As a student and part-time worker, the idea of making $15 an hour sounds pretty good, until I take a step back and look at the potential impact that a $15 minimum wage would have.
Another election year compels politicians to the discuss whether or not to raise the federal minimum wage. Democratic presidential nominee Hillary Clinton has embraced the most progressive minimum wage hike, $15 an hour. Republican nominee Donald Trump has said he would like the states to raise their minimum wages, but he would also support raising the federal minimum wage to $10.
Originally, there was the push for a $10 minimum wage which has since been bumped up to $15. Some states and cities around the country have since passed legislation raising their minimum wages to $15 an hour.
In 2013, New York State approved increasing the minimum wage from $7.25 to $9.75 an hour. In 2015, the legislature raised the minimum wage to $15 an hour.
Seattle’s minimum wage is currently $15 an hour. Progressives point to the city’s lower unemployment rate to prove that the minimum wage does not have an adverse impact on the economy. However, the unemployment rate may not tell the whole story. There may be more workers, but they’re not working as many hours.
In March 2014, Starbucks CEO Howard Schultz told CNN Money that Starbucks may not be able to pay employees more than $10.10 an hour without making employees pick and choose which benefits they receive.
If the minimum wage was raised to $15, employers would have to find ways to compensate for the new minimum wage and the Affordable Care Act’s employer mandate. Staples has been the subject of several news stories, noting that the office supply store cut employees hours to less than 30 hours a week, often to around 20 hours, to avoid the mandate.
In my final months working at Staples, I distinctly remember hearing that corporate was pushing to have smaller stores with less staff and more kiosks. There have been several reports that corporations are looking to replace employees with kiosks.
I will admit that a federal minimum wage of $7.25 an hour does need to be updated to match the cost of living. Not all millennials are bums living in their parents’ basement playing video games. Many are in hard situations living on their own, going to college, and working one or more jobs just to get by — and they could use a break.
Keep in mind that the minimum wage is just that, the least employers are required to pay. Having a such a high minimum will decrease the frequency of raises. Instead of the minimum wage, it could very well become the maximum wage.
Unemployment may decrease, but the number of employees working 30 hours a week will plummet. Combined with the Affordable Care Act’s mandate a higher minimum wage would give employers an even greater incentive to cut hours.
The idea of making more money is appealing to me, but the minimum wage probably would not put more money in my pocket. And, why would I want to give companies even more reasons to replace me with a kiosk?