Benefits Of Raising The Minimum Wage Essay

Benefits Of Raising The Minimum Wage Essay

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First of all, raising the minimum wage would result in job loss. One basic law of economics is that the demand for a product decreases when its price goes up. This law of demand also affects the labor market. For example, Brodsky (2016) uses his own restaurant as an example and points out that he needs to cut down the number of employees in order to stay at the same level of revenue if the minimum wage is raised to $15 per hour. Raising the minimum wage means the higher labor costs for business and it becomes less affordable than before, which push business owners to take actions. Although there are two basic ways to maintain profits, which are firing workers and increasing the selling price, more business owners, in the short term, prefer to cut the number of employees because it has a quick result. In addition, a company will not keep workers who can only add $7.25 in revenue but need to be paid $15 per hour because this results in loss. If the company keeps such a full-time worker for one year, it would lose $15,500. Companies are obviously not willing to lose money. Evidence shows that employers do respond in this way to minimum wage hikes. Research by economists Clemens and Winter (2014) finds that 1.4 million jobs were destroyed in the late 2000s when the minimum wage rose across all 50 states by an average of nearly 30 percent. What is worse is that those job losses were probably suffered by the workers who need jobs the most. In general, increasing the minimum wage would eliminate jobs and cause the unemployment rate increase, so it is a better idea that the US government do not raise the minimum wage.
Another reason is that raising the minimum wage would give more pressure to business owners and result in higher prices fo...


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...ver 46 million Americans living in poverty, the issue is definitely one that needs to be solved or improved by the government. For example, in the presidential elections this year, much of the debate has been focused on minimum wage, and several policymakers are facing pressure to increase it to improve the problem of poverty. However, an increase in the minimum wage is not the right solution. It is important to ask how well the benefits are targeted to the poor and low-income families that the policy is intended to help. If the issue is to be addressed, it needs to be addressed in other ways, like the earned income tax credit (EITC) which is a benefit for citizens with low income. The EITC reduces the amount of tax low-income employees owe and may offer them a refund. Because the EITC targets low-income families much better, it seems far more effective to help them.

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