The same scenario would reoccur just as it did when the minimum wage was raised before: jobs would be lost. Prices would rise greatly, citizens would lose jobs, and more people will become reliant upon the government if the minimum wage is increased. None of these things are good for an economy, especially one that is already struggling. The consequences of raising the minimum wage rate are very severe.
“A 1997 National bureau of economic research study estimated that the federal minimum wage hike of 1996-1997 actually increased the number of poor families by 4.5%”(Henderson 54). A high minimum wage would also encourage people to become lazy thinking they can make all this money from an easy job instead of becoming better educated and trying hard to get a higher paying job. Therefore, raising the minimum wage would not help stop poverty or success. Not only does raising the minimum wage cause a high rate of teen unemployment because of employers not wanting to pay higher wages to inexperienced workers, it can lead to problems with teen education. “Some minimum wage advocated argue that teenagers should be in high school or... ... middle of paper ... ...e a smart move by the government because looking at the ups and downs of it; there are more negative effects.
(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.
Raising the minimum will end up hurting Americans more than helping them. The people that are for raising minimum wage are people who believe that increasing minimum wage can help those people who are unskilled and need an income they can live on. Yet, raising minimum wage would do the opposite and make employers have to fire people who earn minimum wage, because they can't afford the higher wages. People need to realize that increasing the minimum wage would hurt people more than help them. In the end increasing minimum wage would result in some people being let go, for the reason, businesses can't afford paying them minimum wage anymore.
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.
If hours are not cut and employees are not let go, businesses would be forced to fall. Minimum wage is not considered a livable affordable wage this is a problem for unskilled, uneducated people straining to start a career, or feed a family. To fix that problem the government would raise the wage to ignorantly short-term fix a problem, causing a long-term issue of inflation. Increasing minimum wage causes the worth of the dollar to decrease and ultimately causing inflation and rise of prices in all
It is very difficult to live in America if you are living off of minimum wage, and many Americans are living off of it today. Raising minimum wages has its benefits like gaining more money to live better, but people do not see the down side of the increases in wages. With the increase in minimum wage, it also causes the cost of living to increase. How can this help the economy or help people? Minimum wages in America should not be increased because it will cause cost of living to increase, reduce employment, and cause businesses to lose money and workers.
Raising minimum wage to a higher amount than what it currently is will increase the cost of living. This means that the cost of housing food, clothing, utilities, and even gas will rise. A raise in minimum wage could also cause businesses to have to close their doors due to having to pay employees more on their paychecks. Also this will give people a free pass to get a higher pay, but be able to slack at doing their jobs. A raise in wages will make cost in products go up, so then employers will not be able to afford to pay employees the higher minimum wage.
Therefore, not only the uneducated and the substandard workers would suffer from a rise in minimum wage but the companies and the government as well. When the minimum wage increases firms would have to diminish their labor force demanded and this would include firing employees that they currently employ. This will cause a slight rise in unemployment. There are many businesses that rely on entry level employees. These employee are paid the minimum wage.
Poverty in the United States will keep increasing if Congress does not raise the minimum wage as living expenses continue to rise. With expenses such rent and food, millions of people in the US are struggling to afford the necessities to keep them alive. In order to help the working and middle class, President Barack Obama wants Congress to raise the minimum wage from $7.25 an hour to $9.00 an hour by the end of 2015. Unfortunately, CEO’s and the Republican Party in the US are against raising the minimum wage because it will cut into the companies’ profits and claim that it will cause job losses. There are several benefits in raising the minimum wage, as it reduces the number of people in poverty which in turn reduces the government expenditures to support people living in poverty.