A wave of support for boosting the minimum wage is again washing over the state. Rep. Gilda Cobb-Hunter, D-Orangeburg, tried during the budget debate earlier in March to bump the state’s minimum wage up to $10.10 per hour.
The proposal failed, even though approximately two-thirds of South Carolinians surveyed in a Winthrop poll support a minimum wage increase.
But Cobb-Hunter caught my attention when she tried to debunk the commonly held conservative argument against raising the wage. Some think raising the state’s minimum wage—$7.25 per hour under federal law—would kill small businesses.
She said the research doesn’t support that idea. In states that have increased the minimum wage, workers have more money to put back into the economy.
I was curious to know what states saw job growth following wage hikes. According to news reports, the 13 states that increased wages in 2014 saw more job growth than states with minimums remaining the same. But this increase did not establish cause and effect.
Low-wage earners do put more money into the economy when they receive modest pay increases, which often cover more basic necessities. But this increase leads to job growth only sometimes, according to The Atlantic.
Of course wage earners who are barely hanging on, often unable to afford basic needs, at $7.25 per hour would put their extra $2.85 per hour back into the economy—if they can manage to keep that job.
One argument against hiking wages is that increases often hurt the people the government aims to help.
This is what appears to be happening in Seattle, as small employers brace for leaner profit margins.
The reasons for a trend in Seattle restaurants shuttering are diverse. But many restaurateurs struggling with that city’s wage hike from $9.47 to $15 per hour, which is set to take effect in April, are facing grim options for finding ways to pay their staff. For some, keeping staff at current levels means skimping on quality or increasing prices.
In 2014, fast food restaurants on military bases began closing after President Barack Obama signed an executive order to raise the minimum wage for federal contractors to $10.10 per hour.
And this local San Francisco specialty bookstore closed because it couldn’t keep up with the city’s newly implemented $15-per-hour minimum wage.
A living wage is difficult to define—partly because the amount required to live on varies from person to person. Low paying jobs might help put a college student through school, but they aren’t designed to support a family.
And we shouldn’t expect those jobs to. When we do, the evidence suggests small businesses—and even some large corporations—will shrink.