Good Research Proposal About Policy Memo
A statement of current policy
The City of <Name of the City> has been known to recently announce the implementation of graduated minimum wage increases starting July 2015.. The current minimum wage received by workers is just $8.25 per hour, which is actually greater than the federal minimum wage of $7.25 per hour that has been reported to be effective since July 24, 2009 . As disclosed, the City Council would be adopting minimum wage increases from July 2015, and yearly thereafter, up to July 2019 according to the following schedule:
As seen from the schedule, the minimum wage would increase by $0.50 per hour for the first two years starting July 2015 and would increase by $1 per hour in subsequent and consecutive three (3) years until July 2019.
Reasons for initiating changes
Despite the pronounced increases in the city’s minimum wages, there were reports indicating that workers were lobbying for minimum wages to be increased to $15 per hour . The reasons for advocating for the $15 per hour wage is that the announced $13 per hour minimum wage was deemed to be insufficient to meet and support the basic necessities and expenses of the family . Likewise, rivals for the mayoral position allegedly inferred that the $13 per hour wage increase could still be pushed to $15 to gain more supporters from voters in the city. On the contrary, business organizations were reported to apparently contest the graduated minimum wage increases since it would mean additional costs which could jeopardize their bottom lines. In addition, economists have been reported to oppose increasing the minimum wage, specifically the proposed increase of the federal minimum wage to $10.10 per hour for the reason that the increase would eventually drive rises in unemployment rate . As such, one contends that the proposed increase of the minimum wage to $15 should be contested given greater costs to the state, business organizations, and to the workers, in the long run.
Policy options to be considered
After evaluating the current policy, in conjunction with the proposed changes, the following policy options are open for consideration: (1) status quo; meaning, do nothing (by doing nothing, the current policy of implementing graduated minimum wage increases would continue to be enforced); or (2) increase the minimum wage to $15 per hour.
Pros and cons of each option
The advantages of status quo include pushing through with the current policy where
reports have stipulated that the graduated increase in minimum wages “will increase the earnings for approximately 410,000 workers, inject $860 million into the local economy, and lift 70,000 workers out of poverty” (City of Chicago, 2014, par. 1). The disadvantage of this option is apparent complain of workers for asserting that the proposed increases are still not substantial to support cost of living.
Increase the Minimum Wage to $15 per hour
The advantage of increasing the minimum wage to $15 per hour is augmenting the current income of workers to enable increasing purchasing power. The disadvantage of this option is seen from the perspectives of business organizations in terms of jeopardizing their potential net incomes due to increases in compensation. In addition, as asserted by economists, increasing the minimum wage to $15 would put significant stress to businesses which could reverberate to firing employees, filing for bankruptcy, and further increasing unemployment rates . As emphasized, increasing the minimum wage further to $15 would generate the following results: “lose a substantial number of jobs, with the most likely number to be about 10,000 jobs lost during 2015-- either to companies (A) going out of business, (B) cutting back in size and production, (C) migrating to cities outside of the city and/or (D) migrating to other states” . Therefore, in the long run, the costs to the state, to businesses, and even to the residents would be significantly detrimental.
Recommended course of action
After weighing the pros and cons of each alternative course of action, the proposed increase of the minimum wage to $15 should ultimately be contested given greater costs to the state, business organizations, and to the workers, in the long run. Therefore, recommended course of action is the status quo which means retaining the current policy of implementing minimum wages on a staggered basis. The cost benefit analysis renders the option as more viable and beneficial.
Reasoning for selecting that course of action
The graduated increases in minimum wage of workers would enable businesses to prepare for the projected rises in compensation according to the stipulated schedules. As such, the impact to the organizations would not be drastic. The above noted schedule reveals that organizations could prepare for the increase in compensation of workers over a five (5) year time frame. In addition, the current policy has been deemed evaluated by the city’s council and policymakers. Therefore, potential effects were already comprehensively reviewed. The increase in minimum wages would enable achieving the benefits to the workers through rises in purchasing power. In addition, the increase in purchasing power would also benefit the commercial organizations through similar increases in revenues and profits. As asserted by John Bouman, the President of Sargent Shriver National Center on Poverty Law, “a higher wage in city gives all workers in the city a better chance for upward mobility” (Berkowitz, 2014, p. 1). The option aptly evaluates the points of views of the workers, the business organizations, as well as the state.
Chicago City Council Adopts Higher Minimum Wage for Chicago Employers. (2014, December 10). Retrieved January 29, 2015, from The National Law Review: http://www.natlawreview.com/article/chicago-city-council-adopts-higher-minimum-wage-chicago-employers
Berkowitz, J. (2014, December 3). Will thousands of low skilled minorities in Chicago lose their jobs in 2015 so Mayor Emanuel and his supporting Aldermen can keep theirs? Retrieved January 29, 2015, from Chicago Now: http://www.chicagonow.com/public-affairs-with-jeff-berkowitz/2014/12/will-thousands-of-low-skilled-minorities-in-chicago-lose-their-jobs-in-2015-so-mayer-emanuel-and-his-supporting-alderman-can-keep-theirs/
Erbentraut, J. (2014, December 2). Chicago City Council Approves Plan For $13 Minimum Wage Despite Opposition. Retrieved January 29, 2015, from The Huffington Post: http://www.huffingtonpost.com/2014/12/02/chicago-minimum-wage_n_6255436.html
U.S. Department of Labor. (n.d.). Minimum Wage. Retrieved January 29, 2015, from Wage and Hour Division: http://www.dol.gov/whd/minimumwage.htm