The Pros and Cons of a $15/Hour Minimum Wage

Our attorneys have been assisting the Orange County and Southern California communities for over 40 years.

Request free consultation

The Pros and Cons of a $15/Hour Minimum Wage

Request free consultation
Posted By DAM Firm | May 17 2016 | English, Workers Rights

The minimum wage debate is an ongoing, hotly contested subject. Proponents of the suggested $15/hour minimum cite clear benefits – families would have more income to secure a better standard of living and wouldn’t have to rely on government programs for support. However, the recommended increase has also sparked some concern. Opponents are quick to reference issues like an increase in the cost of goods and its effect on the job market, arguing that essentially doubling the cost for an employee (depending on the current minimum in a given state) will result in hundreds of thousands of terminations. Which group is right?

The Pros of a $15/Hour Minimum Wage

  • Bread for breadwinners. The most obvious benefit is that the new wage would enable minimum wage earners – including many heads of households – to pay for rent, take care of transportation costs, and live a higher quality of life.
  • This could also lead to greater opportunities for their children in education and health care. For instance, many health problems are related to the prohibitive costs of healthy foods and the lack of a way to access such offerings. Employees could also leverage their new funds to pursue better opportunities and further stimulate the economy.
  • A green transfusion for the economy. Though some fear that the proposed minimum would negatively affect the economy, minimum wage workers would have a lot more to spend. Hence, the fear may be unwarranted, as newly empowered consumers could spend more. In fact, millions of dollars would go toward the pay increase, which means a sizable amount could be pumped into local economies.
  • Less government reliance. Similarly, if workers are paid enough to support a healthy lifestyle, they may not have to turn to government programs for assistance.
  • Businesses can absorb the costs. Payroll costs may increase, but many enterprises can handle those expenses. As a result, business owners may still generate profits and could even tap into new consumer groups thanks to the increase.

The Cons

  • Higher prices. Many entrepreneurs are struggling to adjust to current increases of $10 or $12/hour minimums. In response, prices rise, new fees are charged, and hours or positions may be cut. Is this foreshadowing the market’s future? The food service industry, which largely functions on minimum wage jobs, may be the hardest hit. This field already struggles on thin margins.
  • The dark side of innovation. Proposed higher prices may have an unintended effect, as the money it takes to pay workers has to come from somewhere. Enterprises may not sit back and take the hit. Touch screens and automated kiosks are being rapidly developed and may replace some more expensive employees.
  • Other costs. Workers’ comp and benefits are based on hours worked, and subsequently, pay. Nonprofits that employ personnel may also have to adjust to the new minimum standards even though they might not receive a proportionate increase in the support they receive. This could lead many of these organizations to close their doors.

Regardless of which side you are on, there’s no denying that the next decade will present some dramatic changes to the US economy. It will be a volatile time for business owners, insurance and health providers, and other organizations that handle employment or employee benefits.

As this unfolds, stay aware of your rights. Whether you aren’t being paid according to new minimum standards or you’re being denied benefits that you should receive based on your new hours or new pay, be ready to fight for what you’re entitled to receive. For more information on these developing laws and information about filing a claim, contact our OC workers’ comp attorneys today.

Request Free Consultation

  • *required fields