Question

identify the pros and cons to Raising the minimum wage for service industry workers in lodging. Research the subject and include past and current cases, precedent, current public, and business owner's perspectives, and any statistical information from a business point of view. . You will use your research to identify the effect (s) of the topic on the industry and construct a persuasive argument of why or why not the identified effect(s) are a benefit or a hindrance.

Reference

My term paper will discuss the rise of minimum wage for service industry workers in the lodging sector of hospitality. I have always been fascinated by the minimum wage increase. When I was younger, the minimum wage was $6.50; now, it is possible to make it almost $18.00 per hour. Minimum wage influences the hospitality industry because it is one of the largest employers in the country. The demands of the job are overwhelming on staff. Providing the best service to customers will become easier when the increase is implemented. The pay increase will make the team more likely to deliver friendly service. When hospitality workers are provided with higher wages, they can take the hospitality home with them and help lift their families out of financial and emotional strain. The increased income will empower the state's poorest residents. The Economic Policy Institute shows that when wages are on the rise, people tend to have more cash to cover necessities. In addition, people support a pay increase because they believe they will get an employee with a higher skill set. Opponent: Detractors of the pay increase argue that it will be hard for employers to keep up with the pay increase. It may be hard for the employer to keep up with paying the wages to its employees and may have to decrease jobs. People do not support the pay increase because they believe that the people they are trying to support by raising the minimum wage will be turned down due to a lack of skills. A study conducted by Purdue University concluded that raising the minimum wage to $15 per hour expected a 4.3% increase in price increases.

Week 5

Maverick, J. B. (2021, May 19).What are the pros and cons of raising the minimum wage?Investopedia. Retrieved January 5, 2022, from https://www.investopedia.com/articles/markets-economy/090516/what-are-pros-and-cons-raising-minimum-wage.asp

The author speaks on the downside of raising the minimum wage to $15.00 per hour, which would probably lead to businesses increasing prices which in turn causes inflation. The article highlights that the higher the minimum wage, the higher the living costs. He gives an example of another factor to consider: the small businesses that employ minimum wage workers. Raising their payroll by 100 percent or more could put them out of business, causing unemployment to skyrocket and taxes from the economy to decline, causing an economic depression that might not be recoverable. This will be incorporated in the paper to highlight the potential adverse effects of raising the minimum wage

RICHARD A. JONES, D. J. (2015, March 17).Int'l franchise ass'N, Inc. v. City of Seattle. Legal research tools from Casetext. Retrieved January 4, 2022, from https://casetext.com/case/intl-franchise-assn-inc-v-city-of-seattle

The author references the U.S. Supreme Court case International Franchise Association vs. City of Seattle. He highlights that franchise businesses argued that the city of Seattle discriminated against them. He outlines that under the city law, upheld by the U.S. Supreme Court, franchise owners are required to meet the 2018 deadline for reaching the mandatory $15.00 minimum wage increase limit, just as the large businesses are required to. At the same time, small businesses are given until 2021 to reach the mandated minimum wage increase. Despite being considered a large business, these franchise owners were trying to make a case to be regarded as small businesses.

This could cause some franchises to shut down if they are not financially stable enough to meet this mandated law. Depending on their franchise agreement and their required fees for operating a franchise, this could potentially put them out of business, which in turn would hurt the very people the wage increase was intended to help. This article shows how a rise in minimum wage can be helpful to some and detrimental to others. Whichever way you lean towards, in support of or not supporting of, we should take a hard consideration of the consequences into the decision-making process.

Scheiber, N. (2015, July 27).Raising floor for minimum wage pushes economy into the unknown. The New York Times. Retrieved January 6, 2022, from https://www.nytimes.com/2015/07/27/business/economy/scale-of-minimum-wage-rise-has-experts-guessing-at-effect.html

The author of this article speaks on the upside of raising the minimum wage to $15.00 an hour. He highlights how people can make more money, even with little experience or education. The writer refers to New York as one state that could benefit from a minimum wage increase. The article highlighted that based on projections from government data, the proposed $15 minimum wage for fast-food workers could represent more than 60 percent of the wage of a typical New York City worker. By definition, the minimum wage is workers cannot be paid less than a certain amount for their services. This concept was established so employers could not pay less than a livable wage to inexperienced or retired workers. This example shows that workers are not paid a livable minimum wage, implying an increase. This will highlight the need for an increase in the minimum wage.

Week 7

A rise in the minimum wage substantially impacts the hospitality industry. Increasing the minimum wage help many organization optimize productivity in the sector. In addition, we have seen the rise in the minimum wage has motivated employees to work hard, thus increasing productivity. Tom Fleischman published an article for the Cornell Chronicle stating that a study performed by kadiyali show that, for a particular class of restaurants, consumers benefit from an increase in [minimum] wage because employees are motivated, and owners are encouraged to provide better service," Kadiyali said "The discussion around minimum wage has been all around how prices will go up, and consumers will be worse off. But we find, in our research, that consumers are happier with the overall quality."Increasing the minimum wage will impact some areas, such as increasing living standards.

Proponent: Many workers in the hospitality industry are suffering from low income. However, increasing wages will help improve the workers' living standards. Nonetheless, raising the minimum wage will help eradicate poverty amongst the low-wage-earners. According to J.B Maverick, "A 2019 Congressional Budget Office (CBO) report projected a significant improvement in the standard of living for at least 17 million people, assuming a minimum hourly wage of $15 by 2025, including an estimated 1.3 million people being elevated above the poverty line."

Most importantly, raising the minimum wage can help reduce income inequality amongst the workers in the hospitality sector. Moreover, increasing the minimum wage promotes job satisfaction and motivates employees to work hard, thus optimizing productivity.

Opponent: However, raising the minimum wage will likely increase labor costs, increasing employers' laying off employees. According to J.B Maverick, "The 2019 CBO report estimates that raising the minimum wage to $15 an hour by 2025 would result in the loss of approximately 1.3 million jobs. The numbers could be substantially higher if companies made a major move toward outsourcing more jobs to less expensive labor markets outside the country." According to Richard Jones, in the case of

the International Franchise Association v The State Of Seattle, "several owners of franchise businesses sued the city in 2014, arguing that the law applies unevenly to businesses affiliated with a national chain by requiring them to fully comply with the new pay rates four years sooner than local businesses." This could cause some franchises to shut down if they are not financially stable enough to meet this mandated law. Depending on their franchise agreement and their required fees for operating a franchise, this could potentially put them out of business, which in turn would hurt the very people the wage increase was intended to help. This article shows how a rise in minimum wage can be helpful to some and detrimental to others. Whichever way you lean towards, in support of or not supporting of, we should take a hard consideration of the consequences into the decision-making process.

DAVID HELTON, ET AL. v. GLENN ENTERPRISES, INC., DBA LINMAR HOSPITALITY. (n.d.). Retrieved January 18, 2022, from https://www.tncourts.gov/sites/default/files/OPINIONS/TCA/PDF/061/HeltondOPN.pdf

Maverick, J. B. (2021, May 19).What are the pros and cons of raising the minimum wage?Investopedia. Retrieved January 19, 2022, from https://www.investopedia.com/articles/markets-economy/090516/what-are-pros-and-cons-raising-minimum-wage.asp

RICHARD A. JONES, D. J. (2015, March 17).Int'l franchise ass'N, Inc. v. City of Seattle. Legal research tools from Casetext. Retrieved January 4, 2022, from https://casetext.com/case/intl-franchise-assn-inc-v-city-of-seattle