The Costs & Consequences Of $15/Hour


What’s the big “hubbub” over raising the minimum wage to $15/hr? After all, the last time the minimum wage was raised was in 2009. The argument for increasing the minimum is to create a “livable wage” for those working at that level.

Given the amount of table pounding that has ensued after the current administration proposed increasing the minimum wage, you would have assumed that a vast majority of American workers were trapped at this horrifically low level of income. Let’s take a look at some numbers.

According to the April 2015, BLS report:

“In 2014, 77.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.7 percent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum.

Together, these 3.0 million workers with wages at or below the federal minimum made up 3.9 percent of all hourly-paid workers.”

Of those 3 million workers, who were at or below the Federal minimum wage, 48.2% of that group were aged 16-24.

Furthermore, the percentage of hourly paid workers earning the prevailing federal minimum wage or less declined from 4.3% in 2013 to 3.9% in 2014 and remains well below the 13.4% in 1979. 

Hmm…3 million workers at minimum wage with roughly half aged 16-24. Where would that group of individuals most likely be found?

Not surprisingly, they primarily are found in the fast food industry.

“So what? People working at restaurants need to make more money.”

Okay, let’s hike the minimum wage to $15/hr. That doesn’t sound like that big of a deal, right? Let’s do that math:

My son is just turning 16 in June and is going out to get his first job. He has no experience, no idea what “working”actually means, and it about to be the brunt of the cruel joke of Federal taxation when he sees his first paycheck.Let’s do the math of $15/hr assuming he works full-time this summer.

  • $15/hr X 40 hours per week = $600/week
  • $600/week x 4.3 weeks in a month = $2,580/month
  • $2580/month x 12 months = $30,960/year.
  • Let that soak in for a minute. We are talking paying $30,000 per year to a 16-year old to flip burgers.

    Governor Jerry Brown recently caved to Unions and passed legislation to hike the minimum wage in California to the magical level of $15. According to the Huffington Post, this will affect about 567,000 workers in Los Angeles. Here are those numbers (thanks to B. Eshelman for the math.)

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