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Cameron Earl

Eng 1101

Professor Leonard

25 March 2021

How Would Raising the Minimum Wage to $15 Affect the United States and Its People?

Over the past few centuries, the United States has been expanded and developed upon

one main common interest: money. Now, more than ever, there is a desire in the U.S. to obtain

the most money possible by doing the least amount of work. People from all income

backgrounds across the nation are getting themselves involved in the stock market, working

delivery jobs such as Doordash and Grubhub, and so on. A new question has now arisen in our

country with this mindset being present: should the minimum wage be raised to $15 an hour?

Our new president Joe Biden thinks so, along with many other people in the United States who

believe they deserve $15 an hour as their minimum wage. The truth is, many of the people that

fall into this category need to look into the long and short-term effects of enacting something as

major as this. They see this proposal as one thing and one thing only: more money for them.

Putting something in place such as this would have many unintended consequences,

consequences that many people of lower education don’t understand, or just inherently ignore.

Coming out of a global pandemic, minimum wage jobs have been hard to come by. Small

businesses have been hurting. People have been seeing pay decreases across the nation. To think

that requiring all companies to pay their employees $15 per hour or more would be a good idea is

slightly far-fetched. At the end of the day, our country’s minimum wage system has been
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working for decades. Why change it? The U.S. minimum wage shouldn't be raised to $15

because it would cut down on too many jobs, be detrimental to the economy, and raise the cost of

living everywhere.

Over the years, the national minimum wage has grown exponentially as the economy has

grown and inflation has gone up. In 1938, the Fair Labor Standards Act was put into effect. This

was the original law that required a minimum wage for anyone working in the United States,

along with a requirement of time and a half for anyone working over 40 hours a week. The law

also prohibited minors from being worked too much. Since 1938, the minimum wage has been

raised an additional twenty-seven times, with the most recent time being in 2009 (History of

Federal Minimum Wage Rates 2). The current minimum wage is $7.25. With this being said, it

appears that it is time for the minimum wage to be raised. We are just getting over a pandemic as

a country, and currently, people that typically work minimum wage jobs are making more

reaping the benefits of government subsidies and welfare than going back to work. However, we

have to keep in mind that the minimum wage has been raised gradually for 83 years for a reason.

Raising it by 206% within only a few years would be catastrophic.

Implementing a $15 an hour minimum wage would end up creating a loss of many

American jobs. If the minimum wage was raised, a few things would happen. First and foremost,

small business owners would have to make cuts because they can’t afford to add that kind of

money to their already low budgets. With these cuts, we would see a less put-together business

which means fewer customers, meaning this raise would essentially be responsible for wiping

out many small businesses. In How a Minimum Wage Increase is Being Felt in a Low-Wage

City, Sydney Ember discusses the long-term effects of enacting such a high minimum wage.

According to Ember, a study was conducted by the Congressional Budget Office saying that if
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the minimum wage were raised to $15 by 2025 employment of Americans would decrease by 1.4

million (3). After seeing these statistics we have to truly ask ourselves as a country: is this best

for us?

Something big that advocates for the minimum wage raise fail to understand is that the

companies that aren’t affected as much by the wage increases will still make big changes. Huge

companies such as Amazon and Mcdonalds operate on the basis of finding the most simple,

uncostly, and efficient way to do things. With this being said, these big corporations are not

going to keep minimum wage workers around for $15 if they can replace the workers with

technology that will cost less in the long run and be more efficient. In The Unintended

Consequences of Raising Minimum Wage to $15, Jack Kelly discusses this, saying that It would

be way easier, cheaper, and efficient to let technology take over operations. What advocates of

the wage raise aren’t seeing is that this implementation would hurt the people it’s supposed to

help (3). Amazon has already opened stores that eliminate the need for cashiers. Mcdonalds and

Taco Bell have put kiosks in their stores to do the same. Companies aren’t afraid of evolving. If

it costs them more to be less efficient, they will immediately result in the method that costs less

and makes them more.

