Minimum wage is the lowest amount of payment permitted by law. It protects wage workers from being ripped off or taken advantage of, and if a company wishes to pay them more, then they are free to do so (Cornell University Law School). There’s a political movement that’s currently sweeping across America calling for a raise in minimum wage. Many wage workers want to make more money, which would mean redistributing the income of a company; taking some away from other aspects of the business and giving it to the workers. The hope behind this idea for supporters is that raising minimum wage would be a way out of poverty or financial hardship for them and their family. The average minimum wage for states throughout the country ranges from $7.25 …show more content…
In fact, there’s numerous reasons why raising the federal minimum wage would be harmful to American businesses, workers, and consumers. For starters, if the minimum wage were to be raised, then companies would respond to the added payroll by laying off employees, including teenagers who are attempting to find a starting job (The Effects of a Minimum-Wage Increase on Employment and Family Income.). If companies choose to keep their employees, then they’re forced to either raise the prices of their products in one form or another, or they have to cut benefits to their workers (Sean Williams). Regardless of which way companies would choose to adapt to the new minimum wage, it wouldn’t be a good situation for …show more content…
Another response in having to pay workers more money, businesses would have to raise the prices of their goods to compensate for the income they’d be losing in the payroll. For example, a study performed by Purdue University in 2015 found that by raising the wages for fast food employees to $15 an hour would result in a 4.3 percent price increase and raising the wage to $22 an hour would increase prices by 25 percent (Greg McClure). Increasing wages would not only hurt workers and businesses, but it would also be harder on the consumer, as shown in this study. Obviously, this study only appeals to fast food services, because as a result of higher wages the company would have to charge more to make up for it. However, the same principle would apply to any other kind of consumer good as well. Each business would need to respond to higher wages, and the two best options include cutting job positions or raising the cost of the goods being sold. A similar study performed by NBC News found that in Oakland, California should cost 2.5 percent more after minimum wage was increased to $12.25. A coffee place called Farley’s Coffee raised prices from anywhere between 10-20 percent, which is around 50 cents more for a cup of coffee (Allegra Abramo). Clearly as the numbers show, these are some big price increases, despite the fact that they’re being applied to
Currently, in the United States, the federal minimum wage has been $7.25 for the past six years; however, in 1938 when it first became a law, it was only $0.25. In the United States the federal minimum wage has been raised 22 times since 1938 by a significant amount due to changes in the economy. Minimum wage was created to help America in poverty and consumer power purchasing, but studies have shown that minimum wage increases do not reduce poverty. By increasing the minimum wage, it “will lift some families out of poverty, while other low-skilled workers may lose their jobs, which reduces their income and drops their families into poverty” (Wilson 4). When increasing minimum wage low-skilled, workers living in poor families,
These are just a few of the many awful effects that raising the minimum wage brings. When workers hear a raise in the minimum wage, all they think about is a bigger paycheck and not what will happen to low-skilled workers, the cost of living, and the added stress to unemployment rates. New workers with less skills will have a harder time finding a job. The cost of living is going to hike due to inflation. Unemployment rates will rise due to added stress on businesses. An increase in the minimum wage is great news to a high schooler saving up to buy a new phone, but terrible news to someone trying to raise a family. If the minimum wage continues to increase, these problems will get worse instead of
Small businesses operate with little capital and net profit margin. Opponents argue the increase of the minimum wage affect the small business owners the most because they have a hard time paying employees. The oppositions believe increasing the minimum wage creates a market distortion (“Federal Minimum Wage”). It means the government intervention in raising the minimum wage causes a higher price floor that defines as the minimum price for the employees’ service. Because of a higher price floor, it reduces the employment opportunities and business profit. For instance, according to Mark Wilson’s “The Negative Effects of Minimum Wage Laws”, he writes about a study conducted by Barry Hirsch and his co-authors about the methods of how employers adjust to a newly imposed minimum wage. In their study, employers cushion the impact of the minimum wage increase by “requiring better attendance, insisting that job duties are completed faster, imposing additional task on workers, minimizing hours worked with better scheduling, and terminating poor performers quickly.” In addition, businesses try to push the rising cost to consumers, which result in increased competition from imported goods. This makes them less competitive. The negative side of increasing the minimum wage affects employers, employees, and customers since study suggest every dollar bump to minimum wage workers come from the business owners’ or clients’ pockets; in addition, employers impose more job responsibilities to
It is time, the labor market is taking advantage of humans and it must come to an end. For the sake of protecting the people, the minimum wage should be raised. The minimum wage is a tool that was introduced in the 20th century to protect workers from abuse. Today, that is very much not the case. American workers are subject to jobs that pay their workers the bare minimum. In the wealthiest nation on Earth, no person that works full time should have to live in poverty. At the 1912 Progressive Party, Theodore Roosevelt told the attendees: “We stand for a living wage, enough to secure the elements of a normal standard of living, a standard high enough to make morality possible, to provide for education and recreation, to care for immature members
There are indeed risks of raising the minimum wage, but the rewards outweigh those risks, so the minimum wage should be raised. Some people who are against this may say ...“But other economists say raising the minimum wage actually hurts the very people it's designed to help: One of the basic laws of economics is that if you raise the price of something, there will be less demand for it. In this case, if you raise the price of workers, the demand for workers will decline. That could mean companies cutting the hours of employees, laying them off, or hiring fewer workers in the future.”... Yes, it could hurt the people it is designed to help, but different states have done this and found the opposite to be true. With America’s still fragile economy we need a boost, a helping hand; And this could be it. So next time you go down to vote on a mayor or maybe even the next president, remember that raising the minimum wage is a good thing, and you should be supporting
Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people earning little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. It has become the easiest way for people to receive easy pay. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. There have been many arguments going on, "Should minimum wage be raised or should it be lowered or eliminated altogether?" This action has its pros and cons. It can benefit many families as living cost has gone up, price for education is rising, and college students are in huge debts. It may increase poverty, but those
Many people against raising the minimum wage create arguments such as, “it will cause inflation”, or, “ it will result in job loss.” Not only are these arguments terribly untrue, they also cause a sense of panic towards the majority working-class. Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has consistently increased, even when the wage has been
Going to college to get that higher education can be very costly especially if you don’t have financial aid to help you pay some of your cost of classes and books. The cost of transportation can be costly especially if you’re taking classes every day. The cost of gas has gone up so this could affect people from going every day if they live far from their job and to the school they attend. You have to think about the loans. What happens when you’re done with school and you have to pay back any loans you took out? This is a really big issue for those who still have an under paid job after college. As David Card, Berkeley and Alan Krueger looked into the effects of minimum increases for fast food worker, as they state “they have seen an increase instead of decrease.” Many people have seen a lot online lately on how McDonald’s employees want $15.00 an hour. So many people disagree on this because those people probably didn’t graduate high school, and it compares to those who have spent the time and money on getting a college degree. Yes these people need to make a decent living but not a higher wage from those who should be making that much. Each state needs to look at what type of business, what the education requirements are, the type of training, and then make a decision on the type of pay should be for that job. You can’t pay an accountant with a degree $10.00 an hour but, a bagger at a grocery store is making $11.50 an hour without a degree and didn’t finish high school. There should be some kind of law that makes it fair for everyone but at the same time allow those who have a higher education make more. If people were making a decent wage they wouldn’t be so hard on their bosses for a pay raise and many people wouldn’t want to quit. Business owners know that when and if minimum wage rises how it would affect their
The minimum wage has always been a controversial subject that has more and more people debating about the subject. While the talk about minimum wages are highly popular it is an important subject to get informed about if you’re an employee or employer because it has to deal with your money. What is minimum wage? Minimum wage is the hourly wage an employer can pay an employee for his or her work. While the talk about raising the minimum wage has caused some attention in both negative and positive. Nevertheless, the topic that the minimum wage offers substantial benefits to low wage workers without any negative effects to business owners has a growing view among economists.
Most people during their lifetime have worked for a company in which they received minimum wage, I know I have and I am only 19 years of age. Well in 2013, 3.3 million people of the American workforce made the minimum wage, and of that 3.3 million people, nearly fifty-five percent were adults over twenty-five years old working full-time. With the current minimum wage at $7.25, there is no doubt that it is not sufficient to support a family with that amount. Although many people and many industries believe that the minimum wage should be raised to as much as $15 per hour, raising it to that level may be extreme. Minnesota raised its state minimum wage from $8 per hour to $9 per hour for companies making over $500,000 annually, effecting more
About eight million Americans go to work every day, yet they are still living below the poverty line (Camden and Stern). More than one million of them are retail workers. If the minimum wage was to escalate, 734,075 people would be lifted out of poverty. Also the 769,191 people that are living on or near the poverty line would see their incomes go above it by 150 percent. These workers are struggling to provide basic necessities for their family and themselves. If minimum wage was increased poverty could be reduced. Most families are relying on government assistance to provide things such as food by using an EBT food stamp card and Medicaid because they are making minimum wage. Also if a minimum wage worker is only making $5.15 per hour, it will be impossible trying to afford health insurance. Sometimes the benefits workers receive don’t always cov...
In the United States, there has been a big debate on minimum wage between the two main parties known as the democratic and republican parties. First of all, the main concern since 2009 is that the minimum wage has been of $9.00 dollars and many liberals and a few republicans believe that it should be raised to $15 dollars. In the last couple years, it has been argued that the minimum wage is not enough to meet ends meet in the United States. This topic regarding the raise of the minimum wage is important for a few reasons. First, democrats believe that the minimum wage today is no enough to help people with their bills, or to help them have a better life. Therefore, they want to raise the minimum wage to $15 dollars in order to help these people
On the other side of the argument Americans believe that with the increase of minimum wages it would help Americans out a lot more. One possible way that the increase in minimum wage may help an individual out is in the article Minimum wage Pros and Cons, “The Economic Policy Institute stated that a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period. Though this may be true, one problem
Raising the minimum wage will prove to be detrimental as it will take away opportunities from high school students to gain insight and explore different career options. Additionally, it will also reduce the unemployment rate, making it harder for the working poor to meet their basic needs in order to survive. Thereby, raising the minimum wage is not a feasible option because it will only deteriorate situations for the labor
Many areas could be affected by a change in minimum wage, but potentially the most drastic change would be to unemployment. Advocates of a higher minimum wage insist that a raise would significantly decrease the unemployment rate in the United States and improve the quality of living. However, there are conflicting opinions on this. Higher minimum wage would mean higher labor costs for business owners, thus making it more difficult for employers to maintain the amount of workers they have, let alone add new employees. Raising the minimum wage does not increase the value of the worker's labor; it increases the cost of the worker's labor. As a general rule the more something costs, the less of it people will buy. This is true of not only consumer goods but also of workers in the labor market.Many jobs come from large corporations but they also come from small businesses.There are 23 million small businesses in America, accounting for 54% of sales and 55% of jobs. Raising the minimum wage means that all of these corporations and businesses will have to dig deeper in...