Should businesses be required to pay a "livable wage" set by the government?


Fact Box

  • Minimum wage is the “lowest amount an employer is allowed to pay an hourly worker”; established in 1938 at $0.25 per hour, it has been raised 22 times. Since 2009, the Federal Minimum Wage is $7.25 for non-exempt employees. 
  • In 2018, 1.7 million workers, or 2% of all hourly paid, non-self-employed workers, earned wages at or below the federal minimum wage of $7.25.
  • Each state has its own set minimum wage aside from the federally outlined wage.
  • As of 2019, 29 states set their minimum wage higher than the federal rate.
  • 50.4% of minimum wage earners are 16 to 24.

Brian (No) 

Minimum wage jobs are meant to provide an entry point to the workforce for unskilled workers. They're not intended to fully support one person living on their own, not to mention a family. Less than 3% of workers in the U.S. earn minimum wage, and over half of those workers are between ages 16 and 24. Raising the minimum wage rate to a 'livable wage' would greatly increase the cost of labor for U.S. companies. Businesses would not be able to just absorb these extra labor costs, leaving them with a few options, all of which would be undesirable. 

The first and easiest option would be to raise the cost of products to account for these higher wages, which would, in turn, make the cost of living even higher. Another option would be to employ as few workers as possible and turn to automation as much as possible, both of which would eliminate jobs. The workers that did remain would probably be forced to do much more work to cover the lost workers, causing their job satisfaction to go down. Finally, the outsourcing of jobs to other countries would greatly increase.

Unfortunately, many smaller companies would not be able to afford to take advantage of any of these options and could be forced to close. It would also prevent many small businesses from being able to start up due to the higher cost of entry. Raising the minimum wage rate to a 'livable wage' might seem nice to the workers immediately affected, but it would not be beneficial to the economy as a whole and would significantly increase the unemployment rate. 

Killian (Yes)

Critics usually raise similar-sounding arguments when discussing raising the minimum wage. Some of them being that minimum wage jobs aren't supposed to sustain a family and that the majority of minimum wage workers are teenagers. However, these arguments are not necessarily true. Determining certain claims like this purely from minimum wage statistics alone is a stretch. How so? The reason is that aside from the federal minimum wage, each state has its own set wage. This means a worker making the minimum in Nevada ($8.25) is making more than the federal wage, but just barely. Another factor to consider is that when talking about raising the minimum wage, one must consider the workers making between the current wage of their state or job status and the higher wage proposed. When this is considered, the average worker affected by raising the minimum wage is 35 years old.

There would be many positive benefits to raising the federal minimum wage. People tend to have higher morale when they believe they are being paid fairly for their work. This improvement leads to an enhanced work ethic, increased worker productivity, and a decrease in employee turnover and absenteeism. Raising the minimum wage would also help to support the economy. Typically, it is low wage workers with disposable income who put the most back in. A rise in federal minimum wages would mostly benefit these workers, with a total wage increase of $144 billion.

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