Purpose: to persuade my audience on the reasons and ideas as to why the minimum wage in the United States should remain constant and relevant to its current value.
Thesis: The minimum wage rising in the United States creates a major problem economically and will create more problems such as costs of living and inflation within our economy which is why the minimum wage should remain consistent with where it currently sits and not rise to a living wage of $15 or so per hour.
A. Attention Getter: $15 $15 is what you could be earning an hour at your part time summer job working as a lifeguard or a groundcrew worker. Sounds awesome right? Yeah, I agree that sounds awesome to go from making $8.75 an hour all the way up to $15. Too bad almost certainly youll lose your entry level job to someone with more experience than you or surprisingly more education than you have all for a minimum wage job. Thats the problem, it all sounds great on paper until you start figuring out the negatives.
B. Relevance to Audience: Without a doubt many of you if not all of you have had some sort of job whether its babysitting or working fast food during summers off of school. This discussion affects you, so those of you with car payments and student loans (all of us), an increase in the minimum wage will likely wipe out our jobs when we go back for the summer since this requires employers to cut jobs and hours for employees, leaving many of us lost on how to create income for ourselves to stay afloat and making us even broker college kids.
C. Credibility: I, like many of you have a summer job that requires 40 hours a week and then some at times all summer long. Making good money that helps me make it through the school year. I just like all of you know what its like to make money and wonder what its like to make real money one day, when we hear an increase of a wage, we often love this concept since its more money in our pockets when this really means majority of us will be out of a job come summer due to a major increase in competition at that wage and a lack of many positions due to cuts by an employer.
D. Thesis/Central Idea: The minimum wage is very appropriate at the amount it currently sits at and shouldnt drastically change otherwise we will see negative changes within our economy.
E. Preview: Not only do I play on saying the facts surrounding why the minimum wage should remain constant, Ill discuss the reasons and use examples of scenarios we could very likely see impact our economy long term related to an increase to a living wage
Transition: To give some insight Id like to start with what will happen from an employer aspect to us as job applicants and employees.
A. First Main Point- employers will screen for better applicants
1. A high spike in minimum wage will eliminate entry-level job opportunities for youth. Youth who arent able to find jobs will have to rely on family or the social welfare system, and reported by IZA world of labor, delayed entry into the labor market reduces the lifetime income stream of young unskilled workers and therefore increases difficulty to find job due to lack of previous work. As reported in an article published by the employment policies institute, nearly half of all minimum wage earners are teenagers or young people still living with their parents.
Teen suffer because theyve been priced out of the opportunity to work. Furthermore, proving that a higher wage for workers will undoubtedly result in younger workers and teens becoming vanished in the work force of those entry-level low wage jobs. One of the goals of the Fair Labor standards Act is to protect the educational opportunities for minors even though as the cost of labor rises, this makes it harder for employers and businesses to hire more people leaving teens and youth out of luck looking for jobs. From the same article by the employment articles institute gives the statistic that teen unemployment is three times the national unemployment rate when this is teens actually looking for jobs to apply for and get.
2. If the minimum wage gets to $15/hour, employers will be forced to screen for higher skilled and better qualified applicants due to a high cost and want a higher production output from their workers at a cost like that. Employers arent going to be able to have low standards for their minimum wage workers for even the lowest and easiest positions anymore, because now they will be forced to supplement the wage raise with even higher production to make up for costs and increase revenue. Majority of employers will actually see job competition more than ever for those entry level jobs you see teens working. For example a minimum wage McDonalds worker goes from being a job most dont want, but now many of those with lower income see an advantage and will compete to win these positions with that wage.
3. An implementation of a higher minimum wage will reduce the chance of those with special disabilities and social disorders to have minimum wage jobs to acquire more social and life skills. For example, at the local four seasons in town they often give people with some sort of social skill disability and people with autism or other forms of disabilities opportunities to mop up the floors and wash towels for some sort of wage most often low to give them more work experience and to grow social skills and make connections with people. Even if they want to work, which many of them do enjoy their work, the rise of wage in the U.S. will basically render it impossible for them to hold jobs when there are workers out there with more skill or can do tasks at a higher production rate.
Transition: Now that we have discussed the employer effects, we shall now discuss why we will see a reduction and elimination of jobs in the market
B. Second Main Point- employers reduction and elimination of jobs
1. Using kiosks and other robotic machines at fast food and other stores to eliminate jobs or reduce need of human interaction as a effective low cost alternative. A real idea we are already seeing being implemented at fast food and restaurants is the use of machines or kiosks to order your food and drinks at rather than reciting an order to a cashier to put into a computer.
As reported by Forbes, When McDonalds implements mobile kiosks into restaurants, they will win back nearly $2.7 billion in lost sales supplementing that with being able to have fewer staff on hand. Some other positions that could be filled by machines are manufacturing plants replacing workers with robotic arms, driving out many positions at a plant to make work more cost effective for employer. Employers will be left with no choice but to find other low cost or cost efficient alternatives to compensate for a minimum wage increase, which is to simply not hire more workers and replace those workers with machines and robotic mechanisms as much as possible due to the fact that many businesses will not be able to pay so many workers at that wage and still have good margins.