A popular occurrence our country is seeing is our big companies moving their production

to other countries to further decrease their overhead costs and to increase their efficiency. Just in

this past decade, two very notable ones have done it, Ford and Nabisco. Nabisco moved their

production to Mexico in 2015, and Ford recently announced they will be moving their

production from their Avon Lake plant to a new one in Mexico. Considering that companies are

currently trying to move production to other countries for cheaper labor costs, if a 206% raise in

the minimum wage is implemented in our country, we would see a huge raise in countries that
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want to leave, which would not only take even more Americans out of work but also hurt our

economy very badly. Once again, at the end of the day, a business is a business, and they will do

whatever is most efficient and cheap for them as a company, rather than catering to those

wanting higher wages for doing the easiest and least skilled work in the job industry.

Raising the minimum wage to $15 would be very detrimental to the American economy.

All of the direct consequences of raising the minimum wage would indirectly hurt the economy

very badly and potentially put us into a recession. There are many side effects to implementing a

206% raise that many of the people rooting for it don’t understand. Small businesses would go

out of business. Large corporations within America would replace human jobs with automated

technology ones. Production facilities in the United States would move overseas to find cheaper

labor. All these things add up and would tear the American economy apart. In The Unintended

Consequences, Jack Kelly discusses how the people that should be helped by the raise, would be

the ones hurt in the long run. He discusses how in an ideal world, raising the minimum wage

would be very nice and kind, but many of the arguments involved here are on the basis of

emotion and those advocating for the passing of this legislation are neglecting the consequences

to the economy that will hurt the same people it’s trying to help (5). At the end of the day, raising

the minimum wage is supposed to try and raise those in the lower class out of poverty. However,

if these people get let go from their job and new jobs in this sector are hard to come by, they

would end up being a lot worse off than the place in which they started.

Another consequence of raising the minimum wage would be a higher cost of living just

about everywhere. The only exception would be the state of California, which already has a $15

minimum wage. California has been a good example however of what will happen if we put this

raise in minimum wage into play. Not all of the high costs in California have to do with the
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minimum wage. However, things like gas prices and food prices at restaurants and grocery stores

are directly correlated. In California, gas is currently just under $4, whereas it is just under $3 a

gallon in many other states. Prices at fast-food restaurants such as Chipotle, Mcdonalds, and

Chic-Fil-A are higher in California due to workers having to be paid more. In states that don’t

already have a higher cost of living, the wage increase would be felt on a lot larger scale. In

places like Texas and Wyoming, a system is in place that works. Prices of homes are low, prices

of food are low, and many fast-food workers are making either minimum wage or a little above

it. Requiring these states to pay their workers a 206% raise with an already low cost of living

would cause complete chaos within these states and their communities. Their gas would go up,

their houses would cost more, and quite frankly, their money just wouldn’t go as far.

Another big thing we would face as a country if the minimum wage was raised is

inflation. The minimum wage is one of the primary factors of inflation. Slow, gradual inflation is

good for a country, however, a quick spike in inflation can have more of a negative effect,

especially in states that have a lower cost of living. In the CNBC article How Raising Minimum

Wage to $15 Per Hour Could Affect Workers and Small Businesses, Megan Leonhardt includes a

statement from a Texas senator regarding the minimum wage proposal amid the Covid-19

pandemic saying that trying to implement a federal, nationwide minimum wage mandate of $15

at this point in time will put us right back to where we were at the beginning of the pandemic just

under a year ago — A heavy loss of American jobs, Small businesses forced to close and

people’s life savings gone. Nothing would be more devastating to small businesses right now

who are just barely starting to get back on their feet (4). Not only would the minimum wage

increase have a large effect on single adults, the economy, inflation, etc, but it would also have a

big effect on families. Middle-class families would be faced with no increase in their pay and be
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forced to pay thousands of dollars more a year on child care. Currently, the average childcare

worker is being paid $11.65 an hour, meaning if they were to be paid $15 an hour, parents have

to directly pay that difference almost every day (Leonhardt 4). In the article How Raising

Minimum Wage, Megan Leonhardt discusses this. She talks about how even though the proposed

increase in minimum wage could potentially let lower income people live more comfortably, it

would also raise the cost of childcare in the U.S. on average by 21%. The study says that it

would add an additional expense of almost $4,000 for a family with two children. This is due to

the increased labor costs required to pay the people taking care of the children. (3).

