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Effects of increasing the minimum wage
The negative and positive effect of minimum wage
Effects of increasing the minimum wage
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A sensitive topic for many Americans is their income. Many people’s income relies on minimum wage. In 2012, 3.6 million people received an hourly pay at or below minimum wage. There is an ongoing debate in government as to what the minimum wage should be. Stuck at $7.25, Obama has suggested raising the minimum wage to $9.00. Depending on a person’s perspective, raising minimum wage could be positive or negative. Minimum wage has the ability to change lives, and change the economy. Small businesses and unemployment, teenage demographics, and the cost of civilian goods would be most affected.The only mystery is whether things would change for the better or for the worse. Many areas could be affected by a change in minimum wage, but potentially the most drastic change would be to unemployment. Advocates of a higher minimum wage insist that a raise would significantly decrease the unemployment rate in the United States and improve the quality of living. However, there are conflicting opinions on this. Higher minimum wage would mean higher labor costs for business owners, thus making it more difficult for employers to maintain the amount of workers they have, let alone add new employees. Raising the minimum wage does not increase the value of the worker's labor; it increases the cost of the worker's labor. As a general rule the more something costs, the less of it people will buy. This is true of not only consumer goods but also of workers in the labor market.Many jobs come from large corporations but they also come from small businesses.There are 23 million small businesses in America, accounting for 54% of sales and 55% of jobs. Raising the minimum wage means that all of these corporations and businesses will have to dig deeper in... ... middle of paper ... ...se small businesses wouldn’t be able to afford to pay as many employees. By raising the minimum wage many teenagers and others who rely on these jobs as their only source of income could potentially be put out of a job. These people would no longer be able to afford the items they want or need. Businesses would have to raise the price of consumer goods to compensate for the higher cost of employees. Businesses could potentially lose customers that have been put out of a job and are unable to afford the company’s services. Raising the minimum wage would have a domino effect on the economy leading from one negative thing to the next. Works Cited http://www.dol.gov/whd/minimumwage.htm http://www.nytimes.com/2013/02/13/us/politics/obama-pushes-for-increase-in-federal-minimum-wage.html?pagewanted=all&_r=0 http://www.salary.com/increasing-the-minimum-wage-pros-cons/
Poverty continues to grow in America. The average minimum wage in the United States is $7.35 an hour- far too low in today’s society. Key expenses, for example, gas and housing prices, have gone up significantly since the minimum wage was last changed in 2007 (Wagner 52). The laws creating the minimum wage were intended to improve the standard of living and decrease poverty. Raising minimum wage is a vital step in decreasing poverty and giving every family the opportunity to survive and succeed. Millions of hard-working Americans are below the poverty line and need an increase in pay. Minimum wage must be raised because it will diminish poverty and assist the working class to support their families.
The United States minimum wage is not indexed to inflation. Due to this fact, the purchasing power of minimum wage falls as the price of consumer goods increases. The current hourly minimum wage is set at $7.25, however many states do pay above this rate. One example of this is in Michigan, the current hourly minimum wage is $7.40. The last time a change occurred to raise minimum wage was in 2009. President Obama has put out a proposal that is designed to raise the federally required hourly minimum wage to $10.10 in 2015. The public opinion of this proposal is all over the board ranging from a positive outlook to a negative one. Some of the negative remarks are that it would dampen the economy and shrink the hiring done by small businesses. “The Household Survival Budget for the average New Jersey family of four is $58,500 and for a single adult is $25,368 in 2010. These numbers highl...
Well, raising the minimum wage has both the pros and cons. Still, the fact that increasing the minimum wage nationwide would increase millions of workers’ earnings is deniable. I suppose that’s why some people advocate raising the minimum wage will grow the economy for everyone. In 2014, the president of the United States, Obama, called on the current Congress to raise the national minimum wage, which proves that Obama actually supports raising the minimum wage. ‘February 2014 Congressional Budget Office Report The Effects of a Minimum-Wage Increase on Employment and Family Income is the latest attempt to do so, in this response to Members of Congress with respect to an increase in the federal minimum wage from $7.25 to $10.10 per hour.’
Many people against raising the minimum wage create arguments such as, “it will cause inflation”, or, “ it will result in job loss.” Not only are these arguments terribly untrue, they also cause a sense of panic towards the majority working-class. Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has consistently increased, even when the wage has been
Throughout the decade, a continuous firing debate still remains, whether to raise the minimum wage or keep as it is. People believe that raising the minimum wage can hurt the economy. More will lose jobs than gain. Though all are true, the amount of poverty shown throughout the decades are jaw dropping. That is in fact one of the leading factors. As there is yin and yang, the demand for a higher minimum wage is no coincidence or selfishness as others perceive as is. The poverty shown throughout the decade is deadly prominent. Minimum wage should be raised as people are not gaining enough money compared to the past, despite with more education, too many low quality jobs, “in active” unemployment are outcasted from the statistics, and finding jobs is more difficult than it was decades ago.
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects.
