Many students have worked in minimum wage positions before their college careers, and some continue to work for similar wages while they study to receive their diplomas. Because the minimum wage debate has such a substantial impact on young adults, it is important to open discussion and thought in this setting. After all, it doesn’t appear to be going away anytime soon. In the past few months alone, President Barack Obama signed an executive order increasing the minimum wage for federal contractors, the Austin City Council followed suit with a resolution for city contractors and Seattle became the city with the highest minimum wage in the country.
If I wanted to write something that would be appealing to everyone, I could simply say something like, “The minimum wage needs to be doubled. And you know why it needs to be doubled? Because the minimum wage is too low.” If you want me to tell you what you want to hear, stop reading this. The truth is not always easy to hear.
The vast majority of the people who support a minimum wage increase are not the ones that would be picking up the tab. Now this may seem to be in line with common sense, but so is the argument that business owners should not be told how to run their business by people who have no stake in them. It is very easy to decide how much someone deserves to be paid when the money is not coming from your wallet.
The businesses that will hurt the most from a wage increase are the small businesses. When a business owner is told to pay more money to his or her employees, they are forced to cut jobs and/or raise prices and/or spend less on expanding their business. This then leads to more unemployment and a handicapped economy. Considering that a significant portion of Texans are employed by small businesses, it is probably not the best policy to put in place.
Texas’ unemployment rate for May 2014 was calculated to be 5.1 percent. Not bad considering the rates across the 50 states range from 2.6 percent in North Dakota to 8.2 percent in Rhode Island. I know I just said that 5.1 percent unemployment is “not bad,” but we needed to despise contentment when it comes to our economy. We need to continually push our economy to be stronger and stronger because a healthy economy naturally leads to higher wages.
How can we do better? I think a good exercise is to look at the environments that are thriving. As mentioned earlier, the state with the lowest unemployment rate is North Dakota, with a rate of 2.6 percent. The city in Texas with the lowest unemployment rate is Midland, with a rate of 2.6 percent as well. What do these two economic environments have in common? They are energy-focused and create a friendly environment for businesses. Texas needs to continue to support energy production and fight anything that might curtail this growth. Texas is a business-friendly state, which has led to large amounts of people moving here in search of more stable jobs.
So, as we learn at this University, graduate and help shape the future of this country, may we work to create an environment that will allow businesses to flourish. Raising the minimum wage sounds great, but in reality hurts job growth. Politicians love to have people focused on raising the minimum wage rather than on improving the economy. For them, more focus on the former leads to less accountability on the latter.
Olsen is an economics and finance senior from Argyle. He is the vice president of UT's College Republicans.
Correction: An earlier version of this column misidentified Olsen's title. He is the vice president of College Republicans.