some of them tend to be stubborn and stick with their political partys consensus. It is important that the people understand how many variables to consider when making a decision as serious as the minimum wage. If it was as simple as many people think it is, raising the minimum wage would have proven to be a success by now. It hasnt.

Sounds like theres a lot more to it than we think

Rationale
As you have already seen, I chose to do a photograph, pros-cons list, and persuasive essay as my three genres for this project. I believe that each of these genres have proven to be interconnected to show the consequences of raising the minimum wage. Below, you will find my rationale for each genre that I chose for this project.

The Photo: I chose to do a photo of myself working at Auto Bell. The reason I chose this was because it shows my personal experiences on the matter. I have experienced first-hand the potential effects of raising the minimum wage. These personal experiences were also constantly reiterated throughout this entire project. The purpose of this genre was to give the reader a visual understanding of who this issue truly affects and why it is so important. A lot of people think that raising the minimum wage would be beneficial to employees such as me. The reality is, however, that It produces far more negative consequences for the very people it intends to help. The Pro-Con List: I believe that the pro con list does the best job at providing the general views of each side. While I personally disagree with some of the components on it and question the truth of them, it points out what each side believes. Even with my extensive amount of research, the cons exceeded the pros. That is not to say that one side is right or wrong, it is simply showing the reality and you are free to question the validity of either of side.

The Persuasive Essay: In my opinion, the persuasive essay did the best job with portraying my particular viewpoint. In writing this essay, I made sure to include the other side but also refute those views. By being informed on the issue, I was able to counter almost every argument in favor of raising the minimum wage. Even though I believe that their view is flawed, however, this topic is still under heavy debate and has no right or wrong side. I took advantage of this assignment to write out everything I felt about the issue. I did not intend on swaying the opinions of my opponents but rather attempted to explain my thought process on the issue.

Reflective Letter:
In doing the multi-genre project, I never would have thought it would be such a great way to introduce my topic. Rather than simply writing a long research paper, this has allowed me to give the readers visual evidence of the issue at hand. The picture allowed me to explain my personal experiences. The procon list helped me to layout the general ideals of both sides and also served as additional evidence for my own side. The research paper allowed me to spew all my final thoughts and perspectives into one paper in an intellectual manner. Writing about this topic didnt change my opinion at all. What it did do, however, was expand my thought process and allow me to consider all sides. I learned to use the other side to my personal advantage. Additionally, my mind was opened to new ideas that I never even came upon in my research. I became a critical thinker. In this project, I accomplished quite a lot. I already mentioned that I became a critical thinker. What I truly accomplished was becoming an expert on the issue. While there is still a lot that I could learn, I am confident that I have the ability to refute just about any opposing claim. The main purpose of this assignment was to reach out to my peers. I want my audience to understand that there are so many factors to consider when talking about the minimum wage. If the concept was as simple as many people think, this topic wouldnt be under discussion. Whether you agree or disagree with me, I do not care. I simply want you to gain an understanding of the subject before formulating your bias. I hope you can appreciate that. Thank you.

Ethan Klemons 03/25/2014 English 1101 Annotated Bibliography "CBO Says $10.10 Minimum Wage Would Help Many, Hurt Some." UPI Top News (2014): Points of View Reference Center. Web. 24 Mar. 2014. This article came from UPI Top News and showed a clear favor of raising the minimum wage. The article was very biased and presented information that may be accurate but could lack the examination of other factors. For example, the site said that many small business owners agree with raising the minimum wage which is contradictory to another source which showed them divided on the issue. The article opened up by using data released by the US Congressional Budget Office projecting a job loss of 500,000 employees if the minimum wage was increased to $10.10 which is a relatively small number. What this fails to account for is the additional jobs lost when less hiring takes place. The number could potentially be significantly higher. It is difficult to use numbers in an issue such as this where a number of factors come into play. The author of this also states that more than 70% of Americans are in favor of raising the federal minimum wage. The article did show that there is a large number of economists who are in favor of raising the minimum wage yet did not show the number of economists who oppose it. I felt that this source was very useful, however failed to show the other perspective. Driscoll, SallyGrant, Richard A. "Raising The Minimum Wage: An Overview." Points Of View: Raising The Minimum Wage (2013): 1. Points of View Reference Center. Web. 22 Mar. 2014. This source was classified as a book under the points of view database written by Driscoll, Sally, Grant, and Richard A. The source did an excellent job at giving the history of minimum wage and also explaining the two opposing viewpoints while presenting little to no bias. By providing mostly common facts on the issue, it allows the reader to gain a general understanding of the subject without having particular views subjected upon them. According to this article, minimum wage was at one point considered an unconstitutional concept. It was introduced several times in the 1920s but never really passed. When certain

