 If someone were to ask a group of people if they would rather make more money for their job, most people would say yes. It seems like the perfect deal: doing the same amount of work for more money. It would allow for more peace of mind and an overall better living situation. In an ideal world, paying everyone more would be a great solution. This is the argument for raising the minimum wage to $15 an hour, and on the surface, it seems like a good one. Unfortunately, this is not an ideal world. For the past couple of years, there has been a push from citizens and politicians to raise the U.S. minimum wage to a nationwide $15 an hour. Many people believe that this can be achieved with few to no consequences. In reality, this bump to a $15 minimum wage will do more harm than good. The state of California has already passed a law stating that the minimum wage will be $15 an hour before 2020, and many states are soon to follow (Morath 2016). After signing the new minimum wage law, the Governor of California, Governor Jerry Brown, said “Economically, minimum wages may not make sense. But morally, socially and politically, they make every sense because it binds the community together to make sure parents can take care of their kids.” (Goldberg 2016). The people endorsing the $15 minimum wage are so concerned with an increase in money, that they do not consider the economic consequences of such a high minimum wage. Many economists argue against the statewide raising of the minimum wage because it will not only hurt the economy, but be detrimental to the people it’s trying to help by negatively affecting businesses, resulting in business closures, unemployment and increased poverty.  

The “Fight for 15” is the name the group has adopted for people who believe that the minimum wage should be $15 dollars an hour. The Fight for $15 began in 2012 when two hundred fast-food workers walked off the job to demand $15 an hour and union rights in New York City. It has since grown into a movement in over 300 cities (Fight for $15). These people believe that the federal minimum wage is too low for anyone to live on and support a family with, and that a higher minimum wage will cause more growth in the economy. They argue that an increase to $15 will help the poor and lift people out of poverty (Quigley 2016). As of 2017, Seattle and Los Angeles have fully implemented the $15 minimum wage hike, while San Francisco and New York City plans to be on board by 2018, the rest of New York by mid-2021, and the District of Columbia and state of California by 2020 (Socawlege, 2015). The argument from these states is that their citizens cannot make a decent living on $9 an hour, which in some ways is true. Raising the minimum wage however will not help these poor people. Cities like San Francisco and New York City have very high taxes which are proven to hurt the poor and low-income Americans (Socawlege, 2015). San Francisco's Office of Economic Analysis said that an increase to $15 would reduce the city's employment by about "15,270 private sector jobs." (Procon, 2017). This statistic will become the reality in San Francisco once the minimum wage increases to $15 in 2018. This raise to $15 in these cities will result in higher prices and failing business, causing an increase in poverty and more unemployment in these cities.

A nationwide increase to $15 would also disproportionally harm the poorest areas in the United States. Mississippi has the lowest cost of living in the United States at 83.5% of the national average, while Hawaii had the highest at 168.6% (Procon, 2017).  If both states had an increase in minimum wage to $15, it would have a greater effect on Mississippi. Lower cost of living states like Mississippi need to spend proportionally more to pay their minimum wage employees than employers in higher cost areas like Hawaii. This would cause many people to lose their jobs because businesses wouldn’t be able to afford the higher wages, causing them to raise prices and fire employees. These increases in prices aren’t affordable for people who have been laid off, causing business to close. While people in big cities march for the increase in the national minimum wage, they don’t think about the well-being of the citizens in these low cost of living states, or how it will be harmful for them. The federal minimum wage that the Fight for 15 is demanding would ruin these communities, effecting millions of hard working people. The economy in these low cost of living states would be devastated by such a high federal minimum wage increase, causing an increase in business closures and unemployment.

Raising the minimum wage causes higher prices and inflation, hurting the economy. Promoters of the raising of minimum wage to $15 believe that because of the increase in revenue, there would be an increase in spending, stimulating the economy. What they do not account for however is how much prices will rise and the amount of inflation caused by this. One of the basic laws of economics is that if the price of something goes up, people buy less of it (Learnt Liberty, 2016). When people decrease spending, it hurts the economy. Some businesses will not be able to afford paying their employees $15 an hour, causing them to raise their prices. Raising the minimum wage has shown this to be true in the past. NBC News found that the “price of a cup of coffee went up by 10 to 20% in Oakland, California, after a 36% minimum wage hike in the city to $12.25. The report also found a 6.7% rise in coffee prices in Chicago after the minimum wage rose to $10” (Procon, 2017). These raises in minimum wage force these companies to increase their prices so they won’t go out of business. It also forces companies to decrease the size and the value that the consumer gets. A 2015 Purdue University study found that raising the wage of fast food restaurant employees to $15 would result in a price increase of 4.3% and 25%, or a reduction in product size between 12% and 70%: ‘a hamburger would be much smaller,’ the researchers stated” (Procon, 2017). These companies can’t give the same value to their consumers while still expecting to make a profit after paying their employees $15 an hour. This hurts the poor as many of them are forced to eat from fast food chains because of their cheap prices and good deals. This raise in minimum wage will not only affect the companies, but will also affect the people trying to eat there. If minimum wage increases to $15 an hour, causing higher prices, it will hurt the poor because they disproportionately suffer from price inflation.

