Spring Break
Minimum wage increase may cause innovation or job loss
By: Calli Turner
Issue date: 7/21/08 Section: News
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Although the federal government sets a national minimum wage, states have the authority to set higher minimums. According to the U.S. Department of Labor, Kansas is the only state to have a minimum wage lower than the federal level, while 14 states, including Texas, have a minimum wage identical to the federal level.
Nick Langford, a senior English major and student worker for the Policy Sciences and Economics Library, said he is glad because he will receive more money but I don't have a strong opinion for or against.
"I guess by my knowledge would have to deduce that I don't care because I haven't looked into the issue, but it's a complex issue and I don't think it's easy to determine, 'oh it's bad,' or 'oh it's good,'" he said.
Langford said he could see both sides of the issue.
"Maybe depending on which side of the economic continuum that you sit, whether you're liberal or socialistic in your thinking, or you're more conservative and saying, 'oh this is capitalistic,' maybe there's profit for both ends and negative consequences for both ends," he said.
"At the same time, you lose jobs, granted, because employers won't employ people because of the cost of employment, but at the same time, if your wages aren't providing for the needs of your employees, then how do you balance that? How do you balance the reality of inflation?" Langford said. "I think regardless of jobs being lost, more needs are being provided for."
The enactment of a higher minimum wage raises uncertainty of whether it will affect employment rates.
Adalbert Mayer, assistant professor of economics, said the minimum wage increase will only affect workers who currently earn the minimum wage or close to the minimum wage.
George Rapp, a junior history major said he is not employed at the moment and has not worked for minimum wage.
"It needed to happen because a lot of people are relying on it," Rapp said.
Rapp said companies may find alternatives to cutting down on employees.
"A company's going to cut down wherever they can cut down, regardless of how much it's going to cost, this might lead to a little innovation where they replace a certain job with some new piece of equipment," he said.
Rhonda Faltysek, owner of Maggie Moos Ice Cream Treatery, said the minimum wage increase will not affect employment levels at Maggie Moos.
"I don't think jobs are lost, but small business owners may have to go up on prices," she said.
Faltysek said the increase is nothing new for some employees.
"We employ high school and college students and most are already making above minimum wage," she said.
This is the second of a series of increases spanning three years finishing off with $7.25 by July 24, 2009.
The minimum wage increased from $5.15 to $5.85 July 24, 2007, the first increase since September 1997.
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