Split Decision: Will a higher minimum wage do more harm than good?

Pro: EJ Aguayo

For many first-timers out in the job market, especially young adults, starting at minimum wage may not seem so bad.

The plan is to move up a position or two, savor even the smallest pay raise and to eventually pursue better employment opportunities as that low wage was only supposed to be temporary, just until after college. If you’ve been lucky enough to work in the battlefields of retail, that’s one of the most common rebuttals from anyone who’s been employed with the company longer than a year or two, especially without a promotion.

What we’ve been taught: Once you graduate life is going to be wonderful and peachy. Filled with opportunity and a secure path to financial freedom, the job market is going to love you. Eager employers will look to hire only you because you excelled more than your peers, even when it became nearly impossible at times to stay motivated. Those long hours of studying after class will surely pay off.

However, dating back to grade school, we’ve all been lied to.

The reality is that many students become just as stuck in low-waged jobs as other, older, blue-collar workers with less-decorated resumes.

Nearly 260,000 people with a college or professional degree are working minimum wage jobs, according to a 2013 study by the Bureau of Labor Statistics.

They’re forced to accept low pay with long hours bundled with limited growth opportunities within the company, all while still having to feed themselves and their families.

Many have argued that minimum wage is a high school student wage, and that it was never intended be a liveable one. Nonetheless, times have changed.

“89 percent of those who would benefit from a federal minimum wage increase to $12 per hour are age 20 or older, and 56 percent are women,” according to the Department of Labor.

Even if job availability comes to a halt, life will not.

Sacramento is filled with small businesses along with its fair share of larger establishments. And, contrary to popular belief, many small business owners from across the U.S. are in favor of a minimum wage increase because it will give employees a necessary boost while stimulating the economy.

“Small businesses support increasing the minimum wage because it would immediately put more money in the pocket of low-wage workers who will then spend the money on things like housing, food, and gas,” according to a recent survey of 799 small businesses from across the country, by Small Business Majority.

To higher waged workers, a dollar or two per hour more may not mean much, and to them I say, what wonderful luck you’ve had.

If you’re not from an area with wide access to professional jobs and overwhelming amounts of now hiring signs like those seen on storefronts in many affluent neighborhoods, there are still greater days ahead.

As of January 1 of this year, California’s minimum wage increased from last years $9.00 to $10.00 per hour, and it will continue to increase one more dollar per year until 2020, reaching $15.00 per hour, according to the White House.

Within the last year alone, Sacramento has also seen an increase in employment growth with total jobs in the region increasing by nearly 22,900, according to the State of California.

As the farm-to-fork capital, a hub for even the most seasoned artists and a forecast into a brighter future in entertainment with the new King’s stadium downtown, a minimum wage increase adds to a list of already wonderful things to look forward to in our area.

Con: Ashley Navarro

Although the benefits of raising the minimum wage may seem appealing, the economic consequences far outweigh the immediate satisfaction of a nice pay raise.

As the cost of living becomes harder to fulfill for lower to middle class families, raising minimum wage will only make things worse.

Yes, raising minimum wage may move many low-wage workers out of poverty, but some of these jobs, “would probably be eliminated and the income of those workers would fall substantially,” according to a 2014 Congressional Budget Office report.

The trade-off: Higher wages, but the odds are much slimmer that you could actually find a job to begin with.

Employers could look for employees who seem more qualified with skills just to get an average job. This would be pushing younger and inexperienced people, such as students, out of reach for job opportunities.

Some restaurants and businesses may have to decrease in size, citing the increase of minimum wage as a main contributor.

The mentality with most minimum wage supporters is that the wage needs to reflect the cost of living, but no one is seeing the bigger picture.

With businesses in mind, this will mean having to increase prices of their products and services. Especially within smaller establishments, where is the money to pay employees higher wages going to come from?

Owner of the local favorite of many Sacramento food enthusiasts, Chando’s Tacos, Lisandro “Chando” Madrigal announced to customers that for his three restaurants, “prices would increase by an average of 7 percent, largely due to the higher minimum wage,” according to a recent Sacramento Bee article.

Even larger establishments have had to hike prices to compensate for higher employee costs.

In an equity report on Chipotle Mexican Grill by William Blair, a global investment banking and wealth management firm, prices of beef, barbacoa and steak options have increased by 4 to 6 percent in most markets.

San Francisco was hit the worst where prices increased, “10% on chicken, carnitas (pork), sofritas (tofu), and vegetarian entrees along with a 14% increase on steak and barbacoa,” according to the report.

Employees may love the sound of higher wages, but for that to happen companies must make up expenses. This will create a never ending circle of constant price increases.

Although an increase in wage will greatly help people in more affluent cities and others alike since living expenses are already high, small cities or those with poor economies will potentially suffer as they try to stay afloat following wage increases.

If the point is to stimulate the economy, why target those with lower income?

Many believe it will help the poor, however the issue isn’t how much they are being paid but rather how much they are working and not working.

In order to have the amount of those living in poverty decrease, the amount of jobs available needs to increase. If the amount of jobs increases then money could potentially be circulated to stimulate the economy, but that’s not being addressed.

The raise in minimum wage is going to hurt those who it’s supposed to be helping, low wage workers.

With higher product prices and less jobs, we need to prepare for the worst.