Economics Discussion: Seattle Minimum Wage Debate Analysis

This discussion post analyzes the impact of Seattle's minimum wage increase to $15 per hour. The author argues that the policy has negatively affected the city's economy, particularly impacting restaurants by increasing operational costs, leading to reduced hiring, and higher food prices. The author believes that the minimum wage hike has led to increased unemployment among low-wage workers and reduced working hours for some, negating the intended benefits. The post also suggests that the policy disproportionately affects labor-intensive businesses and may encourage outsourcing. Overall, the author concludes that the cons of the minimum wage law outweigh its benefits, advocating for a more thorough analysis of the potential consequences before implementation. This is a student's contribution, and past papers and solved assignments are available on Desklib.

SHOULD SEATTLE HAVE RAISED
ITS MINIMUM WAGE?

Should Seattle Have Raised Its Minimum Wage?
Minimum wage rates are set by the state or countries to safeguard the interest of desperate
and low-wage income group. It ensures these workers are not exploited by the employers.
In 2013, three employees working at Seattle’s neighbourhood Ballard protested to increase
the minimum rate as according to them the minimum wage they were getting were not
sufficient to meet their basic needs. City Council raised the minimum wage rate to $15 an
hour for the companies having an employee population of more than 500. Therefore,
presently minimum wage for Seattle has been set to $16 and $15 for larger and smaller
employers respectively.
I don’t feel it has positively affected the society as a whole. Restaurants’ cost of running the
business has gone up due to hike in minimum wage. Earlier, most of the low wage jobs were
provided by the restaurants but now after the hike in minimum wage they have reduced their
hiring to save cost. Even they have raised the prices of food to cover their wage cost which
has negatively impacted the population who preferred eating out in the restaurants. Therefore,
I feel that it has increased the unemployment rate of low-wage workers, impacted the
customers of the restaurants and ultimately hampered the business of restaurants in Seattle.
Minimum wage rose to $15 per hour but I feel the scene is still the same or worst for low-
wage earners. There are employers who have reduced the working hours of these low-wage
employees so at the end of the day these wage earners are still getting the same amount to
earn their living. Rather after this hike I feel, business would prefer hiring experienced low-
wage workers as compared to an unexperienced guy who would take time and money to learn
and deliver the service. In the process the employers who failed to bear the cost of minimum
wage had to let go their low-wage employees. Therefore, it has restricted the entry of new
low-wage workers to the job market and earn their living. Also, there seems no improvement
in wages of the existent workers whose working hours has been reduced.
According to me, this step is good for capital-intensive industries who depends less on labour
but it’s a complete loss for those companies who are labour-intensive. This rise in minimum
wage might have increased their cost of labour. At the end, these companies may take the
decision of outsourcing labour from the place where cost of labour is cheap.
In my opinion Seattle should have properly analysed the pros and cons of increasing the
minimum wage rate before passing the minimum wage law as a whole. No doubt, this step
has improved the living of experienced workers but for unexperienced and low skilled
workers it became difficult to get a job. Even the business of restaurants who employs a large
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Should Seattle Have Raised Its Minimum Wage?
portion of low pay workers has got hurt due to this hike in minimum wage. Therefore,
according to me the cons of minimum wage laws outweighed its benefit.
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