Over recent years low wage employees have pushed and clawed to raise the minimum wage to $15 per hour. In California and New York they succeed. The plan is to have the new minimum wage in place by 2020. In other parts of the country low wage workers continue to pursue the same dream to get their minimum wage to increase. In St. Louis low-wage workers participate in one-day strikes in order to get their employers to take notice. Missouri has had many bills passed by lower-level forms of government only to be vetoed and then resubmitted and passed but blocked by state legislature. The case to finally raise minimum wage has been taken up to the Missouri Supreme Court. Everyone is currently waiting for a decision to be handed down.
What these employees don’t understand is that if minimum wage is increased, people will lose their jobs. This is a classic example of supply and demand. These restaurants need workers to meet the demands of customers. With a low minimum wage, employers are able to staff more people to meet those demands. Once that minimum wage is raised, what was being paid to two employees will be spent on one employee. The demand for workers will still be there but the supply will be greatly reduced because these companies can’t afford to pay the same amount of people more money. These companies won’t all of sudden have more money. This new wage hike will raise fixed costs to pay salaries. In order to cut costs the logical thing would be to fire their workers. Furthermore, more responsibility will be placed on the remaining employees and the costs may be greater than the benefits. Whatever the competitive edge a company might have could be compromised because of lack of employees. For example with fewer employees the quality of products may be diminished. Although it seems like a great idea to help out the lower class, it will also mean the loss of jobs for many people as well. Catch 22.