minimum wage laws were put into place, they were immediately over-ruled due to the liberty of contract grounds which basically said that the employers had the freedom to enter into a mutually-acceptable agreement with employees. The minimum wage was later implemented in 1938 under the Fair Labor Standards Act. Since then, the minimum wage has increased progressively to the rates that we are familiar with today. The article explained the two different viewpoints stating that republicans generally view the minimum wage as an intrusion into the free marketplace and as another welfare program. Republicans also are concerned that raising the minimum wage would result in lower profits for businesses, layoffs of teenage workers, and increased costs of goods and services. In addition, many employers are already paying their employees slightly above the required minimum wage which shows that the businesses are no longer abusing the system. Democrats, with the support of labor unions, believe that the government is responsible for making sure all employees earn a fair wage that is tied to inflation. Overall, this article did a very good job at explaining the history of minimum wage and managed to show very little bias. Dugan, Andrew. "U.S. Small-Business Owners Split On Raising Minimum Wage." Gallup Poll Briefing (2013): 2. Points of View Reference Center. Web. 22 Mar. 2014. In this article by Andrew Dugan, the results for a recent survey on small business owners are expressed. According to the poll, small business owners are divided on the issue of whether or not the minimum wage is beneficial or harmful to them. These results came from the fourthquarter update of the Wells Fargo/Gallup Small Business Index. These results were based on telephone interviews with up to 605 small-business owners. Approximately 47% approved while 50% disapproved the proposed minimum wage increase. This article did a good job at speaking for the voice of small business employers. Many of these employers felt that an increase in the minimum wage would cause them to either reduce their workforce, reduce worker benefits, or reduce capital spending. They also believe that they would not be able to hire more skilled workers as a result of the increase. The other group of employers felt that it would have little effect on small business employees. However, some outcomes of the increase are not necessarily noticeable for the perspective of employee. This article did an excellent job at using a poll to analyze the voice of small business employers. We often hear too much from the employees and it is always important to hear from the people who are simply trying to make the business survive. Ford, AdamMarlanda. "Point: The Minimum Wage Should Be Raised." Points Of View: Raising The Minimum Wage (2013): 3. Points of View Reference Center. Web. 23 Mar. 2014.

