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Editorial | No winner in minimum wage debate, students must stay aware

By Editorial Board
On February 21, 2014

A few weeks ago, via his State of the Union address, President Obama introduced us to a proposal to raise the minimum wage to $10.10. The fate of the bill will be decided in 2016 and would increase today's federal minimum wage by $2.85, or roughly 72 percent. Supporters of the proposal, mostly Democrats, argue the raise would bring 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week. And the Republicans? According to a recent New York Times article, their disapproval stems from the estimated 500,000 workers that will be unemployed by May 2016. Republicans contend the policy will be a job-killer, while Democrats assert it will help alleviate poverty. Economists say both might be right.

The Board knows many college students are working minimum wage jobs right now. A jump in hourly wage wouldn't be a bad thing for a lot of us-more textbook money or trips to Kenwood Towne Centre wouldn't be all that bad. But there is a dark side to this hike in minimum wage that wouldn't be so fun.

If you are, or ever were, a server, you know the importance of gratuity. Though this minimum wage proposal would probably have a big impact on a waiter's weekly paycheck, their pockets may be emptier than before. The food and dining industry has always aggressively opposed wage increases. In 19 states, waiters make $2.13 per hour plus tips. This proposed bill would most likely give waitresses a higher paychecks but their employers could possibly give them less hours or customers could tip less knowing they're servers are making more than they used to. Again, this bill won't even have the possibility of going into effect until 2016. But it is something to think about, especially if your wage relies heavily on gratuity.

Another reason the Editorial Board wants to bring your attention to the federal wage increase is the fact that a lot of us will be entering the workforce in a few years (or months).

Tuesday, The Congressional Budget Office (CBO) released a report that found lifting the minimum wage would have a complicated effect on the labor market, acting as a boon and a burden for businesses and workers.

According to the New York Times article, "Raising the minimum wage would also make hiring low-wage workers more expensive relative to other investments, like new machinery. Businesses might then reduce their use of low-wage workers and shift their spending toward other things, like automated systems."

Fortunately for us, we're on our way to receiving a credible college degree, ideally lifting us out of the group of workers that would suffer from this minimum wage increase. But if employers really are unable to invest as much in human capital come this new proposal, would more and more jobs be at stake? As college graduates relying on an abundant job market, that is one question all of us should be asking.


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