Minimum Wage Research Paper

Payal Kumari
English 104.31
12/11/2014

Increase In Minimum Wage
San Francisco is considered to be one of the most beautiful cities of the United States.
However, the exorbitant price of commodities and the cost of living in that city makes it hard for people to reside in that city. In order to provide a solution to this problem the government of San
Francisco has passed Proposition J which approves of the increase in minimum wage in the city from $10.75 to $15.00. However, this increase will not take place all at once. After passing, the measure was intended to bring up the minimum wage with respect to the following timeline:
$12.25 per hour by May 1, 2015,$13 per hour by July 2016, $14 per hour by July 2017 and $15 per hour by July 2018.. The effects of increase in minimum wage has always been a debatable issue. Supporters of this law believe that the increase in minimum wage will help the workers provide all the primary needs for living to their families
. Also, some of proponent economists claim that this increase will bring in a flow in the economy as people who earn more will spend more and in turn businesses will make more. On the other hand opponents argue that this will lead to issues like unemployment, increase in prices of goods and services, and it will impact businesses . I believe that the increase in minimum wage in San Francisco carries more negative effects on both workers and businesses, in a long nobody will really benefit from this law. According to the budget project we did in class we calculated that for a family of four with two parents, each working a minimum wage job, 40 hours a week, and two children the

total earnings of the house would be around $3400. Then we calculated the per month expenses of the family. We just took in consideration the basic necessities for living. According to price economic.com
(http://priceonomics.com/thesanfranciscorentexplosion/)
, we figured out that the average rent of a two bedroom apartment is about $2800. Then from Center for Nutrition
Policy and Promotion website ( http://www.cnpp.usda.gov/USDAFoodPlansCostofFood/report ) we found out that the average cost of food for serving a family of four is around $500 per month.
Then we added on the other necessary expenses like transportation and utilities and the monthly budget summed up to be $3870. As it can be seen that the expenses of the family are more than the income of the family.
With the increase to $15/hr it is true that the family would now be earning $4800 per month which might be enough to take care of the primary needs but again it is important to notice that it does not include the increased prices of commodities and services by
2018. Also in this budget we did not include the costs of secondary needs such as clothes, accessories, gadgets, insurance and many more other things that we require on daily basis which will still be unaffordable that amount of salary. Within a short time another raise would be required. It is true that the minimum wage workers will get a raise in their income which means they will make more but that will result in more competition. According to the San Francisco
Voters Information Guide (2014), the San Francisco Council of District Merchants Associations argues that “ Raising the minimum wage will encourage those from outside the city to compete with San Francisco workers thus, entry level workers will have a difficulty in finding employment”(p164). If the employer has to pay more money for the same amount of work that used to be get done at a lower rate then it is obvious that he/she will intend to hire a skillful,

erudite, well trained and an experienced candidate out of all. Only the overly qualified applicants will be chosen for the minimum wage positions, shoving the inexperienced and fresh candidates out of the race and stealing the chance from them to gain experience, skill and knowledge and to build some

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