Raising minimum wage is a controversial topic that has been in and out of the news for the past year since the introduction of the Fair Minimum Wage Act. The act, if passed, would raise the federal minimum wage from $7.25 to $10.10.
According to the White House’s findings, an increase of the minimum wage to $10.10 would benefit approximately 28 million Americans of which only 12 percent would be under the age of 20, those usually stereotyped as making up the majority of minimum-wage employees.
Opponents of the Fair Minimum Wage Act argue that raising the minimum wage would cause the loss of jobs due to companies being unable to support higher paid employees, between 500,000 and one million according to the Congressional Budget Office’s report, and that the money will not reach those in poverty-those who need the pay raise most.
Despite disputing numbers on both sides of the debate, one can agree that raising minimum wage will have widespread effects, not just on those making minimum wage or less.
David Eaton, chair of the department of economics, said the effects of raising the minimum wage, either positive or negative, will be a multitude of small impacts.
“In most situations like this, the doom-and-gloom that most people won’t be able to find a job is overrated and so is saying if we raise the minimum wage these people will have extra money and be the engine for growth,” Eaton said. “The tinkering is going to be around the margins.”
Of these impacts he said the largest and most apparent will be in business’ ability and desire to hire more employees, especially college-age students and younger who will come into the work force with less experience than their competition.
Eaton said the key to understanding the economic impact of raising the minimum wage is that every dollar that goes into somebody’s pocket has to come out of somebody else’s. Someone has to bear the cost of the approximate $3 raise, he said, be that the consumers, the input suppliers or the sellers of the product.
Currently, 19 states already have a mandated minimum wage above the federal minimum, Minnesota became the newest state to raise its minimum wage Monday from $6.15 an hour to $9.50 over the course of the next two years.
In Kentucky, approximately 500,000 are currently being paid the federal minimum wage.
Justin Parish, freshman from Murray, said he is in support of raising the minimum wage.
He said if the minimum wage was raised it would increase the quality of life for the employees the ones who actually make up and run the company.
Parish said employees who work for bigger companies, not small start-ups and mom-and-pop companies, should have to pay their workers a higher minimum wage than these smaller businesses depending on their net income.
“Right now, with the current minimum wage, there’s not really enough money to live on, to get a decent house and to raise a family in,” Parish said. “If the bigger parent companies trickle down more money, if they did that and made just a little bit less money, the quality of living will be better in America.”
Story by Ben Manhanke, Staff writer