This Month Only! >> $20 off and a FREE SHRM tote with your membership and code TOTE2018!
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
There’s a battle in many municipalities and cities across the country where elected officials and groups are advocating to
increase the minimum wage to $15 per hour.
On the surface, it sounds reasonable for workers to want to earn higher wages. There’s no question that living on the current minimum wage is hard—especially as prices keep increasing.
But while increased-minimum-wage proponents’ hearts may be in the right place, their heads are not. Wage controls backfire. They reduce job opportunities for those employees who need them most, exacerbating wage stagnation rather than alleviating it.
What proponents misunderstand is that the minimum wage is a training wage in jobs that gives young and low-skilled employees the skills necessary to quickly earn far more than the minimum wage.
And the evidence suggests that the vast majority of them do so: Two-thirds of minimum-wage employees earn a raise within their first year on the job, according to a study by economists at Miami and Florida State universities.
What do changes in the minimum wage, or starting wage, mean to cities and small businesses across the country? Many small businesses will be readjusting their operations to deal with the recent increases to the starting wage, which will impact employees as well as consumers in the following ways:
This is certainly not the intent of increasing the starting wage. Supporters of the $15 minimum wage often argue it will help the poor and stimulate economic activity. Opponents, however, argue such policies will actually hurt the poor by limiting job opportunities. How little or how much it will hurt or help is an issue being argued daily, but even the nonpartisan Congressional Budget Office agrees that at least some job loss is expected.
Several studies also show that industries with low profit margins, like restaurants and retail, are more likely to be hit the hardest. A June report from the investor rating service Moody's claims the minimum wage doesn't even have to go up to $15 an hour for negative effects to occur.
From rallies to media marketing campaigns, the “Fight for $15” movement has led efforts to raise the minimum wage to $15 per hour. Though claiming to be a grassroots worker movement, the group is highly influenced and funded by the Service Employees International Union (SEIU).
The SEIU has been criticized by some, like Worker Center Watch, for using the Fight for $15 protests as a way of bypassing labor laws to more easily unionize fast-food workers. Additionally, according to a report from the Center for Union Facts, a minimum-wage increase would benefit the SEIU directly while hurting nonunionized SEIU competitors.
There’s no question that stagnating wages are one of the great problems of our time. But legislating wages higher is not the answer because it means that many people will not have the opportunity to get a job at all, thus missing out on training that would allow them to quickly earn much more than the minimum wage.
Eric Oppenheim, SHRM-SCP, is a member of the SHRM Labor Relations Special Expertise Panel and is the executive vice president of Republic Foods Inc. in Rockville, Md. The views in this article do not necessarily reflect the position of SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
SHRM Annual Conference & Exposition
SHRM’s HR Vendor Directory contains over 10,000 companies