Minimum Wage: Is There a Golden Number

For over a century now, the economy of the United States has been an issue of constant debate. Even when it is at its strongest, it remains a very controversial topic. There are a number of factors, large and small, that all contribute to the disagreement on America’s economy, but my research group has specifically chosen to examine wages and employment. My topic, the minimum wage has a very volatile effect on the value of labor which will undoubtedly change when artificial intelligence becomes a predominant part of the workforce. It can be argued that artificial intelligence decreases the value of some minimum wage jobs; artificial intelligence will displace jobs that currently exist and the minimum wage will likely have to be adjusted as a result. The minimum wage has less of a bearing on the gender pay-gap than it does on other issues. My project will be examining how the minimum wage affects a worker’s quality of life, unemployment, and the economy as a whole. I will be researching how much the minimum wage needs to change if it even needs to change at all, and what that will mean for workers. Although the federal minimum wage is currently below the poverty line, evidence suggests that larger increases in the minimum wage have negative effects on worker health and unemployment all while raising the poverty line itself. While increases in the minimum wage can benefit workers, larger minimum wage hikes adversely affect their well being and economic status. In the best interest of the workers, any changes to the minimum must be kept small and made with caution. Recent evidence fromSeattle’s minimum wage hike to thirteen dollars per hour actually suggests that increases in the hourly wage of workers correlated with a lower number of weekly hours worked. This culminated in a $125 average decrease in workers monthly earnings. Worst of all, if workers saw a decrease in monthly earnings upon a minimum wage increase to thirteen dollars, it is difficult to contemplate what might happen if the minimum wage is increased to fifteen dollars like so many have proposed (The Times Editorial Board). Similarly, when the price of labor drastically increases, employers are likely to fire existing workers or hold off on hiring new workers to compensate for the increased costs (Romich). By the same logic, if corporations are spending more on employment, they may be inclined to raise the price of goods in order to raise revenue. In theory, this can expedite inflation and even work to raise the poverty line over time. On the other hand, there is a lack of evidence to oppose more minute increases in the minimum wage. Economist, Evan Totty has found that smaller, ten to fifteen percent increases in the minimum wage have not had any significant effect on employment rates of minimum wage workers over the past thirty years. However, increasing the minimum wage to fifteen dollars per hour would mark a 107% increase from its current value of $7.25 per hour. Even if employment has been stable for thirty years with the minimum wage changing ten to fifteen percent each time it is adjusted, there is no guarantee that doubling the current minimum wage will not affect employment (Totty). This goes hand in hand with Romich’s findings; if the price of labor doubles, employers are paying twice as much for work. Additionally, researchers have determined that increasingly large minimum wage hikes have increasingly adverse effects on both the mental and physical health of workers. Increasing the minimum wage by only ten percent has had relatively small effects on worker health with a “3.74% increase in the probability of reporting fair or poor health among men and a 1.97% increase in the probability of reporting this outcome among women” (Horn). However, “an increase to $15 per hour (a 107% increase) is associated with a 28.56% increase in the likelihood of reporting fair or poor health” (Horn).

Overall, it seems that ambitious minimum wage bumps have more disadvantages than they do advantages. That is not to say that there is no merit to smaller increases in the minimum wage. In fact, there are no real disadvantages of a ten to fifteen percent increase in the minimum wage. Smaller adjustments to the minimum wage can help adjust the minimum wage for inflation while also helping workers rise above the poverty line. This matters because every United States citizen is subject to receiving fundamental human rights. The current minimum wage of $7.25 per hour is too low for workers to meet their basic needs, but increasing that to fifteen dollars per hour has a serious backlash and will prove to be just as bad for workers. There is an optimal number for the minimum wage. It is only a matter of increasing the minimum wage in in