How do we, as humans, insure the prosperity of other humans? Some would say that legislating a livable minimum wage is a step towards helping others help themselves. Recently the city of San Francisco has decided to gradually increase their minimum wage over the next three years from about $10 to $15 an hour.
A higher minimum wage can provide consumers with more money in the short term enabling them to purchase more but because wages have increased, prices will inevitably increase which will raise the cost of living. Instead of minimizing the disparity between the wealthy and the poor, we will be raising it up another tier. Although in theory a higher minimum wage can be a form of assistance towards the fight against poverty, in the long run it can have many ramifications.
Small businesses are at risk because many of them do not have the finances to provide a baseline pay of $15 an hour to all their employees. For example, a small bookstore in the Mission District of San Francisco, Borderlands Books, can either close or sell because they cannot afford to pay their five employees $15 an hour in addition to other expenses. Alan Beatts, the owner of Borderlands Books, stated that he and his employees “support the concept of a living wage in principal and [they] believe that it’s possible that the new law will be good for San Francisco…[but] Borderlands Books as it exists is not a financially viable business if subject to that minimum wage.”
The question that arises is whether or not the government should regulate minimum wage. Earlier this month on September 9th, 2015 Nationwide Mutual Insurance Corporation decided that they would increase their minimum wage over the next nine months to $15 an hour helping 900 employees, in order to reduce turnover and increase workplace morale. Nationwide, based in Ohio, is only required to pay their employees a minimum wage of $8 an hour, so is Nationwide practicing Corporate Social Responsibility? Unlike Borderlands Books, Nationwide is financially stable enough to increase their minimum wage. So should regulating minimum wage be left to businesses rather than the government? If left to businesses, those who are able to support a higher minimum wage should while other businesses focus on alternative ways to fight poverty.
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