Bill Gates Is Against Raising Minimum Wage Because It Would Cause 'Job Destruction' — Says Limited Hours Are A Bigger Reason For Poverty

Ever wondered about the person who made your morning coffee or flipped your burger at lunch? These workers, often earning minimum wage, are at the heart of a national debate on fair pay and economic stability.

In early 2014, Microsoft co-founder Bill Gates made surprising comments about raising the minimum wage on MSNBC's "Morning Joe." Gates, known for his generally liberal political views, warned that raising the minimum wage could "cause job destruction" by encouraging more automation.

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"You have to be a bit careful. If you raise the minimum wage, you're encouraging labor substitution. You're going to go buy machines and automate things or cause jobs to appear outside of that jurisdiction," Gates explained. He emphasized that pushing certain policies too far can lead to significant trade-offs, particularly regarding which households benefit. Gates questioned whether the benefits would go to teenagers in wealthy households or those in poverty.

He also pointed out that a major issue is the limited working hours available to people in poverty, not just the wages themselves. For instance, many fast-food workers are part of poor households. Gates noted that about 80-90 percent of households in poverty have limited working hours, and 11 percent of these households are from the poverty-stricken segment.

These comments, made nearly a decade ago, are still relevant today. The federal minimum wage has stayed at $7.25 per hour since 2009, leading many states to take action independently. As of 2024, 30 states and Washington, D.C. have minimum wages higher than the federal level.

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For example, California recently implemented a $20 minimum wage for fast-food workers, which took effect in April 2024. This move has been closely watched by economists and policymakers nationwide. States like New York, Massachusetts, and Washington have also increased their minimum wages significantly over the past decade.

The impact of state-level minimum wage increases has been mixed. While some studies show modest job losses, others indicate minimal negative effects on employment. A 2021 study by economists at the University of California, Berkeley, found that higher minimum wages in California led to higher earnings for low-wage workers without significant job losses.

California's fast-food industry has seen noticeable changes since the implementation of the $20 minimum wage. Some restaurants have increased automation, with self-service kiosks becoming more common. Others have adjusted their business models, reducing staff hours or increasing menu prices to offset higher labor costs.

In 2013, President Obama proposed raising the minimum wage to $9 an hour to help 15 million workers and offset inflation. The administration argued that the minimum wage couldn't support a family.

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The minimum wage debate is more than just an economic discussion; it's about the quality of life for millions of Americans. A higher minimum wage can mean the difference between poverty and a livable income for workers. For businesses, especially small ones, it can impact hiring decisions and overall operations. For the economy as a whole, it affects consumer spending power, inflation rates, and overall economic growth.

Gates' comments show how wages, employment, and technology are connected. He pointed out, "It's not as simple as just saying, ‘OK, raise wages.'"

Raising the minimum wage might seem like a straightforward solution, but it comes with a ripple effect. Higher wages can lead to increased costs for goods and services as businesses adjust their prices to cover higher labor costs. This trickle effect can impact the very workers the wage hike aims to help, raising questions about the most effective way to improve economic stability for low-wage workers. 

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