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TU Global: Unsure of stance on increasing wages

16 February 2014 No Comments

In high school I had about three jobs: one dealing with landscaping and party rental supplies, one as a busboy at an Italian restaurant and one as a cook that I still go back to whenever I’m home from school. I made the $7.25 minimum wage (or just a bit over) for about three years and then got my first raise…to $8.05 when I was a senior in high school; a momentous occasion. This was probably resulted from my bosses realizing I was working so hard doing prep work and standing next to an oven making pizzas that was cranked to 500 degrees for eight hours that I was giving myself acne.

But regardless, even when I was making the bare minimum wage without getting tipped, I was satisfied. I was just happy that in this terrible economy I had been hypnotized to believe I lived in, I was able to find a steady job.

But then again, my parents were still paying for my skateboarding equipment and picking up the tab when I wanted to splurge on fast food after school. I wasn’t raising a family and trying to pay rent.

The new bill that Gov. Martin O’Malley has been pushing would raise the minimum wage from its current $7.25 to $10.10 in increments from now until 2016. And to be completely honest, I don’t know who to side with on this one

(big surprise).

This political stalemate has been reoccurring over the years and throughout the entire country. Regardless of the circumstances, you hear the same arguments from both sides. “If you work 40 plus hours a week, you should be able to pay your rent and put food on the table for your family.” Ok, sounds reasonable, I agree with that. But then, “If we raise the minimum wage not only am I going to have to cut my workers’ hours but I’m going to have to raise my prices!” Well shoot, that’s no good.

It seems like there should be some sort of compromised middle ground where for business owners, that threshold of having to make serious changes to stabilize their finances isn’t necessary but where people can also unanimously agree that such a wage is one that is livable. Here’s the only instance where I really have a definitive opinion on this issue: finding that threshold where both business and labor could be satisfied is where I think serious research should be done.

A study released this past week conducted by George Mason University economist Stephen Fuller estimated that increase of the minimum wage to $10 would eliminate approximately 11,052 jobs. The study also proposed that workers from nearby states would make the drive for higher paying jobs here but not spend the money in Maryland thus making the argument of boosting our economy

less valid.

Those who support the minimum wage increase don’t have as many think-tank backed studies with convincing numbers on their side. But they do possess more than a sliver of the moral high ground. You can’t argue with numbers. But the prospect of increased earnings resulting in more consumer spending is somewhat compelling. If the minimum wage is increased, business owners may see cutting jobs and raising prices as necessary but what if that increased wage resulted in

more business?

There is a promising compromise being worked on currently in the House and Senate that would raise the minimum to $9 instead of $10 but would offset that with an increased earned income tax credit. Here’s an instance where the numbers favor laborers: even without the slight wage increase, the higher earned income tax credit gives roughly $2,200 back to those making low-wages.

Doing so “does take some of the burden off of the private sector,” Senate Budget and Taxation Committee Chairman Ed Kasemeyer said to WBAL.

As major stakeholders in this issue, businesses and restaurants would prefer a reform of this caliber rather than a wage increase alone.

President Dave Norman of Davco Restaurants which owns over 150 Wendy’s explained to CBS Baltimore, “If you have a choice of going to a Wendy’s store in Maryland and paying more or going to a Wendy’s store in Delaware and paying less, where are you going to go?”

Probably to my refrigerator. But Dave has a point. Although…so do the hundreds of people who work for him.

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