BACKGROUNDER

Topic: Raising Minimum Wage

Jerrika Midkiff

INTRODUCTION:
The battle over minimum wage in the United States resolves around it being too high or not high
enough. The current minimum wage is $7.25 per hour, but states are assessing if they should
raise it all the way up to $15. Since the cost of living in the United States has risen considerably
in the past 20 years this debate has become more pressing than ever.

HISTORY:
Since the Fair Labor Standards Act of 1939, minimum wage has set a standard of the lowest
wage an employee can make. It started out at only $0.25 an hour, but currently sits at $7.25 an
hour after being raised 22 different times. This is the minimum employers can pay according to
the federal government, but states can set their own minimum wage. There are 30 different states
who have put in place a higher minimum wage raising the average to $7.57 an hour.
Minimum wage is not the only thing changing, cost of living and the value of a dollar have
fluctuated as well. The United States Department of Labor stated that in 1939, $0.25 had the
value of $3.98 in 2012. The cost of living is constantly rising, but the value of a dollar is
becoming less and less. Even buying a gallon of milk can seem overly expensive these days.

CALIFORNIA RAISED MINIMUM WAGE:

By 2022, California will have a $15 minimum wage standard due to legislation signed by
Governor Jerry Brown. He enacted this law only a few hours after New York signed their bill to
increase minimum wage to $15. Brown stated that he was forced into upping minimum wage to
avoid arguments in November. People in California were in full support of increasing their
already $10 minimum wage to $15 in their Fight for 15 campaign. Though Brown was in
support of raising minimum wage, he offered a concession that the governor was allowed to
delay the increase if there was an economic recession. Thus allowing him to delay the increase
till 2022. Morally and socially and politically, they (minimum wages) make every sense
because it binds the community together and makes sure that parents can take care of their kids
in a much more satisfactory way, Brown said.
The Sacramento Bee said that Hillary Clinton backed Cuomo, governor of New York, when he
signed the wage increase. Bernie Sanders also showed support of the increase when he stated he
was proud that the two biggest states increased minimum wage to a living wage of $15 an hour.
One stipulation of the New York bill is that small business will be allowed an extra year to phase
in the new minimum wage. This increase poses a threat to the 6 million workers currently
receiving minimum wage in California. Many Republicans have stated that businesses will have
to cut losses one way or another and laying people off might be the only option. There was no
support from Republicans in either houses when the legislation passed.

The LA Times Four Consequences of $15 Minimum Wage

According to the research LA Times has done, in the past when raising minimum wage, it has
had little negative effect on employment. Those increase have been fairly small though, we have
no idea what this size of an increase can do. "The minimum wage debate hints at the very
essence of who we are, how we function together and what we'll become," said well-known
economist Arthur Laffer.
1. It may increase unemployment among minority youth.
With many of the minimum wage jobs being held by teens, they will be effected the most by this
increase. Researchers believe that with this increase, many teens will be pushed aside by more
experienced workers. They believe that this will effect African American teens the most since
their unemployment is already at 25% which is vastly different compared to white youth at
13.5% and Latino youth at 15.6%.
2. Wage disparity within states will shrink.
Currently in California, the lower 10% of employees make $9.48 an hour while the top 10%
make $53.08 an hour. Over the past ten years the gap between top and bottom has increased from
$31.35 to $43.60. With raising the minimum wage to $15 an hour, the gap between the top and
bottom will decrease greatly. "Low-wage workers will achieve a much higher level than they
ever have, and that will reverse decades in which wages have been stagnant or falling at the
bottom of the distribution," said Michael Reich, chair of UC Berkeley's Institute for Research on
Labor and Employment. They believe that with this increase will help children too since their
parents will be able to parent better.
3. The red-state, blue-state divide could get worse.
Over the past few years, the divide between rich and poor states has shrunk, but with this new
increase, this divide will become prominent, again. The richer or Democratic states tend to be
able to support wage increases a lot better than the poor or Republican states. With this increase
being an extreme change, the poor states will struggle to support the change. Since laws and
regulations are changing vastly throughout the states, this change is only going to effect that
much more. This proved itself when Obama Care was put into place. Democratic states have
incorporated this a lot faster than Republican states who tend to be against it. "We are being ever
more sorted by class, by income, by education, by occupation and by political orientation,"
Richard Florida said.
4. More low-paying jobs will go underground.
Harry Holzer stated that more employees will be paid to do jobs off the books because of this
increase. He never believed that the campaign for $15 would ever actually go through, but that it
would help increase minimum wage to $10 or $12 an hour. With this change he believes that
lower skilled workers will lose most of their jobs and have to work underground to support their
families. If people end up getting paid off the books, taxes will take a hit because less people will
be filing taxes for their income.

Obama and Clintons Take on $15 Minimum Wage

In 2014, President Obama was called to action to increase minimum wage for workers under
federal contract to $10.10 an hour. When Obama signed this legislation he proposed that the
house consider raising minimum wage all together. He has also issued a change in who can
receive over time payment, now a higher paying salaries can log over time. Obama showed his
support for Fight for $15 when he stood next to fast-food worker Terrence Wise as he spoke
about how the low minimum wage has effected his family. Their story describes why we want
to have this summit; their story describes why workers need a voice, Obama said.
Though the fight is for $15 an hour President Obama and Democratic nominee Hillary Clinton
has stated that they support $12 an hour. They have never criticized $15 an hour, but believe $12
an hour is more reasonable. Obamas administration has suggested that they are worried that $15
an hour would be too much of a struggle for some states to support. The national minimum
wage is a floor, and it needs to be raised, Hillary said. But lets also remember that the cost of
living is different in Manhattan than in Little Rock and many other places. Both Obama and
Clinton are afraid that most employers will have to lay off many employees making this increase
become counteractive. But if they dont take action soon, the Fight for $15 could cause major
strikes and problems throughout the country.

Trumps Take on $15 Minimum Wage

Republican nominee Donald Trump is opposed to raising minimum wage, but for different
reasons. You have to have something you can live on. But what I 'm really looking to do is get
people great jobs so they make much more money than that, much more money than the $15
Trump said. His take on raising minimum wage is that people should be pushing to work at
higher paying jobs rather than settling on minimum wage jobs and trying to raise their pay.
People are getting too comfortable in their low-paying jobs and are not trying to improve
according to Trump. "We have to become competitive with the world. Our taxes are too high,
our wages are too high, everything is too high, he said. What's going to happen is now people
are going to start firing people. Trump said he is not totally against raising minimum wage, but
that law makers need to be cautious in how much they raise it.

Conclusion
The Fight for $15 has become a huge argument between Republicans and Democrats all over
the United States. Democrats being in support of it and Republicans being against. This issue has
been highlighted since the presidential elections will be taking place this November. President
Obama has stated that he supports a change in minimum wage, but not all the way to $15
because of the negative side-effects that it can cause. Trump, on the other hand, believes that we
should keep it the same and employees should work harder to receive higher paying salaries.
This debate will more than likely be settled by whoever wins the presidential election of 2016.
Federal minimum wage will probably be increased either way, but the question is just how much
exactly? The nation is currently divided on this topic and which party decides to push the hardest
is who will win the debate.