Minimum Wage: A War on Business

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On January 28, 2014, President Barack Obama delivered the State of the Union address. Although he outlined many topics, one in particular sparked controversy and debate among business owners and their employees. President Obama asked Congress to increase the nation's minimum wage from $7.25 to $10.10 an hour - a 72% increase! Although a hike in wages sounds enticing, Congress should not increase the federal minimum wage. Arguably, the people in poverty would be most enticed with an increase in the minimum wage, however it will not reduce poverty in America. 21 states have raised their minimum wage above the federal level of $7.25 (The White House). As a result, Employment Policies Institute, a nonprofit organization interested in employment growth, seized the opportunity to fund research and determine if a rise in minimum wage reduced poverty. Michael Saltsman, a member of Employment Policies Institute, published an article in association with CNN explaining the research findings when he stated, “ ...[the study] found no evidence that these state minimum wage increases reduced poverty rates” (Saltsman). It is important to analysis and learn from previous monetary policies in America. A significant rise in wages did not achieve the goal of reducing poverty. Therefore, raising the minimum wage in the remaining states would likely produce no significant reduction of poverty. Furthermore, increasing the minimum wage will shift the financial burden from business owner to customers through higher prices. Over 500 economists from institutions and universities across America signed a letter to President Obama in warning when they stated, “business owners...will need to cut costs, or pass the increase to their consumers in order to make ... ... middle of paper ... ...s. U.S. News & World Report, 11 Mar 2013. Web. 16 Mar 2014. . Auerback, Marshall. N.p.. Web. 16 Mar 2014. . Saltsman, Mechael. "Raising Minimum Wage Won't Lower Poverty." CNN Opinion. Turner Broadcasting System Inc., 16 Sep 2011. Web. 16 Mar 2014. . Smith, Vernon, Berton Abramas, Eric Abrams, Richard Adams, et al. Letter to Federal Policy Makers. "The Effects of a Minimum-Wage Increase on Employment and Family Income." Congressional Budget Office. N.p., 18 Feb 2014. Web. 16 Mar 2014. . The White House. Web. 23 Mar 2014. .

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