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The Official Student Paper of Riverside Poly High School

Tipping the Scales

Mar 11, 2014

WORK: The California legislature will raise the minimum wage to ten dollars an hour by 2016 despite economic concerns.

by Valeria Gutierrez, Staff Writer

When we are children, we breeze through life safe in the knowledge that our parents will support us. Every object from stores is bought not with money but with hugs and kisses given to our parents. But as we get older, we realize that this illusion cannot last forever. Our parents begin to place limits on what we receive from our long lists of wants and “essential” luxuries. When we become teenagers, we find jobs to earn money and gain real-world experience. Once we are employed, parents—for the most part—treat us like adults with the freedom to buy what we like, when we like. We can choose to spend our money or invest it.

Today, there is a constant struggle with unemployment and low wages among the middle and lower classes. Workers continuously push the idea that higher wages are required to feed families. In response, California’s legislature passed a bill to raise the minimum wage to ten dollars an hour by the end of the year 2016. By raising the minimum wage, the Los Angeles Times estimated that an extra 24 million dollars will be given to families in need. If the minimum wage is raised, it is estimated that about 900,000 Americans nationwide will overcome poverty, causing a 16.5 million dollar increase that will eventually “end income inequality,” according to proponents of the bill. Income inequality? What an unrealistic term to use in America’s capitalistic economy. Only the immediate benefits of an increase in the minimum wage are considered, leaving out the fact that this new bill will kill jobs and raise the cost of living.

It does not matter whether a business is big or small; no company will want to keep the same number of employees if more money flows out to the workers. Although a majority of companies may want to help and support the cause, many new businesses will not be able to afford such a change. If Congress were to pass the proposed bill to increase the federal minimum wage to ten dollars, around 500,000 jobs would be lost, according to CNN. The two dollar and fifty cent increase from the current federal minimum wage could easily lift hundreds of families above the poverty line, but it would do so at the risk that their neighbors could easily lose their jobs. Workers are stuck between a rock and a hard place; either they keep their current wages and maintain their job security, or they gamble losing their jobs for the chance to earn higher wages.

Let’s say that Congress agrees on this one bill and

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allows the federal minimum wage to rise. If it passes, inflation will escalate as businesses expect these people and the so-called middle class to spend more money than before. Due to the new wages, even corporations not in search of extra cash will be forced to hike prices. Although some of the workers who keep their jobs during the minimum wage increase may choose to invest their savings, others will lavishly spend it. Consequently, the cost of living will continue to grow proportionally to the worker’s pay, essentially making the higher minimum wage useless since it only decreases the value of a dollar.

Although advocates for a new federal minimum wage claim that higher/lower unemployment and higher prices are uncertain, a few of the more costly states such as California prove them wrong. California is the sixth most expensive state in the nation and will move up even more on the charts because of this new bill. Supporters of raising the minimum wage in California claim that the current wage rate is not enough to keep up with the skyrocketing gas prices, yet the state of Wyoming is tied for the lowest minimum wage and cheapest gas prices.

While the future of such bills is uncertain, Americans must understand that economics is a study of patterns. Instead of stuffing our faces into unpredictable bags of money, we should take a step back and consider all possible outcomes. In these hard times, people settle for lesser jobs and as a result find it increasingly hard to support families with jobs that a 16-year-old can accomplish. Minimum wage workers should not expect to earn as much money as college graduates in their high school-level jobs.

Increasing the level of education is the best way to raise Americans above the poverty line. Instead of raising prices and spending money the government does not have, Congress needs to focus on helping individuals gain diplomas to make them happy and financially stable for years to come, not just for the week.

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