There is a lot of talk floating around about the possibility of raising the minimum wage. Recent strikers in New York want the amount raised from $7.25 to $15 per hour. On the Federal level, a raise hasn't been incorporated since 2009 when it was increased by $0.70 per hour. However, does an increase of wage really benefit those who are making so little? What aspects are there to consider when raising the minimum wage to help those who are impoverished survive?
1. Direct Changes - What a lot of these protestors don't realize is that by increasing the minimum wage by more than 100-percent, the price of services and goods will have to increase as well in order to compensate to pay the employees. If the prices of goods are too high to encourage sales, there will be no income to pay these employees. Layoffs would be inevitable.
To the rental communities, home prices shouldn't be affected by these direct changes. As there are no employees to pay minimum wages to, the cost of an apartment or house rental should remain a constant. Upkeep and various services may become more expensive, but the roof-over-head itself should remain the same.
2. Cost of Living - Many organizations increase employee payroll every year to help offset the increase to costs of living. Every year, services and goods that are required to living in a home increase and these organizations pay more to help employees survive. If an increase to $15 per hour were to take place, every employee of every business making less would have to be instantly increased to make as much. This will increase utilities, services, food and a variety of other additions to living in the home. Almost everyone would surely be affected and still be unable to live comfortably as prices had to rise in unison.
However, the roof over your head should remain the same. Unlike you, the house doesn't benefit from food or electricity. It will remain standing oblivious to the changes that are happening. Contracts are set into place to prevent increases to rent - especially when the increase doesn't affect the establishment in the same manner.
3. Greed - There are those companies and private business owners who see the increase of minimum wage as a way to bolster their own income. These individuals may call it a "cost of living" increase and can be explained by a trickle-down effect. While some of these organizations could have legitimate claims to increase prices, many have no other reason than greed. Eventually, we could be back to where we started with $15 per hour not being enough money either.
Personal greed isn't the only influence that can drive up rental costs. Perhaps the owners can't survive themselves and rely on property management as 100-percent of their income. As their living expenses increase in order to make up for the $15 per hour, the income has to increase as well. While leases can protect a renter from immediate changes, the owners could increase the monthly fees after the expiration in order to survive themselves.
There is more to a raise than just handing out a larger paycheck. Everyone can become affected in negative ways if the increase isn't gradual enough to sustain businesses. Although rental properties could be unaffected by these direct changes, the trickle down could be detrimental to the market.
This article is contributed by Madoline Hatter. Madoline is a freelance writer and blog junkie from ChangeOfAddressForm.com. You can reach her at: m.hatter12 @ gmail. com.