Will An Increase In Minimum Wage Effect the Economy?
As a consumer who lives in the United States, I believe increasing the minimum wage will benefit the economy. Raising the minimum wage will stabilize jobs, increase buying power, provide investment opportunity, and increase quality family time. Ensuring an adequate minimum wage is important relative to maintaining the standard of living and adjusting to inflationary changes within our society. Throughout time, the United States has endured several recessive periods: The Great Depression (1929-1939), recessions of 1969-1970 (11mo); 1973-1975 (16mo); 1990-1991 (8mo); and the Great Recession of 2008-2009, which encompassed the stock market crash and the real estate bubble. Despite these recessive setbacks, the economy was able to recover. This recovery or viability was afforded by providing stimulus to the economy via employment. Such employment was predicated on having an adequate income (minimum wage) by which to contribute to the economic growth of the society. From my economic framework, I strongly believe that consumers benefit from minimum wage increases. I do not feel that increasing the minimum wage compromises the economy or unemployment rate.
As part of the Fair Labor Standards Act (FLSA), the federal minimum wage was instituted via congress in 1938 (ALEC, 2014). With enactment of this law, states and other local government entities were given authority to set their own minimum wages above the federal level. As a result, minimum wages vary from region to region.
Led by Washington state … with the highest minimum wage rate… at $9.32 per hour … 21 states and the District of Columbia have a minimum wage rate higher than the federal wa...
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...ing—but it also reduces turnover, cuts the costs that low-road employers impose on taxpayers, and pushes businesses toward a high-road, high-human-capital model” (p. 1).
In conclusion, research has shown that raising the minimum wage does not result in job loss even if there is a period where the unemployment rate is high. Critics who believe that minimum wage increases will result in job losses and further stress the economy are simply misinformed. I have learned that increasing the minimum wage may generate an increase in the cost of some products; however, this has a null effect on unemployment. The net effect on unemployment remains unchanged; people remain employed. As a single mother of two increasing the minimum wage will allow me to contribute to the growth of the economy, provide for my family, save for a rainy day, and enhance financial stability.
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