California Lutheran University's Student Newspaper Since 1961

The Echo

California Lutheran University's Student Newspaper Since 1961

The Echo

California Lutheran University's Student Newspaper Since 1961

The Echo

Raising minimum wage will hurt the economy

There is a lot of discussion on whether raising the federal minimum wage is the correct move for the U.S.

It is possible that there will be more damage done to the economy by raising the minimum wage by $1.75.

While the federal minimum wage is set at one level, it is important to note that each state has varying minimum wages.

According to the Weekly Standard, Obama wants to raise the federal minimum wage fromย  $7.25 to $9 an hour, which he said would help familiesย  living in poverty who are currently making minimum wage.

For all the people in America who are living paycheck to paycheck, an increase in the federal minimum wage would seem to improve financial stability.

However, if the change affects the price of items and lowers the employment rate, then in reality it would not mean better stability.

โ€œAt this time, I am not sure it is wise to raise the minimum wage.ย  Economic growth in Q4 2012 was flat, as GDP increased by a paltry 0.1 percent.ย  Additionally, the labor market remains weak as unemployment is still above 7.5 percent,โ€ said Kirk Lesh, CLU economics professor.

Lesh gives good reasoning for not raising the minimum wage.

As a student, I wouldnโ€™t mind having the minimum wage increased. Most of the positions Iโ€™ve held, like other college students, start at minimum wage.

However, raising the minimum wage doesnโ€™t just change how much money you have in your pocket; it could create more permanent changes to the economy, which makes me believe this is a bad choice for the U.S.

Last year, a bill was introduced that would raise the federal minimum wage to $9.80.

According to the Employment Policies Institute, a group that advocates for employers, raising the minimum wage to $9.80 would cost 467,500 jobs.

โ€œIf the minimum wage increases, it could potentially damage a weak labor market.ย  It would be better if the administration waited until the economy was stronger.ย  This is not the time to be raising the minimum wage,โ€ said Lesh.

Sophomore Alethea Acasio is also unsure if this is the right thing to do.

โ€œBeing a business major, I understand theoretically how it will affect the economy. We all would like to have the extra money in our pockets, but is it worth more people losing jobs over it?โ€ said Acasio.

Based on a New York Times article in 2007, there was a federal minimum wage increase from $5.15 to the current $7.25.
A large increase has been done before, but it was at a different time in our economic history.

However, Matthew Zavala, a business administration major with an emphasis in management, thinks raising the minimum wage is a good idea.

โ€œRaising the minimum wage will help those who are already finding it hard to make ends meet,โ€ said Zavala. โ€œItโ€™s happened before, and this increase is nothing new.โ€

Zavala said that if we could handle it in 2007, we could deal with it again.

But with such a struggling economy, the question is, will it work this time?

This is what President Obama believes to be a solution to a large issue, but it wonโ€™t be that simple.

Raising the minimum wage could work out, but with such a large increase, it could affect the economy in a negative way and ultimately will not help anyone.

Veronica Manzo
Staff Writer
Published March 6, 2013

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