The Cost Of The Minimum Wage

2450 Words10 Pages
With one of the highest standards of living and one of the most stagnant minimum wage rates in the United States, Hawaii is not always the paradise that many consider it to be. Between 2007 and 2014—during which America went through one of its biggest financial crisis since the Great Depression, the minimum wage rate remained at $7.25. According to economic professor Amy Glasmeier’s Living Wage Calculator, a person with a spouse and two children would have needed to make $28.95 to subsist in the county of Honolulu, $21.70 more than the $7.25 minimum wage (Lam, 2015). As a result, in 2014, Governor Neil Abercrombie approved a proposal to gradually raise the minimum wage to $10.10 by 2018. He did this in hopes that raising the minimum wage would help workers meet the rising cost of living in Hawaii. 2015 saw its first wage increase to $7.75, and 2016 saw another increase to $8.50. While many minimum wage workers applauded Abercrombie’s decision to raise the minimum wage, his approval has also been met with criticism, reflecting the current nationwide debate over raising the minimum wage. The debate over a minimum wage can be traced back to the beginning of economic thought. The origin of two types of economic theories, the labor theory of value (which supports a minimum wage increase) and the utility theory of value (which opposes a minimum wage increase), came from Adam Smith, the first economist to develop a consistent view of capitalism (Hunt, 40). Smith mainly
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