Minimum Wage Debate

Oscar Zuluaga

Florida International University

Labor and Globalization

Professor Sherman Henry

06/06/2021
Introduced in 1938, following the Great Depression, the federal minimum wage is a tool

designed to take care of American workers and protect them from abuse by their employers.

Initially, it was set at $0.25 per hour and has been revised by the congress 22 times. The last

revision came in 2009 raising the amount from $6.55 to $7.25 per hour. However, 29 states have

initiate reforms to set the minimum wage above the federal one (Sabia, & Burkhauser, 2010.

Although the federal minimum wage has stalled in several states, some local governments have

raised it to $15 / hour such as Seattle. Florida is one of the states with a low minimum wage and

currently it is fixed at $8.46 per hour and there is a push to have it at $15 per hour. With such

low rates, many workers across the country feel that the wage is not able to sustain them and it is

slowly pushing them to poverty.

The proponents of raising a minimum wage argue that the current rate of $7.25 is too low and it

is hard to live by. Raising the minimum wage is an integral factor that can help raise jobs and

grow the economy. The diminishing value of the minimum wage has been seen as the reason for

the increasing wage inequality for low and middle-income workers (Kaufman, 2010). With

increased wages, the people would be able to save and these savings could be used for

undertaking business-related ventures and therefore grow the American economy.

Secondly increasing the minimum wage would improve the living standards of the people. The

workers would be able to meet their monthly expenses with ease such as paying car debts, rents,

and other family expenses. Today American low-wage earners are impoverished and live below

the federal poverty level. Similarly raising the minimum wage would improve the morale of the

employees. A motivated employee is an ideal asset for any business and not only does it lead to

higher productivity, but it also results in higher customer satisfaction (Kim, & Jang, 2019).
Finally, most of the low-wage earners are people of color, and raising the figures could help

bridge the racial gap which is prevalent in American society.

First, the opponents of raising the minimum wage argue that many businesses would not be able

to cater to the growing expenses in salaries and wages. Many argue that such as case would force

the companies to close off or even lay off the workers. Similarly, this has been tied up with

issues that the move would raise the cost of living and eventually lead to inflation which would

be catastrophic. They argue that the negative impacts of raising the minimum wages are far much

higher and could be costly to the economy (Clemens, & Wither, 2019). Secondly, they also

maintain that this move could also affect the low-skilled workers who do not have the required

experience and could soon find themselves without work. They also argue that the concept of

raising the federal wage does not incorporate the regional cost of living which varies from state

to state. Without this consideration, it could be painful for low-income communities in the U.S.

Finally, we can conclude that both, the proponents of raising the minimum wage to $15.00, and

the proponents of not raising the minimum wage, have valid arguments that try to favor their

own position, ignoring the other side of the coin. After analyzing both arguments, I can say that

the benefits that raising the minimum wage would bring into the lives of low wage workers

outweigh the negative outcomes that this would bring into the lives of business owners that do

not want the minimum wages to be raised. Raising the minimum wage will not only improve the

lifestyle conditions of many Americans, but will also help the American economy to grow, and

thus, will help to shorten the different existing social gaps between low wage workers and the

rest of American society.

 References

Clemens, J., & Wither, M. (2019). The minimum wage and the Great Recession: Evidence of

effects on the employment and income trajectories of low-skilled workers. Journal of

Public Economics, 170, 53-67.

Kaufman, B. E. (2010). Institutional economics and the minimum wage: broadening the

theoretical and policy debate. ILR Review, 63(3), 427-453.

Kim, H. S., & Jang, S. S. (2019). Minimum wage increase and firm productivity: Evidence from

the restaurant industry. Tourism Management, 71, 378-388.

Sabia, J. J., & Burkhauser, R. V. (2010). Minimum wages and poverty: will a $9.50 Federal

minimum wage really help the working poor?. Southern Economic Journal, 76(3), 592-

623.
1. Many campus and advocacy groups are currently involved in struggles for a
"living wage." How do you think a living wage should be calculated?

I think that in order to calculate a living wage, the components of what a human needs to live a
normal life should be taken into account. A living wage should be calculated having into account
the cost of the minimum rent price, plus utilities, food and health insurance. Also, I think that a
living wage should also consider the fact that emergencies may arise in the lives of people, so it
would be coherent for a living wage to be a little bit higher than the actual average expenses of
a low-wage worker, in order to allow them to live a more comfortable life.

2. Were you surprised by the casual reactions of Ehrenreich's coworkers when she
revealed herself as an undercover writer? Were you surprised that she wasn't
suspected of being "different" or out-of-place despite her graduate-level education
and usually comfortable lifestyle?

I was not surprised by the casual reactions of Ehrenreich’s coworkers, I think that anyone can
be working a low wage job. From my experience, I’ve witnessed how people of middle and
almost high social classes have also been working low wage jobs together with me in places in
which I have worked before. We live in a money-driven society in which almost everyone would
accept to work in a low wage job in order to have an extra income, or to cover different
expenses that arise depending on the life situations that everyone has.

3. Many of Ehrenreich's colleagues relied heavily on family—for housing and help

with child-care, by sharing appliances and dividing up the cooking, shopping, and
cleaning. Do you think Americans make excessive demands on the family unit rather
than calling for the government to help those in need?

I think that Americans make fair demands on the government regarding income, but at the same
time, I think that whoever wants to succeed in the United States and live a comfortable live can
do it. The United States is a country that offers a stable enough economy, and all the tools that
an average person needs in order to reach a stable economic position. From my perspective, I
can say that in America whoever lives in very difficult economic circumstances is because very
poor choices have been made. As a low wage worker in an expensive city, I’ve been able to
create budgets based on the income I have, and I find myself able to pay for all my expenses
and needs, as well as different entertainment expenses, gas, and still, I’m able to save some
money. Furthermore, it’s important to say that I have no childs and no financial responsibilities
or unnecessary expenses due to the fact that I’ve made the right decisions through my life,
allowing me to spend my income solely on myself and life a comfortable life.

4. Nickel and Dimed takes place in 1998-2000, a time of unprecedented prosperity in

America. Do you think Ehrenreich's experience would be different in today's
economy? How so?
I think that Ehrenreich’s experience would be very similar in today’s economy. No matter what
are the conditions of the society in which we live, there will always be those who struggle, such
as those who have more financial responsibilities making it harder for them to survive under a
low wage job, and also those that have made poor life and financial decisions through their
lives, creating negative circumstances for themselves and their lifestyle.

5. After reading Nickel and Dimed, do you think that having a job—any job—is better
than no job at all? Did this book make you feel angry? Better informed? Relieved that
someone has finally described your experience? Galvanized to do something.

I think that having a job is better than not having a job. From my perspective, not having a job
while being in poor life circumstances is giving up on life, and taking the decision to live the
most mediocre life journey possible. Although it’s hard to achieve a very good and stable
financial position that allows one to live a comfortable life, at the same time is beneficial for
society that as human beings we are part of a system that encourages everyone to work more
and to be better and more productive in order to get paid more. I think there is nothing wrong
with the fact that in order to be able to live comfortable we need to work hard and make the right
decisions through our lives, and I’m a fair believer in the fact that nothing worth having comes
easy.