A higher minimum wage?: Yes and No

Oregon’s minimum wage will rise to $14.75 an hour by 2020, approved by legislators this year on a party-line vote: 34 Democrats for, 26 Republicans against.

No: It will kill jobs

By Christopher Shurring

This new minimum wage laws will put students out of work. The negative effects have already begun. “Since they have implemented it, finding jobs has gotten way harder,” complains junior Eamon McElroy-Fuchs.

Minimum wage work is the gateway to the job market, but “to bring [students] in at $15 an hour is cost prohibitive to a lot of businesses,” says Fairley’s Pharmacy owner Shawna Laxson. Businesses will have to turn down teens because “they aren’t living off that wage,” and $14.75 an hour is too much to pay for nominal labor. The fallacy here is that minimum wage is not meant to be a livable wage, it’s simply meant to be a starting point for unskilled laborers to move up the company ladder.

The problem with bills like this one is that they set minimum wage too high. Minimum wages are like a hurdle set too high for some folks to jump over,”  says Lincoln economics teacher Rick La Greide.  With lower minimum wage more people can be employed; some job is better than no job. Conversely, “only approximately 4.5 percent of the population of the U.S. earns the federal minimum wage,” says La Greide, most of whom will soon move up in the company ladder and get pay raises along the way.

“Entry level jobs are meant to be the first rung of the ladder,” not a place to stay and expect tons of money, La Greide says.
A bump to $14.75 may not seem like a huge increase, but an average 40-hour work-week, not including overtime, would cost businesses an extra $11,440 a year. That’s enough to pay for another employee working 25 hours a week at the current minimum wage $9.25. With such a large movement in labor cost, each person will have to do 50 percent more work in the same amount of time, just to maintain their current cost of productivity. This effect will not be nominalized by the slow increase in wages.

Many students get their start with jobs that require little or no skilled labor: shelf stocking, clerk, cashier, etc. With a higher minimum wage, finding these jobs will be much harder. This is because businesses will replace these jobs with technology because it will be more cost effective. “You may have already seen self checkout at grocery stores or even touch screen ordering at McDonalds,” La Greide says.  This is comedically ironic: The law intended to give people a better income is taking away their income by making them more expensive than a machine.

Senior Taylor Duey worries that the raised minimum wage will hurt unskilled laborers like high school students. For Duey,  “By the time [20]22 rolls around, I will have the education to deserve that amount. I will have finished culinary school by then,” she says. Her skills will deserve $15 dollars an hour.

What if your labor simply isn’t worth $14.75 an hour? Then the added cost of labor must be accounted for in the cost of products. For example, Fairley’s pharmacy also sells sweets, coffee and shakes at a soda bar. Now this venture will cost her more for the barista labor, prices must go up, Laxson says. The only other alternatives are to dismiss some employees or diminish open hours. Both limit productivity and shutter sales.

Tallying the troubles, these minimum wage laws will do more harm than healing. The increased cost of labor will encourage the replacement of customer interface jobs with robots, limiting the unskilled labor job market. This price floor on labor will negatively impact students, simply because their labor isn’t worth $14.75 an hour. The simple solution to the minimum wage is to abolish it or decrease it.

Yes: It’s the moral choice

By Alec Van Oossanen

Despite the careful planning and statewide support that the minimum wage bill has received, some right-leaning critics still claim that the raise in the minimum wage will result in dramatic increases in product costs and a decrease in the number of workers a business can afford.

Those statements are  more fiction than fact, and are only applicable in the most extreme situations. Not only are the accusations false, but many critics refuse to acknowledge the definite benefits of an increased minimum wage.

Let’s look at reality.

Perhaps the biggest argument skeptics put forward is that an increase in minimum wage would result in many layoffs.

“The fact is, we have a set amount of hours we need in labor based on sales at each location, and we would stick to that calculation instead of cutting positions,” says Vanessa Parscale, a controller at Laughing Planet.

Besides, most of the employees already make  the new minimum – or more.

While Laughing Planet might be able to afford to keep its employees despite an increase in the minimum wage, will a smaller local business deal with it?

Goose Hollow, established by Lincoln graduate and former Portland mayor Bud Clark, fits that bill . 

“Even after the increases take place, it will not affect the number of employees that we hire,”  says Rachel Clark,  daughter of the original owner and also a Lincoln graduate.

Critics also claim an increase in the minimum wage will result in a drastic increase in product costs. While this may be one of the few claims that actually has a hint of truth, the increases are not near as high as critics like to believe.

“There might be little increases on little things,” says Clark. “It will not change the prices much.”

This rings true for most businesses. In most cases, the raise in the minimum wage would do no more than create little increases on small things, and in some cases, it can mean as little as providing fewer napkins.

This seems to be worth it when compared to the benefits that it can provide.

In Oregon, two out of five workers make below the new minimum wage. For minimum wage workers, whether they are young students working for their college tuition, or parents working day and night to provide for their families, the raise will help make that possible

The truth is that Oregon’s current $9.25 minimum wage does not provide the money needed to provide for a family.

In a state where so many workers are making and living on minimum wage, it’s inappropriate and insensitive to imply it should be anything less than a livable wage.

“For these people, this is their life,” says Clark. By raising the minimum wage, we can bring Oregon one step closer to equality.

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