According to CNN, "76% of Americans are living paycheck to paycheck." In a survey done by online lender CashNetUSA, "22% of the 1,000 people it recently surveyed had less than $100 in savings to cover an emergency, while 46% had less than $800." Could this issue potentially be resolved if the minimum wage were raised? Many people in the workforce across America believe that raising the minimum wage to $15 would allow those living off of minimum wage paychecks to be able to live more comfortably. The other side of the argument believes that minimum wage should stay where it is for a plethora of reasons, many of which revolve around how it would hurt the economy much more than it would benefit from it.

Currently, the federal minimum wage in America is $7.25, but some states vary on what their actual minimum wage is. For example, the current minimum wage in the state of New York is $9.00 and California is $10, but South Carolina is $7.25. While many people attempt to persuade the public that a majority of minimum wage employees are supporting a family with their paychecks, a study done by the Employment Policies Institute shows that "only 20 percent of the workers who would have been directly affected by a proposed 2004 minimum-wage increase were supporting a family on a single, minimum-wage income. The other 80 percent were teenagers or adult children living with their parents, adults living alone, or dual earners in a married couple" (Henderson, "Raising the Minimum Wage Will Not Reduce Poverty"). Although it may seem bad that people are struggling to simply get by off of minimum wage, it is likely that there is something that they could have done/can do about their current situation. Minimum wage needs to stay where it is because it would cause economic repercussions that are caused by drastic changes in the wages of the populace, it would cause younger people to drop out of high school more often to join the workforce, future generations would lose the concept of working hard for something nice, and many companies that employ minimum wage workers would be forced to either close or raise their prices drastically.

The main point that supporters of minimum wage being increased is that they will be able to live more comfortably, and therefore be able to contribute more to the economy because they will have more money to pump back into the system. While this may sound like a good idea at first, if the minimum wage were to be raised to $15, it would cause severe inflation and job loss as well which are both causes of the Great Depression (The Great Depression). Since the US economy is a free labor market, workers have to compete for jobs, and employers compete for workers. With that being said, "wage rates reflect the willingness of workers to work (supply) and the willingness of employers to hire them (demand). Worker productivity is the main determinant of what employers are willing to pay. Most working people are not directly affected by the minimum wage because their productivity and, hence, their pay, is already well above it" (Henderson). If wage rates are increased, then employers will have no choice but to have fewer and more productive employees. For example, there are 20 employees working in a McDonald's at all times with current wage rates. If McDonald's is forced to pay higher wage rates to employees, they will simply shorten their staff and put a higher workload on fewer employees. If the staff complains about how much work they have to do, McDonald's can simply get rid of them and replace them because more people want the job due to the high wage rate. It sounds like raising minimum wage would work, but in the end it causes more damage than it does good. 

In addition to places of work shutting down and millions of people losing their jobs, minimum wage hikes would cause severe inflation which would cause a multitude of economics side effects. Granted it may not be quite as bad the Great Depression of 1929, but it would definitely cause significant economic problems. According to EconomicsHelp, "Inflationary growth tends to be unsustainable leading to a damaging period of boom and bust economic cycles. For example, the UK saw high inflation in the late 1980s, but this economic boom was unsustainable and when the government tried to reduce inflation, it led to the recession of 1990-92" (Pettinger, "Inflation: Advantages and Disadvantages"). So it is understood that inflation causes recessions or depressions, no matter what country or economic state the country is in, but these are just the beginning of the side effects found from inflation. Pettinger goes on to explain that "Inflation tends to discourage investment and long term economic growth. This is because of the uncertainty and confusion that is more likely to occur during periods of high inflation. Low inflation is said to encourage greater stability and encourage firms to take risks and invest" (Pettinger). It is easy to see that there would be a plethora of negative side effects would be the outcome of inflation caused from hikes in minimum wage.

Another side effect of the inflation that would be caused from minimum wage hikes is trade, both internationally and within the US. When a country begins to have high inflation rates, prices of everything begin to go up and the value of the country's currency goes down respectively. So when people go to make any business transaction, the price is automatically going to be higher. So while it may seem like it is a good idea to raise wage rates to help people who desperately need the help, people must realize that in the end, it will bring the prices of everything up, which would significantly hinder trade both locally and internationally. 

This now brings up the topic of replacing employees with machines. If employers have to pay higher wages, then it makes logical sense for them to invest into technology that can do the same jobs that people were doing. In an article published by Business Insider, "Panera CEO Ron Shaich says robots will eventually replace his workers." Shaich goes on to say that "as digital utilization goes up  --  like the sun comes up in the morning  --  it is going to continue to go up. Digital utilization. You are seeing it happen in Panera today." (Peterson, "The 12 Jobs Most at Risk of Being Replaced by Robots"). According to Fortune Magazine, "While telemarketers have a 99% chance of one day being totally replaced by technology (it's already happening), cashiers, tellers and drivers all have over a 97% chance at being automated. Many positions within the "production" category put together by NPR, including packaging and assembly jobs, tend to rank highly as well" (Snyder, "These jobs are most likely to be taken by a computer"). Workers must now ask themselves if they want to keep their current pay or force employers to replace them with robots. 

