Boosting the federal minimum wage would be great news for the workers who’d receive a higher paycheck. Not so much for those who’d be out of a job. That anxiety sums up much of the debate around increasing the minimum wage.
Fueling angst on the right, the Congressional Budget Office reported last year that raising the federal minimum to $10.10 would cost about 500,000 jobs. Even liberal restaurant owners, like the ones NewsHour’s Paul Solman spoke to in Seattle last spring, worried that paying their workers more would doom their businesses, while nonprofit organizations feared having to cut their staff and services.
Nearly half of all workers toiling at or below the minimum wage work in food preparation and service. The National Restaurant Association’s 2014 analysis of raising the wage to $10.10 concluded that tens of thousands of jobs would be lost across specific states.
If CEO compensation in the fast-food industry is any indication, the major fast-food companies could afford to pay low-wage workers more. In 2012, CEOs received 1,200 times what the average worker was paid, according to the Demos Institute. Right now, the assumption is that paying low-wage workers a higher wage would come at a cost. But what if the industry could pay workers more without cutting jobs? And more important to those CEOs, without cutting their profit margins?