David Dodwell, South China Morning Post, 25 February 2015


ecently there has been a call to action to fix the federal minimum wage. It is one of President Obama’s top agenda items and it has the impact to affect millions of Americans who are currently being paid less than the living wage – the wage that can support living in America. While legislation is still in process, several businesses have been taking the initiative and raising their employees’ wages above the current minimum wage. Wal-Mart and Target, some of the biggest low-wage employers in the US, are already moving their company set minimum wage to around $9.00 per hour with intentions to raise it further in successive years. But not all companies are on board with this move towards increased wages. Many businesses argue that an increase in the minimum wage will be an increase in the cost that is passed onto the consumer. They also argue that unemployment will rise as well because companies will lay-off employees to compensate for the labor costs. This concern, along with most other arguments against raising the minimum wage, has been consistently contradicted by countries and states that have adhered to the living wage concept.

Over the past four years in Hong Kong since a minimum wage has been set, unemployment has fallen steadily to 3.3%, despite many predictions for it to jump up to rates as high as 10%. The argument for raising the minimum wage lies in the fact that when a low-wage earner receives an extra $100, they will spend it while a wealthy business executive will probably save that money. Yet consumption spending isn’t the only benefit of a higher minimum wage: higher wages tend to reduce employee turnover and increase employee commitment which lowers company costs. Enhanced wages could also lift many citizens off of government assistance programs, saving millions in taxpayer dollars. With evidence and successful case studies in cities across the world, there is no reason why American workers should not get the raise they deserve.

Get in deeper:

Debate: Related Articles
Three Different Perspectives on the Same Issue. Click on the title to see more
Power and PaychecksSerfs UpListen to Small Business: Don’t Increase the Minimum Wage
There’s no excuse for wage fatalism. We can give American workers a raise if we want to.Paul Krugman, The New York Times, 3 April 2015
Editorial, The Economist, 28 March 2015
Scott Shane, The Entrepreneur, 25 May 2012
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