In this article, we are shown the side in favor of raising the minimum wage. This article starts out by giving statistical information on poverty and previous minimum wage levels. The minimum wage was formed in 1938 and started at .25 cents an hour. Since then, it has grown to $7.25 and close to $10/hr in some states. This article seemed to stress that due to the rising cost of living, families cannot live off minimum wage. The author also believes that the main purpose of the minimum wage is to give more purchasing power in anticipation of it stimulating the economy. Overall, this article presents a clear bias in favor of raising the minimum wage. The author presented probably the most common arguments that we hear every day. The article was not as interesting as any of the others; however, it showed the general consensus among supporters of a growing minimum wage. Jacobs, W.E.Hoagland, Steve. "Counterpoint: Minimum Wages Are Unwarranted Economic Interference." Points Of View: Raising The Minimum Wage (2013): 2. Points of View Reference Center. Web. 23 Mar. 2014. This source above is a somewhat brief in its nature yet is especially interesting when looking at the side that opposes raising the minimum wage. Although a slight bias is present in this article, the author presented his facts and used those facts to establish his viewpoints. According to the author(s), minimum wage serves as a floor for wages of many jobs and raising it leads to the raising of wages for many other workers. This is described as an unwarranted interference by the author. The article started by discussing the brief history of minimum wage and then showing how it applies in todays economy. The authors claim that today the United States finds itself out-priced in the global competition to sell manufactured goods. As a result it is argued that raising the minimum wage leaves American companies a tough choice: continue to operate inside the United States, and pay wages well above companies competing for orders, or move factories overseas where labor costs are lower. The author believes that this is threatening Americas continued economic strength. The author believes that the government should not raise everyones wages and a better approach would be to allow low-skilled workers to achieve new skills that would make them more competitive. Again, this article has its own bias but it did an excellent job at introducing a different issue with raising the minimum wage. Lester, Aaron. "Minimum wage milestone: Why Washington State surpassed $9 an hour." Christian Science Monitor 02 Jan. 2012: N.PAG. Points of View Reference Center. Web. 22 Mar. 2014.

In this article by Aaron Lester, Washingtons new minimum wage hike has brought in the discussion of whether or not raising the minimum wage affects us negatively or positively. After reading this article, it is clear that this author is In favor of raising the minimum wage yet is aware of both sides. Washington has recently increased their minimum wage to levels higher than $9.00/hr. This is currently the highest minimum wage across the nation. According to Paul Sonn of the National Employment Law Project, Washington bases its minimum wage on the consumer price indexwhen the cost of living increases, so does the minimum wage there. Based on the information provided in this particular article, approximately 80 % of minimum-wage earners are older than 20 years old. Lester also mentions the opposing view of raising minimum wage: When you raise the price of something, including entry-level labor, youre going to decrease demand for it. This article also claims that there is no evidence of any loss of employment or hours that correspond to minimum wage changes. By incorporating Washingtons minimum wage changes into this article, the article presented information that gave insight in favor of raising the minimum wage. While there was some mild bias in the article, it contains useful information that can be used to evaluate. Mantel, Barbara. "Minimum Wage." CQ Researcher 24 Jan. 2014: 73-96. Web. 24 Mar. 2014. This source provided a wide variety of information. It gave the reader a general background and eventually led to a pros and cons analysis. The pros and cons analysis shows the perspectives of both sides by using to different people to express them. This was very effective in creating a nonbiased study. In the pro side of minimum wage, the man argues that raising the minimum wage creates more spending power that can be used to boost the economy. The opposing side disagrees. Critics of minimum wage believe that as a result of raising the minimum wage, less minimum wage employees will be hired which is not antipoverty nor stimulating the economy. In addition to the pros of raising the minimum wage, the author argues that the raise would not result in large minimum wage loss. To counter that view point, the other side agreed that the minimum wage does not always result in more layoffs but results in less hiring. This source was really effective to me because it presented both sides of the issue without displaying a clear and present bias. It was also beneficial by providing the general overview and background information on the issue. Williams, Steve. "OPINION: Minimum wage hike makes minimum sense." Daily Press (Victorville, CA) 24 Sept. 2013: Points of View Reference Center. Web. 25 Mar. 2014. In this opinion based article by Steve Williams, we are shown some additional arguments made against minimum wage. Williams believes that an increase in the minimum wage results in jobs

being lost. This article particularly talks about Californias proposed increase to minimum wage but still contains facts that could be used when discussing minimum wage on the federal level. According to one study, just a 10% increase in minimum wage would reduce employment for 2.5% of white males in the age group of 16-24. It would reduce employment by 6.5% for blacks. The author stresses that this is extremely harmful considering the jobless rate among these groups is already at a stunning 16.3%. The author argues that simple economics shows that raising the minimum wage is a bad idea. Overall, this paper did an excellent job at introducing Californias law. This example in California can be used to further examine the effects of an increase on a federal level. The article was biased; however, it still managed to present its facts and then present its viewpoint.