Impacts of Minimum Wage
by
Shauna Stevens
Mrs. Tommie Byrd
ENG101-23445
15 April 2016
Shauna Stevens
Mrs. Tommie Byrd
Stevens 2
ENG101-23445
15 April 2016
Impacts of the Minimum Wage Increase
There are currently 2.2 million people in California that earn minimum wage of $10.00
an hour. Which is among one of the highest paid minimum wages in the US. California officially
signed a bill approving the increase of minimum wage to $15.00 an hour. The bill includes a
detailed plan to increase minimum wage over the next seven years; so by 2022 minimum wage
will be at a high $15.00 an hour. Basically entry level pay (minimum wage) is being increased
33% over a seven-year period. “The NFIB group predicts the pay increase will lead to layoffs
and price hikes, as well as force some employers to close their doors altogether.” [ CITATION
Gib16 \l 1033 ] The minimum wage increase to $15.00 an hour will lead to a rise in
unemployment, technology replacing jobs, and inflation.
California will begin to see a rise in the unemployment rate as the increase in minimum
wage will make it difficult for small businesses to afford to hire and/or retain employees. Entry
level positions are not designed to be long term positions or a career by any means. They are
designed for individuals to gain skills and experience in the workforce. Minimum wage is set up
to support these entry level positions. “With that said, working at McDonald’s or the local gas
station isn’t a career. These are jobs designed to help entry-level workers join the workforce, not
to support the financial needs of a family.”[ CITATION Smi16 \l 1033 ] As entry level pay is
increased there will be a push to increase higher level employees pay, basically causing a ripple
effect, which will reach all the way up the corporate ladder. Businesses can’t have higher level
employees making less than entry level ones. “Fifteen is going to be extremely difficult for
retailers to work into their business model,” said Bill Dombrowski, president of the California
Stevens 3
Retailers Association.”[ CITATION Gre16 \l 1033 ] Job cuts will occur if businesses are required
to pay higher wages they cannot afford, they will not be able to hire more employees to fulfill the
organizations workload. Which will cause current employees to take on more tasks and
responsibilities. Ultimately leading to a hike on the unemployment rate, which will increase due
to the fact that companies cannot hire more people. “Consequently, small businesses must either
