Minimum Wage Should Not Be Raised Essay

Student’s Name
Instructor’s Name
Class Subject
Date
Should Texas Raise the Minimum Wage to $15
The debate surrounding minimum wages in the United States has been raging with both sides of the camp providing empirical evidence to support their positions. Even with the contention surrounding the impact of the minimum wage policy, there are some states that have already passed ordinances increasing the labor price ceiling. In Texas, however, the minimum wage has remained at $7.25 for seven years, but there have been increased calls to raise it to $15, but to no avail (Ricke). Proponents of a minimum wage increase rely on a tired political line that Texans will be doomed to live in abject poverty if the wage is not increased. It has also been peddled that the set $7.25 minimum wage is a poverty wage since Texans who are employed and work full-time under this wage can qualify for food stamps benefits. Both the pro and anti-minimum wage camps’ debates can be misconstrued to be a religious belief where each believes their side is right and the other is wrong (Smith). Nonetheless, even with these disagreements, there are still valid points and evidence that can be raised against increasing the minimum wage. This essay opines that increasing Texas’ minimum wage to $15 would be a move in the wrong direction.
Recent studies which have investigated minimum wage increases in other cities have resulted in negative outcomes. Reich et al. looked at Seattle’s minimum wage increase and observed that in the first year of the wage hike there was minimal change in the employment level (18). However, in the second year of its implementation, there was a drastic decrease in the number of hours clocked in by the lowest paid restaurant employees (Reich et al. 19). Another preliminary study looking at the effects of minimum wage hikes in California found an even greater impact of a wage increase on employment rates. Their investigation of the service industry concluded that the wage hike led to a diminished employment rate of about 10 percent (Leamer et al. 18).
The studies above highlight that the labor market is not as different as other markets since it also negotiates prices. Consequently, applying minimum wage controls removes the power from employers and workers and centralizes it in government. Economists believe, although not in consensus, that the effect of price controls is mostly negative. For instance, gas price controls in the 1970’s created a shortage of supply and long lines. Instead, of initiating research that can provide a convincing answer, politics gets in the way and promotes the fallacy surrounding minimum wages.
Simple economics dictates that the labor demand curve is downward sloping, similar to other markets. This implies that employees are most likely going to hire less if and when the wages increase. Consequently, setting a minimum wage that does not match the market wage will result in increased job losses. Moreover, it creates a situation whereby unskilled individuals, who would have otherwise taken the job below the minimum wage rate, remain unemployed for long periods, and this pushes them to rely on family or the taxpayer. Minimum wage also leads to more power be...