2/14/2007

Minimum Wage: It's Official

It is official. As of February 1, 2007, the national minimum wage is going to be hiked up to $7.25 over the next 2 years and 3 months. The first raise is supposed to take place May 1, 2007 to $5.85. The second, May 1, 2008 to $6.55 and third, May 1, 2009 to $7.25 <http://www.shrm.org/government/insiders_published/>. I realize that this has been part of discussion already, but it is a topic I don't think gets old. The only reason I agree with raising wages is for the average college student. As living expenses increase and wages do not, it is more difficult for students to get through school on crappy wages, which forces them to take out more student loans and dig themselves deeper into debt. This is one way I feel that the government can help support college students and their ability to make just a little more money. I know that grants are given to students, but a little more money in the pocket is always nice. I realize that businesses will probably raise their prices to cover the increases and the government won't be able to really do anything to stop that. But, if prices are being raised around us anyway, why not get a little more money out of it? So the question I pose to you is: Who really benefits from the increase in minimum wage? In my opinion, it is only those who are actually getting paid the lowest possible wage and no one else.

4 comments:

Jessica said...

I fear that this legislation will have an awkward on society when the economy regains order. For the last two decades the U.S. economy has ridden an unusual wave; we have seen low inflation, low unemployment and radical economic growth. One day it will subside, and what will happen to our economy with a locked in minimum wage? I only foresee disaster, because there will be a huge increase in unemployment.

bend said...

Raising the minimum wage has a negative effect on those of us who are paid on commission or don't get paid the minimum wage. Just because the minimum wage goes up, it does not mean that our salary will go up. Instead with the increases in prices because of the minimum wage increase I will become poorer and so will others that don't get paid the minimum. Are we helping the standard of living go up overall,or are we bringing more people, who had a higher standard of living, down because of this change? What do you think?

isabelle said...

Bend, you have a very valid point. I agree that the raise in minimum wage hurts more than it helps. But ever since the enactment of minimum wage, hasn't the overall standard of living gone up? I'm not saying that minimum wage is the sole reason, but it doesn't really seem like it has hurt anything. What do you think?

Dr. Tufte said...

Jessica: our growth has not been "radical". Sustained is about the best word for it.

Bend has raised a very good point. Why is just about everyone in favor of a law that creates some losers? You'd think that something so popular would have no losers.