Raising Minimum Wage Can Be Dangerous

Thesis: Raising minimum wage in the fast-food industry can have negative effects on the society.

The slogan “fight for $15” has been in recent minds of people in the food and beverage industry. In a WSJ article, it reported that the union-packed Tax day rally took on the streets to demand salaries to be increased by at least $1 more than the current minimum wage. While I often sympathize with the humble fast-food worker and thinks they should be given more credit, raising the minimum wage can have a negative effect on society.

The most direct disadvantage of raising the minimum wage is business owners will start letting workers go. There have been reports that show how a boost in minimum wage does not increase employment, but rather add on to the cost of business owners. Currently, McDonald’s is not having the best quarter in terms of sales. With this additional pressure, I am afraid many franchise owners will start to run out of business which leads to more unemployment. Thus, a minimum wage increase can lead to unemployment.

Another effect of increasing the minimum wage in the fast-food industry is it promotes careers in being a fast-food worker. The value that a cashier or line cook in a fast food restaurant is not significant in a social standpoint. The wage increase will promote more people to stay in this line of work since their salary is able to provide them a good standard of living. Less people will pursue more meaningful jobs like doctors or firefighters since they can make a decent living by doing routine work. A fast food cashier job is not meant for people to make a career out of it, but a stepping stone in their journey. If a position that requires a bare minimum of skill and education can make the same as a administrative assistant, they are less inclined to leave that position to pursue something else.

I do understand that many workers are not able to have a good standard of living. I also sympathize those who works hard all day to try to provide a meal for their children. However, I do not believe asking the government for a higher minimum wage is a solution. A salary should not be based on what the employee needs, but by the amount of value they provide. In a societal standpoint, a fast food worker provides very little value. Thus, their salary should reflect upon that. Not only will this push them to look for a better job, it will create a better life for them in the long run.

4 thoughts on “Raising Minimum Wage Can Be Dangerous

  1. Matthew Hillebrand

    I feel like you outlined the arguments very well. Yes, raising the minimum wage would increase the quality of life for many, but it could destroy a ton of business. The damage caused by raising the minimum wage like this could be a drastic problem and hurt in the long run.

  2. Justin Lee

    I believe there should be a study about consumer-business ratio.
    For example, in city of Seoul Rep. of Korea, for every 10 people, there is one fried chicken restaurant. If minimum wage stays as economy grows (which is happening), then we will see cases like Korea where people are jumping in business without knowing the serious nature of it.

    Also, increase in minimum wage does not hurt the economy in a long run (10-20 years horizon). I don’t have to argue the advantage of consumer side when it comes to minimum wage (increase in consumption). In supply side, increase in wage equals to increase in quality and productivity. Also, by the virtue of nature, it will rule out the business that are not suited for competition. The destruction of business is not always a bad thing.

  3. Jaewon Lee

    Yes I agree with you. If there is good thing about raising minimum wage, there is also negative factor. Before any policy is taken into effect, there should be a consensus whether raising or leaving the minimum wage as it is has greater benefits.

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