As with the daily routine, Jennifer Green wakes up early on a Sunday morning to start the beginning of her long work filled week. Jennifer is 20 and struggling to pay off her student loans, resulting in the need to fill up her schedule with multiple low-income jobs. On a typical day, she gets up at 6am to get a shift in before classes, which are then followed by more shifts. Even with all these jobs, Jennifer barely scrapes by on payments and can rarely afford even basic necessities after paying monthly costs. Jennifer is one of millions of people who struggle to live off of the federal minimum wage of $7.25. While the first reaction to solve the problem could be thought to raise the minimum wage, many factors, both good and bad, could result.
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To demonstrate, Epstein, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution and the Laurence A. Tisch Professor of Law at New York University Law School, emphasizes that “the simple rules of supply and demand dictate that any increase in the minimum wage that expands the gap between the market wage and the statutory wage will increase the level of unemployment. The jobs that potential employees desperately need will disappear from the marketplace” (par. 22). Therefore, the extra money that companies pull to raise minimum wage is taken from other workers’ paychecks and consequently decreases the number of open jobs. As a result, the more fortunate workers receive a raise, while the lower skilled workers are left with fewer and fewer job opportunities. For example, Mitch Hall, a student at the college of William and Mary, recently traveled to Seattle and described his job searching experience as a failure “due… to Seattle’s absurdly high minimum wage [$15]. Employers, especially in the restaurant and food services industries, are far less willing to take chances on who they hire with so much money on the line” (par. 15 and 16). Simply stated, companies no longer look at a person’s qualities, but instead look at his or her job experiences, playing it safe by choosing those more experienced. This results in many …show more content…
One such example is Walmart, which “announced a 10% decline in earnings per share, for the fiscal year’s third quarter. Higher wages were ‘by far the biggest driver of the decline in consolidated operating income’… Walmart’s hourly wage increases accounted for approximately 75% of the reduction” (Puzder, par. 2). Unquestionably, Walmart is only one of many small companies or businesses affected by this loss in profits. To explain, an article from the Wall Street Journal reports that “an increase [per employee’s paycheck] of $2,370 a year would decrease the profit per employee by 38%. That makes those jobs less valuable to the company and creates an incentive to eliminate positions” (Puzder, par. 11 and 12). In other words, companies find that when employees are paid more, their work to pay ratio decreases as they used to do the same amount of work for less pay, leading to a decrease in profits. Furthermore, Walmart continues to struggle with declining profits because “Unlike the government, Walmart can’t survive if it isn’t profitable. When profits decline, companies must react- or shareholders will. Walmart’s stock suffered its worst single day in 25 years when the company predicted the earning-per-share dip. The stock is still more than 10% down” (Puzder, par. 4). Since Walmart cannot survive if it is not profitable and raising minimum wage decreases the
To demonstrate, Epstein, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution and the Laurence A. Tisch Professor of Law at New York University Law School, emphasizes that “the simple rules of supply and demand dictate that any increase in the minimum wage that expands the gap between the market wage and the statutory wage will increase the level of unemployment. The jobs that potential employees desperately need will disappear from the marketplace” (par. 22). Therefore, the extra money that companies pull to raise minimum wage is taken from other workers’ paychecks and consequently decreases the number of open jobs. As a result, the more fortunate workers receive a raise, while the lower skilled workers are left with fewer and fewer job opportunities. For example, Mitch Hall, a student at the college of William and Mary, recently traveled to Seattle and described his job searching experience as a failure “due… to Seattle’s absurdly high minimum wage [$15]. Employers, especially in the restaurant and food services industries, are far less willing to take chances on who they hire with so much money on the line” (par. 15 and 16). Simply stated, companies no longer look at a person’s qualities, but instead look at his or her job experiences, playing it safe by choosing those more experienced. This results in many …show more content…
One such example is Walmart, which “announced a 10% decline in earnings per share, for the fiscal year’s third quarter. Higher wages were ‘by far the biggest driver of the decline in consolidated operating income’… Walmart’s hourly wage increases accounted for approximately 75% of the reduction” (Puzder, par. 2). Unquestionably, Walmart is only one of many small companies or businesses affected by this loss in profits. To explain, an article from the Wall Street Journal reports that “an increase [per employee’s paycheck] of $2,370 a year would decrease the profit per employee by 38%. That makes those jobs less valuable to the company and creates an incentive to eliminate positions” (Puzder, par. 11 and 12). In other words, companies find that when employees are paid more, their work to pay ratio decreases as they used to do the same amount of work for less pay, leading to a decrease in profits. Furthermore, Walmart continues to struggle with declining profits because “Unlike the government, Walmart can’t survive if it isn’t profitable. When profits decline, companies must react- or shareholders will. Walmart’s stock suffered its worst single day in 25 years when the company predicted the earning-per-share dip. The stock is still more than 10% down” (Puzder, par. 4). Since Walmart cannot survive if it is not profitable and raising minimum wage decreases the