Not only are there many issues regarding money that would be seen in putting a $15

minimum wage into place, but there would also be other social and political issues that would

follow. There is already a lot of tension between the Democratic and Republican parties, and in

putting this into place, even more would arise. Not to mention, we are just finally starting to get

ourselves back on our feet after going through one of the hardest times Americans have seen

since World War II: the Covid-19 pandemic. In the BBC News article How the Pandemic Has

Changed the World Economy, Lora Jones discusses the impact coronavirus has had on the

economies of not only the United States but the world’s. She explains that the spread of the

coronavirus have left countries across the nation spending more money to best prevent the spread

of the virus, money that isn’t available in such an unsteady economy. Although vaccines are

starting to roll out, people are still wondering if the world will ever go back to normal(2). With

so much economic fluctuation in the past 2 years, is it a great idea to start trying to enact a $15

minimum wage right now? The United States has seen thousands lose their jobs, thousands of

companies go under, and people’s lives crumble. We’re just pulling ourselves out of this tragedy.
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Starting something like this at a time such as now would be a huge mistake. Below is a graph

displaying the fluctuation the economy has seen since the beginning of the outbreak:
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Given that there are a plethora of reasons not to enact a $15 national minimum wage right

now, there are also many arguments on the opposing side. One aspect, in particular, is the calling

for minimum wage raises on those working at jobs that receive tips. The current minimum wage

for tipped workers is $2.13. This fixed amount hasn’t changed in the thirty years, with the last

time being raised having been in 1991. In 1991, a dollar was equivalent to $1.95 in today’s

money which is almost double the amount. Many will argue that the minimum wage should be

raised to match inflation, which to an extent, is true. The tipped worker minimum wage is past

due to be raised. I conducted an interview with London Eberly, a college student and tipped

worker at a restaurant in Dayton, Ohio regarding her pay and her feelings about raising the

minimum wage for tipped workers. She currently is getting paid $4.00 an hour which is above

the minimum wage for tipped workers, however, she doesn’t believe it’s enough. I asked her why

she believed she should make more and she answered as follows: “I think I should at least be

getting paid the wage of a regular minimum wage Ohio job. $8.55 is sustainable with tips,

whereas $4.00 is not. Therefore, the minimum wage should be raised to ensure benefits for

waitresses and other minimum wage workers in general.” Many people in Ohio and the United

States, in general, have a similar opinion. Many people make the argument that although

customers are supposed to give a 20% tip, it doesn’t always happen, and even if it does, the tips

and the low hourly wage still don’t properly compensate them for the work and time they put

into their job.

Another argument people will say regarding a $15 minimum wage is that the rise in

spending won’t have the consequences people might think, and will in reality help small

businesses assuming they raise their prices and see a higher revenue income. In How Raising

Minimum Wage, Megan Leonhardt discusses this saying that the people in support of the
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minimum wage increase believe that it could help both the people with lower incomes, and small

businesses through an increase in customer spending, lower turnover rate, and an increase in

employee productivity and therefore more customer satisfaction(3). Although this is a possibility,

there is also most certainly a possibility that this doesn’t work out the way the opposing side of

this issue might like for it to. Consumers could decide for themselves that the upped prices aren’t

worth it, which would lead the restaurant with 2 options: lower prices and lower revenue, or let

people go and diminish their efficiency.

Another primary argument that people could make in this situation is that as inflation

increases, the minimum wage should increase too. Which, to an extent, is true. Inflation has

continued to go up, yet the minimum wage hasn’t changed in 12 years, and the tipped minimum

wage hasn’t changed in thirty. In the CNBC article, This Map Shows Where in the U.S. a $15

Minimum Wage Would be Most Impactful, Megan Leonhardt discusses this. She discusses how

the advocates of the minimum wage increase find it necessary due to inflation and money

gradually being worth less and less. A study conducted by the National Employment Law Project

found that by 2024, a person will need to make $15 and almost $32,000 a year to live adequately

in the United States. The required minimum wage has already been raised to $15 an hour in

California and New York(4). The following graph from CNBC shows percentages by state in

which people would be affected by this proposed increase. California is the only state with no

data since they already have it in place.

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The thing this map fails to address is the negative impact a rise in the minimum wage would

have on those in the middle class and those working jobs other than minimum wage ones. When

it comes down to it, there would be people impacted positively by the minimum wage raise, but

would also be a great percentage of Americans affected negatively.

