This really is a silly debate. The minimum wage should gradually be raised and then automatically increased for inflation. If we can do so for seniors on Social Security, we can do the same for young people. However, that doesn’t mean we jump to $15.00 even over two or three years.
But we need to be fully honest on the issue. Here is an excerpt from the DOLs “Seven Facts About the Minimum Wage”
Yes, nine out of ten are age 20 or older, but 56% are under age 25 which is the breakpoint DOL uses for its own statistics. In other words in many, many cases we are not talking about heads of households.
Tipped workers have a separate minimum, but must be paid the standard minimum if tipped income does equal the standard minimum. The DOL argues this isn’t good enough because employers ignore the law.
It seems it would make sense to put tipped workers on the standard minimum thus removing all the administrative workload and eliminating any unfair labor practices and income variable. But again, this would not work if we moved to $15 an hour.
The problem with the $15 an hour crowd is they do not consider the wider issues. An employer’s costs not only increase for the hourly rate, but for all payroll related taxes as well. That’s 7.65% plus any state taxes which means the actual rate for employers is over $16.00 and hour.
In addition, they ignore wage compression. At $15 you must also raise pay (and payroll costs) for those currently earning $8, $9, $10, $11, $12, $13, $14, $15 and upward.
At that point the prices for goods and services must be affected. This is a far bigger deal than proponents reveal. So if you champion $15.00, just understand the implications and consequences. Large employers may determine they can afford that expense and most already do, but for small and medium firms it is another story.