What About a $15 Minimum Wage?

Growing up in Seattle, I was never sure how to interact with homeless people. I’ve always wanted to help them, but never been confident how to. “Do I give them money? Or food? Do I just smile and try to have a normal, human conversation with them?” I asked these questions every time I walked the streets, because inevitably, I’d come across them—Seattle/King County has the 4th largest homeless population of all counties in the country. Eventually I decided the best course of action might be legislative rather than face-to-face: to increase affordable housing, to increase accessible jobs, to increase the minimum wage, and similar things. So in 2014 when Seattle finally did decide to increase its minimum wage to $15/hour, I was thrilled.

But now I’m worried.

I’m not an economist. I struggle to understand articles about economic changes—even the ones I’ve linked to in this article. But even I can see that many of the articles written about Seattle’s minimum wage are negative. From Forbes to Fortune, people are saying the hike is a bad idea—that it is already increasing unemployment, or that it will increase it, or at the very least, that there will be fewer jobs around at $15/hour than there would be at $10/hour.

But there are some positive dissenting voices. Writers from the LA Times and Seattle Times are saying the naysayers have all used “garbage data” because there isn’t any reliable data yet—it’s far too early, they say, to conclude anything definitely.

I won’t try to make some technical argument to advance my own position. I don’t know enough to even have my own position. But I will say that I’m worried. I’m worried that by the time we do have reliable data, the many negative predictions will have been confirmed, and the people we’re trying to help will only be worse off. I’m worried about the people in California, now that they’re implementing a $15 minimum wage across their entire state. And I’m very worried about Bernie Sanders’ push to make that the national minimum wage. Shouldn’t we at least wait for some better data on Seattle before we change the whole country?

I want to help people. But this rush to get a $15 minimum wage is hasty, and it might very well be dangerous.

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  • John Brave

    Personal anecdote:

    As somebody who employs people, every time the minimum wage got increased, I had to fire somebody or somebodies. And then I had to increase prices to be able to afford the previous headcount when it was needed.

    It’s a vicious cycle. Increase minimum wage, fire employees. Increase prices to be able to afford needed employees, and it increases the cost for everybody, making things less affordable including those at the new minimum wage, and be back at the previous affordability level for those at the minimum wage.

    I believe setting a minimum wage is a way to boost unemployment. There are plenty of jobs that can’t be justified at a high minimum wage. So those jobs can never be justified, thus either eliminated or never created to begin with.

    One thing to keep in mind: with current technology, raising the minimum wage is a way to make technology that replaces humans more affordable than ever, like those machines to order meals at fast food places. Even at $30,000 per machine, it pays for itself in a year.

    Minimum wage increases make it more expensive for businesses, forcing those businesses that can’t replace employees with machinery to raise their prices, making the minimum wage increase irrelevant.

    One thing is clear. High minimum wage is a good way to eliminate the middle class.

    Do those making more than the minimum wage get a wage increase to match? For example, if the minimum wage is $10 per hour and somebody makes $20 per hour, that means she can afford twice as an employee at minimum wage placing her closer to middle class. Raise the minimum wage to $15, would that mean that the $20 per hour employee goes up to $30? Most likely not. Do they stay at $20? if they stay at $20, then they’ll be closer to lower class income than before and they wouldn’t be middle class anymore.

    Milton Friedman explains it better than me:

  • InklingBooks

    Ryan, you’re making a serious mistake. You’re assuming that these liberal politicians, journalists, and activists actually care about the poor. They don’t. They’re not interesting in waiting for the consequences of these policies. The more people out of work, they more votes they get independent of their honesty or competence. That is what this is all about.

    You see that in California. Given the huge difference in living costs between San Francisco and the state’s rural regions, a state-wide $15 per hour minimum wage makes no sense. Or, more accurately, makes no sense if you can about people having a job they can live on rather than being out of work and making nothing. If you want angry, out-of-work voters, that move makes excellent sense though. It means one of the country’s worst-governed states can remain one of the worst.

    You already see the impact of these laws. In cities, fast-food will replace workers with order-and-pay kiosks. That’s incredibly easy. Agricultural California has already shifted to almond growing, in part because it can be highly mechanized.

    You might also try getting to know people living on little or no money. Talk to people on the street without getting hung up on money. Volunteer at a homeless shelter or a food banks. You’ll get a totally different perspective on them than that fed to you by the television news or self-serving politicians.

  • Vizzini

    I’m not an economist. I struggle to understand articles about economic changes…

    Call me crazy, but maybe the correct order of things isn’t
    .
    1. Write article about economics
    2. Learn something about economics.

    Just maybe, possibly, it should be the other way around.
    (Then again, that never stopped Paul Krugman!)

  • 15 $ ? what the hell. Very low..

  • kwo

    How does any minimum wage help those that are already unemployed, such as the homeless?

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