With all this being said, several conclusions should be taken from this essay. The U.S.

minimum wage shouldn't be raised to $15 because it would cut down on too many jobs, be

detrimental to the economy, and raise the cost of living everywhere. However, it is still most

definitely apparent that the minimum wage needs to be increased. The current minimum wage

hasn’t been increased since 2009. Another conclusion that should be made is that the tipped

worker minimum wage should most definitely be raised again as well considering inflation has

almost halved the worth of a dollar since the last time it was increased in 1991. Wages need to be
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increased. However, requiring a uniform minimum wage of $15 across the board regardless of

the cost of living is not the way to do it. That would cause more harm than good. At the end of

the day, I believe that the solution to this minimum wage problem is right in between the

extremes on both sides. The minimum wage should be raised, but not to $15. We are Americans

and I believe if we come together to make a change the people will respect, we can come up with

a compromise that everyone will be okay with.

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Works Cited and Consulted

Clark, Bill. The Costs and Benefits of a $15 Federal Minimum Wage. 2 Mar. 2021,

www.wsj.com/video/the-costs-and-benefits-of-a-15-federal-minimum-wage/704B3CF0-

DEEB-4ACC-9FE2-3C743932FD47.html. Accessed 4 Mar. 2021.

Eberly, London. Personal interview. 26 March 2021.

Ember, Sydney. “How a Minimum-Wage Increase Is Being Felt in a Low-Wage City.” The New

York Times, 14 Feb. 2021,

www.nytimes.com/2021/02/14/business/economy/minimum-wage-fresno-californi.html.

Accessed 4 Mar. 2021.

Grossman, Jonathon. “Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum

Wage.” U.S. Department of Labor Seal, 2020,

www.dol.gov/general/aboutdol/history/flsa1938.

Hsu, Andrea, et al. Senate Says No to $15 Minimum Wage for Now, But DEMOCRATS Vow to

Push On. 5 Feb. 2021,

www.npr.org/2021/02/05/964020654/senate-says-no-to-15-minimum-wage-for-now-but-

democrats-vow-to-push-on.

Jones, Lora. “Coronavirus: How the Pandemic Has Changed the World Economy.” BBC News,

BBC, 24 Jan. 2021, www.bbc.com/news/business-51706225.

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Kelly, Jack. “The Unintended Consequences Of Raising Minimum Wage To $15.” Forbes,

Forbes Magazine, 10 July 2019,

www.forbes.com/sites/jackkelly/2019/07/10/the-unintended-consequences-of-the-15-mini

mum-wage/?sh=511c19a1e4a7.

Leonhardt, M. (2021, February 01). This map shows where in the U.S. a $15 minimum wage

would be the most impactful. Retrieved March 04, 2021, from

https://www.cnbc.com/2021/02/01/map-shows-where-in-the-us-15-dollar-minimum-wage

-would-have-biggest-impact.html

Leonhardt, Megan. “How Raising Minimum Wage to $15 per Hour Could Affect Workers and

Small Businesses.” CNBC, CNBC, 25 Feb. 2021,

www.cnbc.com/2021/02/24/minimum-wage-15-dollars-per-hour-brings-benefits-consequ

ences.html.

Morath, E. (2021, February 03). Biden wants a $15 minimum WAGE. Here's what people say it

would do to the economy. Retrieved March 04, 2021, from

https://www.wsj.com/articles/biden-wants-a-15-minimum-wage-heres-what-people-say-it

-would-do-to-the-economy-11612348201

Neumark, David, and William L. Wascher. Minimum Wages. [Electronic Resource]. MIT Press,

2008. EBSCOhost,

search.ebscohost.com/login.aspx?direct=true&db=cat01128a&AN=scc.b1523766&site=e

ds-live.
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Rogers, Kate. “Seattle Passed a $15 Minimum Wage Law in 2014. Here's How It's Turned out so

Far.” CNBC, CNBC, 2 Jan. 2020,

www.cnbc.com/2020/01/02/seattle-passed-a-15-minimum-wage-law-in-2014-heres-how-i

ts-turned-out-so-far.html.

U.S. Department of Labor. “History of Federal Minimum Wage Rates Under the Fair Labor

Standards Act, 1938 - 2009.” U.S. Department of Labor Seal, 2011,

www.dol.gov/agencies/whd/minimum-wage/history/chart.