The raise could increase pay for 5.6 million Californians by an average of 24 percent and would especially benefit minority groups who hold the majority of low-wage jobs.
Yasmin Fernandez works two jobs to make enough money to support herself as well as family in Mexico. After paying her expenses, she has only about $150 a month for herself. She calls the raise "heavenly," saying that she can now have money to treat herself every once in a while and even more money for her family.
Other urban cities such as Seattle and New York City have followed in California's footsteps in raising their wages. However, NYC bakery owner Joseph Sferrazza brings up a drawback to the plan: "The rent is so high, the profit margin is already so low, I don't see how we can make it work," says Sferrazza, who will eventually pay his workers $15 instead of the current $9. "You can only charge so much for a cookie."
Raising the wage may seem like a good idea in retrospect, but in reality, it may just cause a domino effect that leads to higher prices, rendering the raise useless. It could put more people out of jobs since stores or companies may be unable to support the number of workers they currently have, ironically hurting the people that the higher minimum wage is supposed to help. Small businesses, in particular, will have a hard time keeping up.
However, perhaps the scariest thing is that this wage jump is way larger than economists have tested in the past, making it difficult to predict what exactly will happen to the economy in the long run.
"I would go so far as to call this reckless," says David Neumark, a UC Irvine economics professor.
Thoughts? Was raising the minimum wage a good move?
Sources:
http://latino.foxnews.com/latino/money/2016/03/30/analysis-finds-raising-ca-minimum-wage-to-15-hour-would-cost-taxpayers-36b/
http://www.nytimes.com/aponline/2016/04/01/us/ap-us-minimum-wage.html?em_pos=large&emc=edit_nn_20160401&nl=morning-briefing&nlid=72521305
http://www.usnews.com/news/business/articles/2016-03-29/californias-15-hour-wage-could-help-workers-cost-jobs
However, perhaps the scariest thing is that this wage jump is way larger than economists have tested in the past, making it difficult to predict what exactly will happen to the economy in the long run.
"I would go so far as to call this reckless," says David Neumark, a UC Irvine economics professor.
Thoughts? Was raising the minimum wage a good move?
Sources:
http://latino.foxnews.com/latino/money/2016/03/30/analysis-finds-raising-ca-minimum-wage-to-15-hour-would-cost-taxpayers-36b/
http://www.nytimes.com/aponline/2016/04/01/us/ap-us-minimum-wage.html?em_pos=large&emc=edit_nn_20160401&nl=morning-briefing&nlid=72521305
http://www.usnews.com/news/business/articles/2016-03-29/californias-15-hour-wage-could-help-workers-cost-jobs
