Negative Effects Of Raising Minimum Wage

Imagine the challenges and obstacles individuals face when they only receive $7.25 an hour to help support themselves and their families. Raising minimum wage could potentially have positive effects on individuals and businesses, but it could also have a negative effect on employment and production costs. Many people argue over the effects of raising minimum wage and how it will affect individuals and most importantly businesses. Many individuals consider raising minimum wage could potentially affect unemployment and how it will increase the prices of production. Others argue that increasing minimum wage is a good idea because it will help many individuals financially and help our economy grow. Also, Others argue that minimum wage should be

According to a research done by Reich, an economics professor at the University of California, he states, "It’s estimated that a 25.9 percent increase in the minimum wage from $6.75 to $8.50 would result in a 1.1 percent increase in the overall wage bill. When viewed from the perspective of operating costs, a 26 percent increase would result in 82.0 percent of establishments experiencing an increase in operating costs of less than 1 percent or more, and 95.2 percent experiencing an increase in operating costs of less than 5 percent. “(Local Minimum Wage Laws: Impacts on Workers, Families and Businesses). The information from the research shows how increasing minimum wage will affect many businesses dramatically because their expenses are going to increase; as a result, they would have to fire people so they can maximize their profits.
Raising minimum wage will affect most individuals without any job skills or experience. According to a research done by Jonathan Meeks and Jeremey West of Texas A&M University, it showed how minimum wage will reduce net job growth by hampering jobs creation in expanding industries. (Maybe raising the minimum wage isn’t such a good idea after all). The effects of raising minimum wage is especially strong for younger workers and in industries with higher share of low paid workers because businesses

Lowering the minimum wage could help reduce production costs; therefore, more products will be created generating more revenue for businesses. Based on a research done by the Seattle Income Inequality Advisory, they estimated that 17.9 percent of restaurants would experience an increase in operating costs of 5 percent or more, as would 8.6 percent of retail establishments (Reich). Because of high wages, businesses will be forced to raise the production costs to make up for the workers’ expenses. Lowering the minimum wage could help solve this issue because businesses will spend less money on employees and the production costs would stay