The change in wages will hurt the poor if they are raised to $15 an hour. Many supporters find it is difficult for a family to get by when the only person who works earns minimum wage. While this may be true, workers have to realize that if employers were to be forced to pay higher wages, they would simply have a smaller staff. At this point, people have to ask themselves, "what is better: a job that pays minimum wage, or no job at all?" What a lot of people don't understand is that companies like McDonald's can't raise wages without running out of business. Each individual McDonald's is owned by a single person or a group of people. Jason Leavitt, the founder of an advisory service for stock-traders writes, "McDonald's Corporation charges its franchisees four percent of sales and an additional fee which could be as much as 8.5 percent. This comes off the top, not after all other expenses are paid. So if McDonald's wages were to double, the franchisees would be responsible for the entire cost, not McDonald's Corporation." (Leavitt, In Defense of the Fast Food Industry). It is impossible for a franchise to survive after paying the wages employees are asking for, and keep the low prices that make McDonald's the money making monster that it is. Leavitt goes on to say, "McDonald's loves the dollar menu, but truth be told, individual franchisees hate it because margins are paper thin. If you double wages, a franchisee literally would lose money every time an item off the dollar menu was purchased." (Leavitt). Thus, bringing up the question of whether or not people would rather settle for the current minimum wage, or have no job at all, because if McDonald's had to pay higher wages, everyone working at the franchise would lose their jobs. 

 Another reason it would hurt the poor is that it would cause more people to become poor. In a survey done in 1997 by the National Bureau of Economic Research, "the federal minimum-wage hike of 1996 and 1997 actually increased the number of poor families by 4.5 percent." Henderson goes on to write about how only 20% of people working minimum wage jobs are trying to support a family, while the other 80% are "teenagers or adult children living with their parents, adults living alone, or dual earners in a married couple." (Henderson). In a report by the US Bureau of Labor Statistics, 1.3 million people earned exactly the federal minimum wage in 2015. According to the United States Census Bureau, on April 10, 2016, the population of the US was at 323,326,545. Thus making the 1.3 million people earning minimum wage make up .40% of the entire US population. Furthermore, it is not a good idea for wage rates to be increased because it would only be affecting .40% of the population, and it would increase the amount of poor people in the US. There will always be poor people, there is nothing that can prevent an entire populace from being poor. The best thing that a country can do is to keep the poverty line as low as possible. 

Another side effect of raising the minimum wage is that it would influence teenagers to immediately join the workforce after high school, or drop out of college. Many young adults are faced with hard work through school, especially those in college, and would find the high wage rates appealing enough to drop out and join the workforce. According to Anna Morris of Wellesley College, "This thesis utilizes three decades of American Community Survey data to perform a quasi-natural experimental analysis that examines the effects of the minimum wage, compulsory schooling laws, and minimum competency testing on teenage schooling decisions. I find that an increase in the minimum wage has little effect on the high school dropout rate, but it encourages some students to enter the labor force after graduating from or completing high school rather than going on to tertiary education." This produces a multitude of different problems as well. Students will begin to drop out and then not have the education needed to progress themselves further in the workforce. Because of this, people will grow up with the belief that college is not necessary and they will pass this down to their children. It is well known that students that graduate college make significantly more money than a student especially since many jobs nowadays require a college degree. Not going to college and immediately joining the workforce might be beneficial at first, but the opportunity to work your way up from minimum wage in a company to be earning a significant amount of money is a difficult task. 

A big reason that the minimum wage is low and should stay there is because if young Americans see the high wages of minimum wage jobs they will stop trying to get an education and will attempt to get a job that pays minimum wage or slightly above it. If that is the case, then the education levels of America's uprising youth will diminish and be lower than it already is in comparison to other first world country. A negative effect that would branch off of this is that generations to come would become accustomed to not going to college and earning a higher education simply because them, as well as their parents, would not find it to be useful. People wouldn't ever find a need to have to go back to earning a higher education until they realize that they were falling behind the other first world countries. Although, it may seem far fetched, it is not an impossible possibility of inflation caused from minimum wage hikes. 

Finally, it is easy to understand that keeping the minimum wage where it is. Yes, it may cause temporary relief to the 20% of people that work minimum wage jobs that are supporting a family off of their check, but Americans have to realize that they would only be helping out .4% of the population and it would only be increasing the poverty line higher than it already is. On top of this, it would run the unemployment rate up very high, cause inflation which has a multitude of side effects, or both. Overall, the immediate thought is a good idea, but in the end raising the minimum wage rates higher than they already are will eventually become more destructive than it will help. 

