WageWatch Ibrief Blog



Guest Author:  Amy Klimek, VP HR ZipRecruiter


One of the biggest political and social debates currently going on is the debate of the minimum wage. A minimum wage is essentially the least amount that a business can pay an employee per hour. In the United States there is currently a minimum wage set at a federal level although there are states and cities that have a higher minimum wage above what the federal level is currently set at. On both sides of the argument there are passionate people who truly believe that they are correct in their beliefs. In looking at the issue, it is important to look at both sides of the argument in order to make an informed decision.

Pros of A Higher Minimum Wage

A higher minimum wage would generally benefit those of the lowest economic classes who make the least amount of money. Anyone who is currently making the federal minimum wage will have an extremely hard time supporting a family with children. Proponents of a higher minimum wage believe that this minimum should be raised in order to help out those who are struggling every month to pay the bills. 

In addition to this basic argument, proponents of a higher minimum wage believe that paying people more will stimulate the economy over the long term. Higher consumer spending has typically resulted in an overall boost of economic output in the United States. By following this argument, those that support a minimum wage hike say that businesses would actually benefit over the long run simply because consumers will have more money to spend on goods and services.

Finally, there is a moral argument to having a higher minimum wage that many people will bring up. Many proponents believe that the one percent should not control such a large percentage of the income and wealth in a country. By raising the minimum wage, the wealth in this country would be more evenly spread out among a larger group of people rather than being concentrated at the top. 

Cons of A Higher Minimum Wage

On the other side of the argument are those that believe the minimum wage should not be raised and in some cases done away with entirely. In economics, a price floor is something that increases supply and reduces demand for a product or service. If the minimum wage is raised, there will be a decrease in the need for workers. At a fast food restaurant for example, if a worker is suddenly paid twenty dollars an hour it now starts to make more business sense to start to outsource that job or position.

In reference to the moral argument made by many people who are in favor of raising the minimum wage, those that are against will say that it is not in fact moral to distribute wealth. Many people believe that this country was founded on the promise of free enterprise and that a business should have a choice on how much to pay their workers. In fact, many businesses wish that they could pay employees whatever they would like.

The final argument for those that are not in favor of a minimum wage increase is that the demand will be made again in the future. If the minimum wage is increased now, who is to say that the same will not happen again in a few years? In addition, those people that are now making more than the minimum wage will demand higher wages in response to legislation making the new minimum wage much higher than it is now. This will result in overall wage inflation which could increase the unemployment rate. At the end of the day, businesses only hire employees because they believe that employee can make the business more money than they are getting paid. If all employees are now two or three times more expensive, businesses may cut down on the total workers that they will employ.

Future of the Minimum Wage

The issue of what rate the minimum wage should be set at is an issue that is not going to go away any time soon. Politicians on both sides of the aisle have strong feelings on the subject, and in the upcoming elections at all levels the minimum wage will be a hot topic. It will be interesting to see over the next couple of election cycles just how much the minimum wage rate is debated. What is for certain is that there are passionate people on both sides of the aisle and the issue will not be going away any time soon.

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Amy Klimek is an experienced HR recruiter and VP of Human Resources for ZipRecruiter, she was employee #7 at Rent.com, where she first worked with ZipRecruiter’s founders. Her philosophy on human resources infuses the company culture: “To create an open, enriching environment by hiring the best, keeping the rules to a minimum and making it fun.” She’s married and has three active children to whom who she enjoys playing chauffeur.

This entry was posted on Wednesday, April 22nd, 2015 at 1:12 PM and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.