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Raising Minimum Wage Essay

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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