Currently, in the United States, the federal minimum wage has been $7.25 for the past six years; however, in 1938 when it first became a law, it was only $0.25. In the United States the federal minimum wage has been raised 22 times since 1938 by a significant amount due to changes in the economy. Minimum wage was created to help America in poverty and consumer power purchasing, but studies have shown that minimum wage increases do not reduce poverty. By increasing the minimum wage, it “will lift some families out of poverty, while other low-skilled workers may lose their jobs, which reduces their income and drops their families into poverty” (Wilson 4). When increasing minimum wage low-skilled, workers living in poor families,
Since the cost of living has gone up drastically, raising the minimum wage is the right thing to do to boost the economy, lift workers morale and productivity, and improve the self sufficiency of potentially millions of American workers. Raising the minimum wage is a vital step in decreasing poverty and giving every family the opportunity to survive and succeed. Even businesses agree raising the minimum wage would give many customers more money to spend in turn increasing sales and higher profits for the companies. Therefore, raising the minimum wage would help and not hurt the economy and it would give many Americans a better livelihood and a more secured life. In today’s society it is very expensive to live in American and even getting by daily is difficult if you are living on minimum wage. Therefore, anyone who thinks the minimum wage should not be raised should try living in
Raising the minimum wage would affect employees. Supporters believe that raising minimum wage will improve people’s lives. We live in a consumer society. People who earn more spend more on products and services. As stated by BuzzFlash Headlines, “Higher Minimum Wage Would Create Over 100,000 New Jobs Nationally” (BuzzFlash Headline). Families would be able to use the money they earn to save for important things such as bills. If they wanted to, they could also buy more groceries or appliances. Non-supporters feel that raising the minimum wage will create many job losses. According to Economic Policy Institute, “Across the phase-in period of the increase, GDP would grow by about $22 billion, resulting in the creation of roughly 85,000 net new jobs over that period.”(David Cooper). If a family owned business has to raise the wage rate they pay, it is possible they will not hire as many people as they usually do. Businesses across the nation would be impacted by raising the minimum wage. According to the CNBC, “The great division among businesses and economists over the impact of raising...
America is currently working on the issue of whether the minimum wage should be increased from $7.25 to $10.10 and economists are studying the effects of the possible increase. Minimum wage workers deal with struggles such as affording health care, paying for education, providing food for their families, putting many hours of work in while making little income and paying their bills. America’s decision to raise the minimum wage would help low wage workers to make higher incomes and would overall strengthen the economy, pulling Americans out of poverty. Americans may hold a minimum wage job if they do not have money to attend a college or university to obtain a degree in order to find a career.
The increase in minimum wage is extremely crucial towards fixing the economy. As President Trump as mentioned, he plans to raise the minimum wage, in order to fix the economy. This process is extremely important, since inflation in prices often leads to a decrease in consumer spending by citizens on minimum wage. Recently, Trump discussed how the economy is driven by consumer spending, and workers with low incomes are less likely to spend extra money. In addition, he has demonstrated that raising the minimum wage is a strategy to help the economy increase and flourish. The use of a higher minimum wage would greatly aid citizens struggling with low levels of income. Not only will this process lead to higher levels of spending, but also increase economic growth. This process will serve not only as a benefit towards citizens on minimum wage, but also for the economy as a
"Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty... so join the rest of the country. say yes. give America a raise" (President Barack Obama 2014). This quote depicts that not a single human being that works hard at their job should ever have to be poor. This idea among many was part of President Barack Obama's state of the Union Address for 2014, promoting while seeking, a year of change to all American citizens. As a citizen of the United States, one knows the economic hardships and unemployment rates increasing. There needs to be a stop to these inclines, especially towards the poor and those becoming more educated with college. This is why I, for one agree with President Obama on raising the minimum wage to $10.10 an hour. Raising the minimum wage slightly from $8.25 to $10.10 (only $1.85 increase) will have a huge impact on Americans today and even future Americans. Increasing the minimum wage to $10.10 an hour will aid millions researchers say, through the economic values of food prices, small businesses unemployment rates, college students coping with college debt, and the poor living in a state of poverty.
Some people do not like increasing minimum wages because of the reducing employment. Small businesses will not able to afford of paying more. Minimum wage jobs are not for people how...
The popular belief is that increasing the minimum wage will encourage job growth and repair the economy. However, a larger minimum wage promotes automation instead which results in a decrease of jobs available for minimum wage workers (Rensi). As automation becomes more popular, many businesses will begin to resort towards that idea in order to reduce labor cost. Instead of creating more jobs and helping those in poverty, increasing the wage would stifle job opportunities for teens and workers. “An extensive survey of decades of minimum-wage research, published by William Wascher of the Federal Reserve Board and David Neumark of the University of California, Irvine, in the 2008 book “Minimum Wages,” generally found a 1 percent or 2 percent reduction for teenage or very low-skill employment for each 10 percent minimum-wage increase,” (Rugy).
Many critics claim that that raising minimum wage increases unemployment, especially for unskilled workers, and harms small businesses, including grocery stores and restaurants. The argument declares that companies such as these rely mostly on unskilled workers for labor, and if the minimum wage increases, then their profits and, therefore, hiring would decline, creating a...