Minimum Wage and Racial Discrimination

I feel like I have been beating a dead horse by talking about the disaster that raising the minimum wage would bring to America. I have probably mentioned it in every other post on this blog. Here is a couple of past posts that have talked about minimum wage. Seriously just scroll through the blog. Anyway, in the post I will be presenting my usual arguments against the minimum wage. The difference will be however, that I will show how it actually affects the minorities both in race and sex. Minimum wage seems on the surface to be a simple issue of what the floor wage should be as set by the government. Recently, both New York and California have passed minimum wage laws. In New York, the NYC area will be at 15 dollars an hour in 2020 and upstate New York will follow that in 2022. The law implements a slow increase over the years. Similarly in California, the minimum wage will be increasing to 15 dollars an hour. One city in California has already instituted a 15 dollar an hour wage. The only other place in the US that currently has a 15 dollar minimum wage is Seattle, Washington.

The results of these wage increases by the government will have some damaging effects on both businesses and job seekers and holders alike. I recently did some research and found an study by the CBO or Congressional Budget Office. A non-partisan research office that works with economics and budgets. This article published in February of 2014 was done on the effects of raising minimum wage to just 9 and 10.10 an hour respectively. It argues exactly as I do that increasing minimum wage increases unemployment and increases the value of goods while decreasing spending power and decreasing job growth. Just imagine at 10.10 the effects can be pretty devastating. So imagine the damage done by a increase of nearly  8 dollars. (Federal Minimum wage is 7.25)

The usual narrative of support for such increases is that it would help poorer workers and put more money in the pockets of taxpayers and less for profits of businesses. These are false assumptions. Minimum wage actually hurts those who it intends to help. Businesses will make profits regardless of minimum wage. If wages are artificially raised too high either they will move out of the country or go out of business. What is the point of making no profits? Again it hurts those workers who are the poorest and the least qualified for a job. It hurts immigrants, poor minorities, high school students, college students, and post-graduates. The reason why it hurts these groups of the people because a business when faced with a wage increase will cut the most unnecessary workers first. That means those with the least experience and skills. For example, at Mcdonald’s they have invested significantly in Kiosk and automated cashiers. These automated cashiers can replace actual human cashiers in efficiency in the short term and in paid wages in the long term.

The broadest support for minimum wage at 15 dollars is by liberal minorities and fast food workers, lower level workers who might be immigrants or new job seekers out of highschool or college. These are the people of who will be pushed out by a higher minimum wage. Businesses may cut these high cost, low skill workers and instead pay someone with more experience and more skills. A higher minimum wage also increases competition for jobs even low or no skill jobs. So the more experienced and more skill workers will win out jobs over minority immigrants and students.

Many people don’t realize that minimum wage actually perpetuates racial discrimination. The sad part is that politicians especially democrats like Bernie Sanders or Hillary Clinton gain supporters in these groups by advocating a 15 dollar wage. This is why you should always be informed about the policies a particular candidate supports. This is not to bash democrats because Republicans use similar tactics on other issues. (Topic for another day) I think that a big part of the perceived and real racial discrimination comes at an socioeconomic level. Even though, that statistically there are more white people on welfare than there are colored people. Racial discrimination is a tough issue to fix because of its deeply ingrained roots in our society. Individually we all have a responsibility to treat everyone with the same respect. I believe that if we can stop hurting minority races with harmful economic policies like artificially high wages and higher taxes that we can eliminate some of the disadvantages.

At the same time, I have hope for the future because the acceptance of every race as normal and equal has become more common in the newer generations. I believe starting in people born after 1980 there has a been fundamental change in how races are viewed. The acceptance of gay marriage is a part of this movement towards equality for everyone. I also think that North Carolina is wrong for trying regulate transgender people in bathrooms. There is no legal or real grounds for any legislation like that. If you can share a bathroom with sex offenders and rapist then I think it will be okay if a few transgender people are in there.

My point in this post that minimum wage is a part of the problem not the solution. So please try to be informed about issues because sometimes the effects can be more negative than positive. Just remember that countries like Switzerland have no minimum wage yet they are paid very well. We don’t need the government to help us get better wages. Get better education and skills then the money will flow. Thanks for reading!

 

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2 thoughts on “Minimum Wage and Racial Discrimination

  1. Pingback: Points of View, Hate vs. Criticism – Garrett's Experience's Blog

  2. Pingback: Economic Series Part 1: To Raise or not to Raise the Minimum Wage? – Garrett's Life Experience's Blog

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