2014 ERC Scholarship Essay Program $500 Recipient
Julia Ellings, Bellevue (Claremont McKenna College)

If you think that hard-working Seattleites have the right to earn a decent living, raising the minimum wage might sound like a step in the right direction. Seattle City Councilwoman Sawant appealed to our sense of justice when she called for increasing that wage by 60%. Proponent Nick Hanauer admitted that he just “made up” the $15 amount, without relying upon any economic calculations to justify it. Yet, that figure has been embraced as a step toward remedying “income inequality”.

Inequality is an abhorrent concept to most Americans. Who would advocate inequality – let alone income inequality? A concern for fairness is part of our American DNA. Unfortunately in this case, it has prompted us to mandate what is thought to be a fair wage. We should be asking whether the employee brings enough value to the business to justify the wage he/she is being paid. If one’s work does not enable the employer to make a profit, neither will benefit.

As a college freshman with one economics class under my belt, my clearest insight into this subject comes from the experience of my family members who fled communism in Eastern Europe. They lived with the tragic results of business decisions made by government officials oblivious to the needs of the market. This resulted in ridiculous surpluses, dangerous shortages as well as a demoralized workforce without incentives for innovation and productivity. There were few honest opportunities for advancement. No matter how hard one worked, the payoff was the same, because in theory, everyone deserved the same “fair” wage.

Today, many of my relatives run their own businesses in Washington State. They’re against the $15 minimum wage, even though they started out in America as minimum wage earners. They’re concerned that a significant minimum-wage hike might force small business owners like themselves to cut jobs or curtail hours and benefits. My aunt, who runs a nursing assistant training business, employs workers of various skill levels. She knows she must compensate them competitively so that they have incentive to continue working for her. On the other hand, if she pays too much, she won’t be able to stay in business. She worries that the $15 wage might displace low-skilled workers by compelling employers to seek more qualified workers for entry-level jobs.

Sure, some will benefit from the wage increase. But if our goal is to generate more well-compensated workers and a healthy economy, our discussion must go beyond mandating a minimum wage. It must include figuring out how to provide the necessary training and education so that the minimum wage job does not become a way of life, but rather a stop along the way to a productive career. I dream of running my own business one day. When I do, I hope that I will have the freedom to make the necessary decisions to run as successful a business as I possibly can, for my own sake, and the sake of our economy.

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