Many college students work retail, summer camps and wait tables. They spend their precious free time working part-time minimum wage jobs that result in unsatisfying paychecks. As a college student, I’m accustomed to hearing my peers discuss their monotonous jobs, desperate to pay for their tuition, or just a night out.
But most college students aren’t struggling to pay their electricity bill, or winter boots for their kids. The real issue is that many single parents are struggling to make ends meet while working low-wage full-time jobs. According to the U.S. Census Bureau, there were 46.5 million people in poverty in 2012, or 15 percent of the population. A single parent working a full-time minimum wage job makes $15,080 annually, which would be above the poverty threshold for a single person, but way below for a family.
The recent State of the Union address brought to light the minimum wage debate when President Barack Obama called for a raise in the minimum wage from $7.25 to $10.10 per hour. For those low-income workers this could make the purchase of a child’s new winter coat or fresh vegetables for dinner possible.
However, there are economists who argue that the wage increase could have a detrimental affect on the economy through:
- An incentive to not hire new employees. Basically, this means that employers wouldn’t want to hire new employees because their wage rate is higher.
- Job loss. Small businesses may not be able to afford the increase in minimum wage and instead have to fire employees.
Others argue that this minimum wage increase would reduce poverty and benefit the economy through:
- An increase in economic activity. Some economists argue that because low-wage workers are more likely to immediately spend their incomes for basic necessities, economic growth will increase.
- Finally, some other economists argue that employers can take other actions in response to the wage increase, like reducing hours, cutting the pay of higher wage workers, increasing productivity, etc.
New York State increased their minimum wage to $8 dollars on Jan. 1, with a scheduled increase to $8.75 next year and then to $9 the year after. I have personally seen this immediate change in my friends’ income. Their income increased an average of 75 cents, from $7.25 to $8, which may not sound like much, but it makes a noticeable change in their paychecks.
Those who are working full-time minimum wage jobs struggle to support a family, so shouldn’t we raise the minimum wage and reduce poverty? However, small businesses may struggle with this increase. How can we solve this problem of poverty with minimal damage to employment?