Raising the minimum wage to $15 dollars an hour would force businesses to lay off employees and raise unemployment levels. These higher wages would cause employers to charge higher prices, hirer more productive workers, or cut costs in other areas (Milsap, 2017). Increasing the cost of labor to $15 an hour decreases the employer’s demand for labor. It would cause employers to try and offset the damaging effects of the new minimum wage by paying people lower than normal wage increases if they had made above the minimum wage before (Wilson, 2012).  Other firms will try to increase worker productivity by requiring better attendance, expecting the jobs to be done faster, cutting worker training, and/or by minimizing the hours the employees work, to save money. This will also cause more firms to fire employees who perform poorly quicker, because they cannot afford to have them with these higher wages (Wilson, 2012). Many big-name companies have spoken out against the new push for an increase to a $15 minimum wage. Jamie Richardson, who has an MBA in economics and is Vice President of the fast food chain White Castle, said that the company would be forced to close almost half its stores and let go thousands of workers if the federal minimum wage were raised to $15 (Procon, 2017). The economic magazine “Forbes” also reported that “an increase in the minimum wage has led to the closure of several Wal-Mart stores and the cancellation of promised stores yet to open” (Procon, 2017). It is not only billionaire business owners demanding the maintenance of the current minimum wage however. In 2009, the Governor of America Samoa, Governor Togiola Tulafono, testified before Congress saying “We are watching our economy burn down. We know what to do to stop it. We need to bring the aggressive wage costs decreed by the Federal Government under control. Our job market is being torched. Our businesses are being depressed. Our hope for growth has been driven away” (Wilson, 2012). The constant raising of minimum wage destroyed the businesses and economy in America Samoa, causing a huge spike in unemployment, and causing businesses to close. The effects were so distinct on the island’s economy that President Obama signed into law a bill postponing the minimum wage increases scheduled for 2010 and 2011 (Wilson, 2012).  President Obama was able to see how disastrous these minimum wage increases would be, which helped the American island to recover. 

In addition to these increases in unemployment, a $15 minimum wage increase will also cause companies to cut costs by outsourcing jobs overseas or using robots instead of paying humans. Raising the minimum wage would encourage companies to outsource jobs to countries where costs would be lower. This outsourcing of jobs would be some companies only option to stay open because they wouldn’t be able to afford to pay employees such high wages. Because of this, many companies would try to relocate or outsource jobs to places that have cheaper work. Over 2.3 million jobs were outsourced in 2015 due to an increase in minimum wage, and increasing minimum wage to $15 would cause that number to get even higher (Madison, 2016).  This outsourcing would cause layoffs in America, increasing unemployment. This increase in minimum wage would weaken American businesses, allowing foreign businesses to take advantage of their American competitors’ struggles, and might try to eliminate American competition, hurting the economy (Madison, 2016). A 2014 study of 400 US Chief Financial Officers by Campbell Harvey, PhD, and J. Paul Sticht, Professor of International Business at Duke University, found that 70% of CFOs would "increase contracting, outsourcing, or moving actual production outside the United States if the minimum wage were raised to $10 an hour” (Procon, 2017). This push to go to a $15 minimum wage would only amplify the affects and statistics. If the minimum wage is increased, companies may use more robots and automated processes to replace service employees. Robots are becoming more advanced each year, and are already prevalent in many fast food chains, such as Royal Farms and Wawa. Many companies are already considering switching over to using automated service robots and kiosks because of the low costs and no wages, and this push to a $15 minimum wage would only convince them more to switch over. The Washington Post observed that as minimum wage campaigns gain traction around the country, "Many restaurant chains are already at work looking for ingenious ways to take humans out of the picture, threatening workers in an industry that employs 2.4 million wait staffers, nearly 3 million cooks and food preparers and many of the nation’s 3.3 million cashiers" (Procon, 2017). These jobs could easily be lost because of the advancement in technology, and raising the minimum wage will only add to the fire. A $15 minimum wage will affect job security and cause unemployment because of its effects on the outsourcing jobs.

