Minimum Wage Debate Analysis

The minimum wage debate is nothing new for economists. The battle to identify the effects on American workers and the economy will continually be at the center of contention. The current research conducted on minimum wage debates clearly identifies those who support the increase and those that are opposed. As President Obama supported a Senate bill increasing minimum wage from $7.25 to $10.10 per hour; low wage workers began protesting for higher wages up to $15.00 per hour. Some of the studies published found that minimum wage increases may not have a big impact on the economy as other studies published showed that the workers would not benefit from the wage increase. Proponents who support the minimum wage increase suggest this is

An article written by R.A. suggested that “raising minimum wage will force employers to pay more to existing workers forcing companies to lead to sackings”. (R.A., 2014) Opponents also raise concerns that politicians who support the increase will potentially impose higher wages that the economy can’t support causing layoffs impacting our unemployment. A 2007 published study revealed contrary data of proponents showing that minimum wage will in fact hurt lower wage workers. Another 2010 study conducted presented facts that a higher wage will drive down GDP in the lower skilled industries. Many of the workers receiving minimum wage fall into the categories of younger students or people working a 2nd job to support themselves and their families questioning the compulsion to increase minimum wage as a whole. An analysis conducted by Christina Romer, supported conservatives who believe a better way to help low wage workers is through the earned income tax credit. This provides low income families with a financial payout through the Government even though this comes with a level of controversy too. The concerns raised when wages are increased is how do companies handle the impact on the business. Smaller companies will struggle to compete with big companies who can handle the increased wages and ultimately put the cost back on the consumer

This topic is something I have been interested for some time. When we have a national raise of the minimum wage, especially up to $15.00 an hour there has to be some type of inflation to support this. In an unstable economy including the fall of 2008, this could potentially send our economy spiraling down again. Companies would have to increase prices to support the wages they would be paying to their lower skilled workers. Where would this money come from? If theories suggested that the increase could cause potential layoffs we would have more Americans who require Government assistance. The United States budget deficit nearing $352 billion by 2018; the United States is not able to continue to provide assistance as it used to as programs are being cut. There is a lot of research on each side which can offer insight to each viewpoint, but I support the data that suggests the increase is not beneficial to our