The Cost of a Livable Wage: The Minimum Wage Debate

America is a divided country full of divisive issues, with not many issues more divisive than the minimum wage. Some Americans believe that the minimum wage should be a livable wage and must be raised. While others believe that the minimum wage should not increase since any increase in the wage causes more harm than good. This debate is perfectly exemplified in the articles: “Why It’s the Perfect Time to Raise the Federal Minimum Wage” by Chris Lu, Former Deputy Secretary of Labor and Senior Fellow at the University of Virginia Miller Center, and “Hike in Minimum Wage Maximizes Hurt to Most Vulnerable” by William P. Hoar, author and John Birch Society scholar. Both Lu and Hoar believe something needs to be done to help address economic inequality in America, however, both differ in their belief that an increase in the minimum wage is the right way to address economic inequality.

In his article, “Why It’s the Perfect Time to Raise the Federal Minimum Wage”, Chris Lu argues that an increase in the minimum wage not only helps the lives of working class Americans but employers as well. Lu (2017) began his argument stating, “The federal minimum wage was last raised on July 24, 2009”. Since 2009, Lu (2017) says, the United States’ economy has “rebounded with the longest streak of job growth in history”. However, even with a prospering economy, millions of Americans are still working for the federal minimum wage of $7.25 an hour. If these Americans are working full time, their yearly salary amounts to a paltry $15,080; which “translates into declining living standards, reduced economic mobility, and a shrinking middle class” (Lu, 2017). This is completely unacceptable, with Lu (2017) proclaiming “A full-time job shouldn’t mean a life in poverty”.

While Lu was the Deputy Secretary of Labor traveling the country, he saw how higher wages not only benefited the lives of working-class Americans, but also the employers paying the higher wages. Lu gives &pizza as an example of an employer benefiting off of paying higher wages. &pizza began paying their employees $10.50 an hour, which &pizza’s chief executive claims resulted in “reduced employee turnover, increased productivity and improved customer service” (Lu, 2017). All the benefits &pizza gained by raising their wage easily outweighed the costs of paying their employees more. The benefits of paying a higher wage have been noted by other employers as well, with a 2016 survey stating that “80% of business executives across the country supported raising their state’s minimum wage” (Lu, 2017). However, Lu (2017) believes that “higher wages shouldn’t depend on the generosity or geography of one’s employer”. Instead the federal minimum wage should be raised to provide an “important lift to the 2.2 million Americans earning the federal minimum and help tens of millions who earn a few dollars above’ (Lu, 2017).

In his article, Chris Lu strived to create a strong argument for raising the minimum wage. He successfully incorporated facts, statistics, testimony from experts, and emotional appeals into his article, which strengthened his argument. However, he made some crucial errors in his article that significantly weakened his argument. First, Lu relied heavily on emotional appeals and his own thoughts; he would have been better basing his argument on more facts or expert opinions. Second, Lu incorporated a lot of politics into his article which weakened his credibility with his readers. Last, Lu neglected to show how the average worker benefits from these higher wages, instead it is implied workers benefit since businesses are benefiting. Simply put, Lu gave an argument that was weak and easily refutable.

In direct contrast to Chris Lu, William P. Hoar emphasized, in his article, “Hike in Minimum Wage Maximizes Hurt to Most Vulnerable”, that the minimum wage should not be increased since any increase negatively effects those it is trying to help. According to the Economic Policies Institute, “nearly half of all current minimum-wage earners are teenagers or youngsters still living with their parents” (Hoar, 2016). This age group needs work experience; yet with any minimum wage increase, explains Hoar (2016), “they are being priced out of the opportunities to gain experience and skills”; which are needed for higher paying jobs. Hoar gives New York raising their minimum wage to $15 as an example of this. New York Governor Andrew Como stated that “New York is showing the way forward on economic justice” (Hoar, 2016). However, according to Zack Hutchins, director of communications for the Business Council of New York State, by raising the minimum wage to $15 many New York “businesses will have to cut hours, hire and keep fewer employees, reduce benefits, increase prices, or close” (Hoar, 2016). Put simply, “making it more expensive to hire less-skilled workers is not a solution” (Hoar, 2016).

Nobel-Prize economist, Milton Freidman described the minimum wage debate best, saying: “The real tragedy of minimum-wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by high minimums are the most poverty-stricken” (Hoar, 2016). To help poor, young, low skilled Americans, Hoar recommends politicians to heed the advice of Professor Mark Perry, an American Enterprise Institute scholar, to not increase the minimum wage, but let employers pay a market wage to their employees. If employers are allowed to pay wages they see fit, low-skilled workers will have a better probability of being employed, since they can be paid what they are worth rather than what the government believes they should get paid.

In his article, William Hoar created a very strong argument against raising the minimum wage. He based his argument heavily on facts, statistics, expert opinions, and examples, which strengthened his argument tremendously. Hoar was also able to refute Lu’s claim that a minimum wage increase would help both businesses and employees through his example with New York and various expert opinions. However, Hoar fell victim to inserting politics into his article, much like Lu; which hurt his credibility. With all that said, Hoar created an argument that would be very difficult to refute.

Both Chris Lu and William Hoar presented valid arguments about whether or not increasing the minimum wage would be the best way to help solve the issue of economic inequality. However, William Hoar presented the better argument. While, Lu based his argument largely on his own thoughts, which made his argument weak; Hoar’s argument was based on statistics and expert opinions, which helped his credibility and made his argument difficult to refute. Hoar was also able to refute Lu’s stance, of the minimum wage being panacea, within his article, something Lu failed to do in his article. Overall, William Hoar’s argument against raising the wage was the stronger argument of the two.