The $15 minimum will not help fight poverty and only rarely help the poor people that it is targeted for. The main reason people would want to raise the minimum wage is the claim that an average person cannot support a family with the current minimum wage prices. According to the Pew Research Center, 16- to 24-year-olds make up 50.4% of minimum wage earners, despite representing only 13.7% of the workforce as a whole (Procon, 2017). “The popular belief that minimum wage workers are poor adults, 25 years old or older, working full time and trying to raise a family is largely untrue. Just 4.7% match that description.” (Wilson, 2012). The supporters of the new minimum wage increasing to $15 believe they are helping the poor, full time, adult workers trying to support a family, even though the data suggests that this is only very rarely the case (Wilson, 2012). The minimum wage affects people with traditional, wage paying jobs. While it is meant to fight poverty, the low-wage workers and the class of poor people only partially overlap (Zwolinski, 2016). There is a large number of poor people who don’t see the benefits from an increase in minimum wage, whether they are stay at home parents, unemployed, or gig employees. There is also a large number of low wage workers who aren’t from low income families, like teenagers and students that will receive these benefits instead of the poor (Zwolinski, 2016). These minimum wage increases do not help poverty according to many academic studies. The reason for this is that 65 % of poor Americans are unemployed (Wilson, 2012). A study from the Federal Reserve Bank of Cleveland found that although low-income workers get higher wages when the minimum wage is increased, "their hours and employment decline, and the combined effect of these changes is a decline in earned income... minimum wages increase the proportion of families that are poor or near-poor" (Procon, 2017).  Raising the minimum wage to $15 will not help the poor and fight poverty, but will have the reverse affect and hurt the poor while helping those who are not in need of it.  

The last and most significant effect of a $15 minimum wage is that it will hurt low skilled workers – the people it is intended to help. The whole reason behind the minimum wage is to help low skilled workers get paid fairly and consistently. An increase to a $15 minimum wage however will have an adverse effect: hurting the low skill workers it is supposed to protect. A rise in the minimum wage increases the demand for workers with greater skills because it reduces competition from low-skilled workers (Wilson, 2012). From an employer's perspective, people with the lowest skill levels cannot justify higher wages. These higher wages will hurt immigrants, low skilled workers, and people with little education because they aren’t worth the $15 an hour to the employers (Zwolinski, 2016). Increasing this minimum wage will also decrease the chance for upward mobility with young and low skilled workers. Entry level jobs are important for low skilled workers because it teaches them job skills, builds their resume, and helps them to promote to a better paying job (Wilson, 2012).  Because the business and firms won’t hirer these low skilled workers, the $15 minimum wage causes a decrease in entry level jobs. Don Boudreaux, who has a PhD and is an Adjunct Scholar at the Cato Institute, said that "the minimum wage cuts off the first rung of the employment ladder, and it is that first lowest paying rung that provides the skills and experience workers need to reach the next rung and to continue climbing their way to a better life" (Procon, 2017). Without these entry level jobs, it causes lower earnings and an increased likelihood of unemployment. The economic studies and theories back up the notion that increasing the minimum wage will hurt low skilled workers. A study by Jeffrey Clemens, PhD, and Michael J. Wither, PhD, found that “minimum wage increases result in reduced average monthly incomes for low-skilled workers ($100 less during the first year following a minimum wage increase and $50 over the next two years) due to a reduction in employment” (Procon, 2017). Because the new minimum wage proposal of $15 is so high, it will negatively affect low skilled workers and cause unemployment. 

Increasing the minimum wage to $15 an hour is not the solution our country needs to help the impoverished. The Fight for 15, although well intentioned, do not understand the economic consequences that a $15 increase would have on our economy. Nobel prize winner in economist Milton Friedman once said “The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken” (Wilson, 2012).  There are still solutions that can be made instead. One solution would be Milton Friedman’s Negative Income Tax (Zwolinski, 2016). This negative income tax would be an efficient way of achieving redistribution. The Negative Income Tax would target poverty instead of employment, which is the minimum wages biggest flaw. It is a tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government (Zwolinski, 2016). The government should help the poor in some way, however minimum wage is a bad way to go about it. If low-wage workers are supported through tax cuts and rebates, then all taxpayers can share the financial burden. Another solution would be to let the free market determine the wages instead of the government. According to Mark J. Perry, PhD, of the American Enterprise Institute, government-mandated minimum wages "are always arbitrary and almost never based on any sound economic/cost-benefit analysis... in contrast market-determined wages reflect supply and demand conditions that are specific to local market conditions and vary widely by geographic region and by industry" (Procon, 2017). Having wages that are determined by the free market will result in more employment opportunities and less unemployment for low skilled workers and increase profit for companies. What this country needs is not another increase in minimum wage, especially not to $15. What it needs is good policies that generate faster economic growth to benefit all workers.
