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Volume 72, Issue 102, Wednesday, February 28, 2007

Opinion

Raising wages will only increase prices 

Ursula Hawkins
Opinion Columnist

It's hard to believe that there was a time when a gallon of gas cost 75 cents, or when a brand new car could be bought for less than $2,000. Prices like this no longer exist for gas or cars, but 30 years ago they was the norm. Over time, it is inevitable that the cost of living will go up, but the recent bill proposing an increase in minimum wage is not fair or necessary for all Americans, and will cause already rising prices to go up even more, affecting everyone.

The current minimum wage is $5.15 per hour, and it has been that way since 1997. A bill that has already passed through both the House of Representatives and the Senate aims to increase minimum wage over the next two years to $7.25 per hour.

Although this may sound like a good idea -- especially to those who make minimum wage -- there is no point in raising it, as prices for everything else will skyrocket. Businesses are in business to make a profit, and if they have to pay their employees more, it's a guarantee that consumers will have to pick up the slack. The prices of the products that companies and businesses are selling are going to be higher. Some businesses may even go so far as to cut hours and jobs in order to secure their profit, which would only hurt the people that are supposed to benefit from the wage increase. 

It does no good to make more money when one is not working as many hours. There is no real benefit besides the extra leisure time. 

If this bill is made into law -- which is expected -- 15 million workers are supposed to benefit from the increase in minimum wage, while 1.6 million people are expected to lose their jobs, CNNMoney.com reported. 

An increase in minimum wage is also not fair to all workers. The bill excludes those who already earn more than minimum wage. Since their employers would not be required to increase their wages, most of them would probably not give raises, and as a result those workers would have to deal with an increase in the cost of living but would not get paid accordingly. 

The cost of living is always on the rise, but the cost of living is also different in various places throughout the county, so really, states should be in charge of setting their own minimum wage. Life in Los Angeles, Calif., is going to be much more expensive than life in Dickinson, N.D. States are allowed to set minimum wages rates above what the federal government has set, but are not allowed to have minimum wages lower than what the federal government sets. Some states, such as California, already have minimum wages above the expected increase to $7.25 per hour and thus will not be affected by the bill. But other states, such as Texas and Louisiana, will feel the full effects. Some states may not even need an increase in minimum wage because $5.15 could be enough for workers, and others may only need a slight increase of $1, as opposed to the $2.10 proposed. 

The minimum wage should be able to adapt, but states are better equipped than the national government to handle this issue. If the decision of minimum wage were left up to the states, increases in wages would better match the cost of living, and the increases would not cause businesses to raise their prices at the expense of the consumer.

Hawkins, a communication/Spanish sophomore, 
can be reached via dccampus@mail.uh.edu

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