Open any generic college ‘Intro to Economics’ textbook and the first problem will deal with tackling minimum wage. Will raising the minimum wage hurt the free market? What’s the right minimum wage? And what’s the fairest way for the world’s largest economy to deal with it? This debate has dragged on for decades, both nationally and statewide, but may be coming to a head in Massachusetts this year.
Starting Jan. 1, 13 states raised their minimum wage, and an additional 22 — including Massachusetts — are considering it this year. In November 2013, Massachusetts passed a bill in the senate that would gradually increase minimum wage from $8 to $11 by 2015 and then adjust for inflation. But the house still hasn’t tackled the issue.
College students, like us, are often stereotyped as the ones taking low wage jobs in retail or food services for extra spending money. But, the majority of those earning minimum wage are people over the age of 25, according to the Bureau of Labor Statistics, and about 26 percent have children. With costs rising and the federal minimum wage at only $7.25, many of these workers cannot afford rent or groceries.
Minimum wage should be increased, but it should be a realistic increase to match inflation without crippling small businesses. State-by-state the cost of living fluctuates and minimum wage must reflect that standard. People need live on these funds, while still striving for better job opportunities with better pay. And businesses need to balance payroll without sacrificing service for a higher minimum wage they cannot afford.
The solution is not simple, and will probably dominate Intro to Economics classes for years to come. But, states need to handle this issue themselves, with some government oversight, just as Massachusetts is doing. While the state has one of the highest minimum wages in the country, the issue has gained momentum and the bill is likely to pass. It stands to see if the raise will drive businesses out of the state to seek cheaper payrolls as opponents fear.