Is raising the minimum wage a new wedge issue in America? | The Allegiant

Is Raising The Minimum Wage A New Wedge Issue?

Pros and Cons for Raising the Minimum Wage

Minimum Wage

Protests have sparked in the past week by fast food workers from various cities around the country with a centralized goal of increasing the minimum wage from $7.25 to $15.00 an hour. I have heard on some news stations that this line of work is meant for teenagers to give them experience in the workplace and that it should be a stepping stone to get to a better career. Contrary to what many people may believe, the average age of a fast food worker is not that of a teenager just looking for a summer shift.

Data collected by the Center for Economic and Policy Research breaks down the categories for fast food workers in the United States. From 2010-2012, there are four age ranges for fast food workers:

16-19 years old = 30%

20-24 years old = 30.7%

25-54 years old = 36.4%

55 and older – 2.9%

The talking point that most of these workers are mostly young adults just simply isn’t accurate. These numbers show that the majority of workers are at least in their 20’s, which means that they are more than likely attempting to earn a wage that can pay the bills. Obviously, working for a fast food chain will not make you rich and I am quite certain that the workers realize this fact. A troubling issue with this kind of work, however, is that you are only bringing home a paycheck of around $290 per week before taxes.

A minimum wage worker is not paid enough to even bother with trying to fit insurance into their budget if this is their sole income. I have never heard of anyone wanting to ‘flip burgers’ the rest of their lives but times are tough and jobs are scarce. Sadly, some people are too quick to judge those who have been affected by a bad economy who may have been laid off due to job outsourcing or company cutbacks.

In 2011, it is estimated that over 2.2 Million jobs were outsourced to other countries, leaving less jobs for Americans. The number one reason given by the companies as to why they sent jobs overseas was to “reduce or control costs”. (Statistic Brain – Outsourcing)

Manufacturing jobs used to be the backbone of the middle class in America, but over the past few decades jobs have become less prevalent. There has been a new industry arising which, in my opinion, has put a halt to the livable wages and benefits of the 1950′s. Temporary employment agencies have been growing and this has created yet another blow to average American workers for a few reasons.

The first issue with a temp agency would be that the worker does not belong to the company they might be working for, they technically work for the agency. With this type of employment, the worker is usually paid lower wages than someone who is doing the same job at the facility they are working. Benefits are out of the question with most temp agencies and even worse is job instability. I have known people who had notes attached to their time-cards on Friday that simply stated, “your services are no longer required at our facility, please report back to your temp agency.”

Since there have been 40 failed attempts (and counting) to repeal “Obamacare”, it is safe to say that it will be here in 2014. While this is a whole different topic on it’s own, it is a part of the growing minimum wage issue in the US. Due to unforeseen or overlooked consequences of the Affordable Care Act, businesses are finding ways to exploit the policy which will require them to insure their employees.

One problem with the ACA is that it only requires employers to insure workers who are considered to be full time. Full time according to the ACA means that an employee works 30 or more hours per week. Some employers have already began downsizing the number of full time jobs at their establishments which ultimately means fewer people they will be required to cover for insurance.

There are undoubtedly going to be many Pros and Cons to raising the minimum wage in this country so I have noted a few for each:


- Livable Wage
- More money to purchase, which means more money going into the economy
- Higher costs for fast food might make people eat healthier
- Lower unemployment rate


- Drives up prices of goods
- Will bring in new influx of workers with degrees or higher qualifications
- Less employees per shift to cut back costs

With higher starting wages, there would be many more “overqualified” job seekers applying for positions where they may not have previously considered. Fast food jobs might be a type of employment that college degree holders might decide is worth working for $15 per hour. This would actually be a bad thing for the current workers at minimum wage jobs because there would be many, more qualified, individuals applying for their current position. I am positive that if there was a choice of hiring someone with a college education that the employers would more than likely pick those candidates for open positions.

On the current list of most powerful brands according to Forbes, McDonalds is number 7 with a value of $37.4 Billion. What would happen if the minimum wage was increased? Would less people eat fast food and choose to eat at home? The dollar menu might become the five dollar menu which could be a good thing for our health but that still leaves the uncertainty of available jobs.

Unfortunately with this debate, we must face the reality that capitalism is both good and bad. A large corporation such as McDonalds would not necessarily need to increase the price of their food, but they probably would due to greed. Yes greed is the underlying factor in all of this. We do live in a capitalistic society, however how much money is enough? How big does the CEO’s yacht REALLY have to be in order for them to feel fulfilled?

Fred Deluca, the President and Co-Founder of Subway, is estimated to have a net worth of $2.6 Billion and yet he chooses to keep employees at minimum wage at over 24,722 locations. Mcdonalds starts their employees at minimum wage, however Donald Thompson, the CEO of McDonalds, received compensation of over $4 Million in 2011 alone.

A minimum wage employee makes about $15,080 per year before taxes but the CEO makes over 265 times that amount. What do you think about that America? Is a CEO being greedy for making that much more than their average worker per year? Where do you stand on raising the minimum wage to $15 per hour?

Posted by on Aug 11 2013. Filed under Business, Hot. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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