New developments in the debate of minimum wage increase have revealed themselves and this time it’s the whole state of California to become apart of this movement. I have discussed in one of my previous posts about the predicted advantages and disadvantages of hiking up the minimum wage. As I previously reported, San Francisco and Los Angeles were among the cities to be outlining plans to drastically increase the minimum wage over the next few years. San Francisco was one of the cities to pioneer the way for minimum wage increase as citizens voted in Proposition J in 2014 which will bring it up to $15.00 in two years. But now, in only six more years, the whole state of California will have a minimum wage of $15.00.
The Governor of California, Jerry Brown signed the law only a few days ago and it wasn’t an easy decision to make. Brown was reported as saying that raising the minimum wage “may not make sense” economically. The opposition makes the point that people working minimum wage jobs will make more money, but this will cause businesses (especially small businesses) to cut back on employment. The huge concern is how minimum wage is going to affect unemployment. But Brown is also concerned with the notion that minimum wage increases “morally and socially” make sense. It doesn’t help if minimum wage employees are making a wage that they can’t live on. Employee well being, which affects work efficiency, is at stake with low minimum wage. Where to set the minimum wage at is a tough question and Brown made a decision that he thought was right.
But one question I want to ask is: for what reason did this minimum wage movement come from? It seems as if in the last five or six years cities and organization have begun to get behind the notion of minimum wage increase. Fusion.net traces the origin of New York’s minimum wage increase to 2012 when various worker’s organizations were looking into education and housing issues with the poor. They found that workers in the fast-food industry were not making enough money, which was the reason for these issues. But if you go back even further one reason that many of the poor in cities are now working in the service industry is because manufacturing companies have moved out of the city. Instead of working a manufacturing job where they can learn a skill that they can use to further a career, the poor in the city are forced to work dead end jobs. Many of these jobs pay minimum wage and provide little hope to move up.
This is just one possible reason for the movement that has cities raising wages and has people in this debate. But there could be other reasons leading to this problem, which continues to fuel the economic debate surrounding minimum wage.