The Living Wage is a Bad Idea

Also when I have names and a year in parenthesis, that is referring to a study done on the Minimum/Living Wage. So now onto the case. The Living Wage has noble intentions, helping those who are the worst of in society, by giving them more money, but the consequences of increased unemployment, decreased hours, and price hikes attached to is implementation, hurt those the living wage tries to help. 1. One of the biggest effects of the Living Wage is increased unemployment. For a second let's think about why we employ workers. It is obviously because they can turn a profit for the company. However forcing a company to increase the wage of an individual, who hasn't increased in productivity will create a loss for the company, who in turn will let the worker go. Jeffrey Clemens and Michael Wither for the National Bureau of Economic Research, did such a study, and concluded that 1.4 million jobs were lost to the last hike in the minimum wage. (. http://www.nber.org...), hurting those that the Living Wage intents to help. The Living Wage can't help a worker unless he holds a job. "In Canada, more than a dozen studies have examined the impact of increases in provincial minimum wages. Based on those findings, a 10% increase in the minimum wage decreases employment for young workers (ages 15"24) by an average of three to six percent (Godin and Veldhuis, 2009). For young workers most affected"those earning between the current minimum wage and the proposed higher wage"the impact is more acute, with job losses of up to 20% (Campolieti et al. , 2005). The first city in the US, Baltimore in 1993 pushed for a living wage, and saw their Econ. crash, with 58,000 jobs disappearing, even as the rest of Maryland added 120,000 jobs and other cities across the country prospered. 1b. Additionally, the Living Wage would create a permanent set of unemployed workers. The only reason why companies higher workers is because the workers can create a profit. For those who cannot create more that $15 an hour while working will be laid of from their current job, and not hired again, as no company will higher a person who would amount as a loss to them. Companies would also get rid of certain positions, such as waiters, who are a connivance to the customer, not a necessity, and replace them with new systems, such as automation, or in the case of the waiter, asking the customer to pick up their food . 2. Evidence shows that employers not only respond to a minimum wage floor by decreasing the number of jobs, but they also cut back on hours (Couch and Wittenburg, 2001), provide less on-the-job training and other non-wage benefits (Neumark and Wascher, 2001; Marks, 2011), and give employment priority to their most productive and experienced workers (Neumark and Wascher, 1995). In other words, the pay employees less, by allowing them to work less hours, and force them to be more productive by not allowing times for breaks/lunch, leading to employees not being any better of than before. It also causes many people just entering the work force to lose valuable time and experience on the job, as the remaining jobs are given to workers with experience. 3. There is also a growing body of evidence that shows minimum wage increases actually do little to help households in need. One recent study examined increases in the minimum wage across Canadian provinces from 1981 to 2004 and actually found that raising the minimum wage was associated with a four- to six-percent increase in the percentage of families living below Statistics Canada"s low income cut-off (LICO) line (see Sen et al. , 2011). In a 2012 study by renowned Canadian minimum-wage researchers, Michele Campolieti, Morley Gunderson, and Byron Lee, the authors analyzed provincial data from 1997 to 2007 and found that raising the minimum wage had no statistically discernible impact on measures of relative poverty including LICO (Campolieti et al. , 2012). " (. https://www.fraserinstitute.org...) 4. The Living Wage also increases prices, which in turn decreases consumer spending. Because less money is flowing into companies, they will have a harder time keeping workers, and fire the least productive workers, those who are on the minimum wage After a mere 14% rise in minimum wage in San Francisco, Chippotle raised its prices 14%. What would happen if we were to push a living wage through? The local cost of living would go up, with companies charging more for their services, and housing prices for minimum wage workers increasing. 5. Additionally, under the assumption that Living Wages don't have any harm to the economy, it removes in the incentive to try to climb the Socio-Economic Ladder. If people are comfortable as a burger flipper, why bother trying to move up into management?