2. Minimum wage increase would hurt businesses and force companies to close An article within Forbes had real testimonials of business owners with remarks about their struggles, Nat Cutler who owned Abbotts Cellar in San Francisco stated when you force small businesses with little-to-no margins as it is to increase their wages by over 25 percent in a very short timeframe, how are they supposed to survive? This being after the implementation of a $15 minimum wage in the city of San Francisco.
Many of these small businesses rely on having lost cost workers to make profits if margins are already scarce, and an implementation of a substantially higher minimum wage forcibly makes these businesses nationwide close leaving hundreds of thousands of people out of work, increasing the unemployment rate just as we are trying to lower it as a goal by our government.
3. Would result in companies outsourcing many more jobs to countries where costs would be lower for Obviously businesses will be forced to find ways to improve margins with an implementation of a higher wage. The answer to that is to supplement that with outsourcing as much production as possible due to lower production costs in other countries like China and the Philippines. In an article published in the Foundation for economic education, Rassweiler states that the cost of parts alone of parts would go from around $190 to around $600 if made in the United States.
That would make the price you pay for an iPhone go from $1,000 to as much as $2,000. This only hurts us as consumers and workers, due to the fact that the companies that can barely make it work by making products here in America, will be forced to outsource since its not even worth it cost wise to even try to keep jobs and production here when they can make their products in another country where the cost of production and wage of people is half of the minimum wage here in America. Transition: to furthermore prove the point, Id like to discuss the negative economic effects that we will see in our society.
C. Third Main Point- the costly economic effect of a minimum wage increase
1. Costs of consumer goods would rise immediately one of the more obvious responses for the economy would be a higher cost for consumer goods across the board from grocery store items to electronics and other items. The cost of fast food alone COULD increase by ? the price according to James Sherk, from the heritage foundation and labor economics researcher. The cost of a spicy deluxe combo at chic fil a would rise from $6.79 to $8.49 at the minimum, $1.7 more due to the minimum wage increase. Thats substantially more money for everyone and all consumers across the board.
From the same study the cost of food for markup going from $7.25 to $15 is about a 200.07% increase. And based off a state given for every 10% increase we see a 0.02% market price increase on average for all consumer goods and services. If you match that with the fight for $15 wage consumers want and could possibly see, us as consumers can expect our items to rise approximately 4% overall. Though this is the average some products will see a larger percentage and many could see a much less rise in cost. For example a $100 pair of shoes would end up costing us $104, although not much for one item do that 10 times and your down $40 that could be in your pocket. In specific from the same article as previous we see a $10% rise in prices, but a 9.5% rise in fast-food restaurants due to costs like more staff and other accommodations you dont see within a fast-food chain.
2. Increasing the federal minimum wage would disproportionally harm the poorest areas of the united states Although this fix by increasing wages will solve the issue of poverty, some subgroups will see even more poverty with an increase, furthermore worsening our unemployment rate and creating an even further wage gap between those in poverty and those making living wages which to most starts at around $15 an hour removing them from poverty. An excerpt from the Washington examiner states The lost income associated with the hours reductions exceeds the gain associated with the net wage increase of 3.1 percent …. [W]e compute that the average low-wage employee was paid $1,897 per month.
The reduction in hours would cost the average employee $179 per month, while the wage increase would recoup only $54 of this loss, leaving a net loss of $125 per month (6.6 percent), which is sizable for a low-wage worker,” furthermore proving that there are still many complications and other ways employees offset these costs to protect margins or influence margins for their businesses.
3. Raising the minimum wage would decrease employee benefits and increase tax payments Transition: Now there are still oppositions and good points and reasons to be made for a higher minimum wage that we need to talk about.
a. Many people will argue that, obviously, increasing the minimum wage would reduce poverty across the board. – While somewhat true, we will see no improvement in the unemployment rate as a whole and may see a decrease if companies do in fact move towards outsourcing more and using machinery and robotic concept to replace workers. We see a reduction in poverty in areas with lower populations, with a higher density of jobs and opportunity for growth, compared to higher populated areas such as Cook county where work would still be limited, and we would see a large reduction in workforce due to employment cuts.
b. Raising the minimum wage would reduce crime. – According to a 2013 study by Boston College economists, increasing the minimum wage leads to reduced employment which leads to an increase in thefts, drug sales, and violent crime. Their results indicate that “crime will increase by 1.9 percentage points among 14-30-year-olds as the minimum wage increases.” [Researchers found that between 1977 and 2012 increases in the minimum wage resulted in “no significant change” in the rates of violent crime or property crime
Transition: In reality, just like any sort of controversial topic within society whether its minimum wage, abortion rights etc. we will constantly be hit with cause and effects and both sides seeking answers and solutions.
A. Thesis/Summary majority of us have had a job at some point in time and realize how much it sucks to make minimum wage, and most of why were here is to one day make real money and grow our incomes by becoming educated. I know that raising the minimum wage doesnt help any of us long term and has no long or short term positive effects that are substantial enough to implement it into society anytime soon.
B. Memorable Close Although we all have different backgrounds and have different viewpoints from each other, we all are in the same boat. We are here, at Illinois State to get away from living low income lives and educating ourselves to get the jobs we are working hard to get and earn the pay we deserved. Majority of us will remember and tell our kids our minimum wage first jobs, and how we got to where we are, but if we said we werent able to have jobs because of the competition and skill required, our story of success wont sound nearly as interesting or fun to tell later on.