The reason it would increase unemployment rate is because the well-known industries and companies would rather hire higher-skill workers instead of people who have no experience. Which would mean people who do not have those skills would have a harder time getting a job. Furthermore, industries and companies become highly competitive against each other and which can also cause unemployment. According to the article “The Minimum Wage: Getting to $15” business will also get hurt by raising the minimum wage. The higher the minimum wage would make it almost impractical for American companies compete with other low-paying foreign countries.
More jobs will be created for skilled workers but will destroy jobs for low-skilled workers. Politicians promise workers $9 per hour, but that promise can not be kept if employers fire or don’t hire workers who low skilled. Most importantly, if low skilled workers lose their jobs or can’t find jobs making minimum wage, their actual income will be zero.” (James A. Dorn). So if minimum wage is increased the job market could be destroyed for those in the lower class and for the unskilled workforce. “Evidence shows that when the minimum wage is increased there will be less jobs and a more unemployment especially in the long run.
With a hike in the minimum wage it would be harder for businesses to hire new employees or even keep the ones they already have. As an affect of the minimum wage hike, businesses would have to raise prices, hire fewer workers, reduce the number of hours employ...
Therefore, increase in minimum will hurt the budget due to more money having to be put in programs and cause the nation more debt. Minimum wage increase will have a negative effect. Businesses will have to cut jobs or increase prices, so they will stay in business without losing any money. Also the nation’s budget will hurt due to more money going into different programs of unemployment and bankruptcy. Though others feel that an increase of minimum wage will cause workers to have more money in their pockets, minimum wage should not be increased because it will increase prices, cut jobs, and hurt the national budget.
In some cases, they will use more skilled workers to replace all the lower skilled ones to make the increase more profitable (Wilson 8). Some places even talk about using machines instead of people or moving production overseas That would cause a lot of backlash to the American people. Similarly, small businesses simply cannot afford to keep as many employees as they need. It forces them to fire their help. After some time with fewer workers, they are unable to stay open.
This is somewhat related to my second reason on why minimum wage should not increase in the United States. Companies are going to raise their prices on their products. They will increase their prices in order to be able to pay all of their employees. That situation will cause the employers extreme anxiety due to money issues. Companies may have to eventually shut down if they are not able to pay their employees like they need to be paid.
But high school and college students are not the entire percentage of minimum wage earners. When minimum wage is raised, it affects the entire economy in many different ways. First, raising minimum wage affects the amount of job availability. Many businesses will reduce their amount of employees, because the business will not be able to afford to pay all the employees and still gain profit. As a matter of fact, James Sherk, a Bradley Fellow in Labor Policy, states “Businesses will not hire workers whose labor produces less than the cost of hiring them” (Sherk 2).
This essay will argue that the government should distribute subsidies for some people who are able to work, but cannot find a jobs to reduce economic problems, improve the standard of living of the unemployed, and even reduce crime. Unemployment basically means people who lack of seeking jobs. “The unemployed are people able, available and willing to work at the going wage rate but cannot find a job despite an active search for work” (Riley, 2012). Unemployment occurs when an expansion in demand rates, while the economic growth goes downward and layoff starts increasing because of a depression from the economy (Hardman, 1999). High rates of joblessness are the main obstacle that is damaging the social development as a whole.
If some individuals are living below their means due to low wages, forcing employers to pay a minimum wage seems like a direct remedy. However, evidence proves that a minimum wage might not be the best way to benefit the poor; in fact it is quite possible that it is actually hurting them. After the invisible costs employers must incur it makes it harder to expand the company and open up new positions, which in return hurt the chances of low skilled workers such as college students. While minimum wage is on the rise, the standard for the value one must bring to a company becomes that much higher.
(See Figure 1) Losing jobs is a serious issue because the unemployment rate would rise. This makes it harder to lower an unemployment rate because you have just raised it. Less people would be able to find jobs as well. When it cost more money to hire low-skill workers, businesses suffer. For example, fast-food chains rely mainly on low-skill workers.