20 states raising minimum wage; what’s the impact?
LEXINGTON, Ky. (WKYT) - In three days’ time, 20 states nationally will be raising their minimum wage. Kentucky’s neighbor to the north in Ohio will raise the minimum wage by just 10 cents, whereas California is raising it by $1. It’s a bit of a polarizing topic that people debate. Independent wealth management advisor Josh Smith of Strategic Wealth Designers joined the newscast to talk about the pros and cons for states making changes. He says that even politicians within their own parties are divided on what is best when talking about minimum wage hikes.
“There’s a lot to dissect with this conversation around how much people should be paid for the work they do,” Smith says. “If you are a sound employee and do a good job you should be paid fairly for that level of work, at the same time if said position’s payment cost goes too high for an employer, technology will be developed to eliminate that position. People like Elon Musk have talked about scenarios where 25 to 50% of all current job positions in the United States will be eliminated by AI and other technological advances in the next 20 years. Businesses can’t operate like the federal government, they have to be profitable to survive, so while the increase is good for employees in the near-term, it could be very problematic for jobs in the long term.”
Smith says this topic is a pretty clear cut outcome. Wages will continue to go up until they no longer can make operational sense and when that occurs, the position will be eliminated assuming a technology upgrade allows it for the company. The other long-term scenario is the potential devaluing of the dollar. He says it’s important to keep an eye on the dollar’s strength, especially as 2025 approaches when many states have enacted a minimum wage of $15/hour. To see additional stories surrounding business and economic news for the Lexington area, visit https://WKYT.com/MoneyMatters and if you have a question for Josh send an email to firstname.lastname@example.org.
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