A $15 minimum wage would be radical and harmful

Daniel Hung

The Million Student March protested on Nov. 12 for a national $15 per hour minimum wage. The demand, however, would be a radical move by the government and only hurt those it is intended to help. Even prominent liberal Democrats such as Hillary Clinton and Barack Obama oppose a national minimum wage of $15 per hour. Obama, for one, only supports raising the current hourly minimum of $7.25 to $9.00, then to $10.10 the following year.

The reason why even some liberals are against such a sharp increase in the minimum wage is that studies and history have both shown us that such an increase hurts poor people the most.

Many businesses would close if a minimum wage increase doubles their labor costs. For example, the fast food industry is already struggling with declining profits — near campus, we have seen Jack in the Box, Burger King, Noodles and Company and others close in the past year alone. With businesses like these operating on such a thin profit margin to begin with, a $15 minimum wage would likely fill West Campus with boarded up restaurants and stores.

Nationally, businesses anticipate widespread store closures under a $15 minimum wage — White Castle predicts it would have to close half their stores. Proponents point to a few cities like Seattle in claiming $15 minimum wage can be done without significant harm, but Vance Ginn, economist for the Center for Fiscal Policy, rejects this claim.

“Despite the fact that minimum wage in Seattle was only raised to $11 in January, restaurant employment in Seattle has declined by 700, while in the rest of the state, it has increased by 5,800.” said Ginn.

It should be noted that Seattle was already one of the most expensive cities to live in, thus already had relatively high wages. Therefore, doubling the minimum wage would be even more destructive for nearly all other cities, not to mention poor rural areas.

For the employers that survive a $15 minimum wage, they would likely do so through reducing workers’ hours, laying workers off and increasing their prices.

“The Law of Demand teaches us that as price of labor increases there will be fewer people employed.” said Ginn.

A study by a former Director of the Congressional Budget Office found that a $15 minimum wage could mean the loss of 6.6 million jobs nationally. This would mean an increase in the U.S. unemployment rate from 5 percent to 9 percent.

A $15 minimum wage would also increase the prices of goods and services across the board. Doubling the current minimum wage would lead to great inflation, which would hurt poor people that are struggling to get by. Proponents may argue that poor people will be able to keep up with inflation due to the increased minimum wage, but this leaves out those who are not currently working, such as students, retirees and the unemployed.

I think we can all understand the intention of proponents for $15 minimum wage: That there are poor, hard-working people struggling to make ends meet. However, raising the minimum wage to $15 will do them much more harm than good. Maybe after 50 more years of inflation, a $15 minimum wage will make sense.

Hung is a second-year law student from Brownsville.