Thinking that increasing the minimum wage will make everybody in a workplace happy is nothing but a myth. In fact, it could even drive employees to quit their jobs.
Recent studies have shown that those who have been serving in a company for quite some time already find it unfair when those who are just new in the organization are given the same rate of wage increase.
The results of the surveys conducted show that there's strong evidence that peer comparisons matter. "Workers were much more likely to quit when their peers received bigger raises because the peers were just above a pay-step threshold," says the study.
Reason.com also enumerates nine reasons why raising the minimum wage is not a good idea, after all.
1. America is a big country. The cost of living, particularly for housing, vary from state to state. If the purpose for an increase is to provide "living wage," then why should it be the same for both low-cost areas (like Oklahoma or Texas) and high-cost areas (such as Manhattan or San Francisco)?
2. Twenty states and the District of Colombia are already taking care of it by having wages higher than the present federal minimum of $7.25 per hour.
3. Private and free markets have likewise taken care of it. Entry level or low-skill positions are paid higher than the minimum wage.
4. To consider it as an anti-poverty tool is quite blunt. Many minimum wage earners are second or third- job holders in households with other income.
5. There's no certainty that it is constitutional, as a Supreme Court opinion points out that it is a violation of the constitutional guarantee of freedom of contract.
6. The freedom of contract is a natural right, even if the Constitution does not guarantee it. President Kennedy, in one of his inaugural addresses, said that, "the rights of man come not from the generosity of the state but from the hand of God." Why then should two people be stopped from entering into a willful agreement, especially if it is without any infringement of a person's right?
7. It will eliminate jobs, as mandating businesses to pay workers at entry level will make them think of replacing people with computers or robots instead.
8. It will reduce the incentive for low-wage earners and it will kill their drive to get an education for a higher-paying job. If a lower minimum wage is given, wage workers will think of getting into college, improving their skills, and landing positions or jobs with better pay.
9. It only increases welfare spending and raise taxes.
