Recently, there has been social media coverage of businesses—primarily restaurants—posting signs announcing that they are understaffed because people are refusing to work. But this labor shortage is primarily due to the refusal of businesses to pay their employees a fair wage for their strenuous—and in light of the pandemic, dangerous—work. The refusal of businesses to adequately compensate American workers for their labor shows that it is imperative that the federal government raises the federal minimum wage to $15 an hour.
Increasing the federal minimum wage is the humane thing to do. Today’s federal minimum wage is the same as it was twelve years ago. When adjusted for inflation, the $7.25 minimum wage was worth 17% less in 2019 than in 2009. Though the federal minimum wage was initially meant to provide a “decent living,” the current minimum wage of $7.25 per hour keeps workers and their families in poverty. Raising the federal minimum wage to $15 would lift nearly one million Americans out of poverty, particularly in poorer, rural states where the cost of living expenses is lower. The COVID-19 pandemic has clearly shown that corporations are willing to treat their frontline workers as expendable. Due to the pandemic, the leisure and hospitality industry has seen a loss of 3.5 million jobs, while those who have kept their jobs have risked their lives for low wages.
As the costs of healthcare, education, and housing continue to skyrocket, Americans should not be forced to take on massive amounts of debt or live in poverty. A $15 minimum wage is the first step in the long process towards affording American workers the basic dignity and comfort that the current minimum wage denies them.
Opponents of minimum wage hikes have argued that raising the federal minimum wage from $7.25 to $15 an hour would force small businesses to close, as they would not be able to afford to pay their workers. However, studies have found that areas that raised minimum wage have experienced little to no changes in employment levels. Economies correct in the long run, so if there are short term labor impacts of raising the minimum wage,they will likely eventually correct to normal levels as businesses, workers, and consumers adjust to the wage change’s effects. Many also argue that a minimum wage hike will cause inflation and increase prices of consumer products. While this is true to an extent, research has shown that the price differences are so small and spread out that they are hardly felt by consumers. The economic impacts of raising the minimum wage are miniscule, especially compared to the benefits. In fact, raising the minimum wage could actually boost the economy by increasing consumer spending.
Furthermore, millions of Americans are employed by massive corporations with billions of dollars. In fact, CEOs’ annual compensation increased 1,167% from 1978 to 2019, while worker wages have only increased by 13.7% during the same time period; as of 2019, the ratio of CEO to worker pay is 320-1. The money for higher wages already exists — just in the pockets of billionaire CEOs instead of workers. These companies can easily afford to raise the wages of their essential workers and offset price differences, all while maintaining incredibly high profits.
Raising the minimum wage is the best course of action. It is necessary to improve the quality of life of American workers, and it will not derail the economy by causing inflation or mass unemployment. Hard work has always been respected in American society, but it is only justified when there is the possibility of a better future. The $7.25 minimum wage does not guarantee that future. While the $15 minimum wage still does not guarantee that future, it is a start on the right path.