Opponents of this matter may argue that increased labor costs lower overall profit for businesses (Mejeur 15). However, this argument overlooks the outweighing factor of the workers’ new potenti... ... middle of paper ... ...t jobs is completely negated and the benefits of raising millions out of poverty and workers receiving generous pay increases far exceed any drawbacks. An increase of the minimum wage is the ideal step in preserving a dynamic yet economically sound society. Works Cited Dickinson, Tim. "The Minimum Wage War."
A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects. In the 2013 State of the Union, President Obama proposed raising the minimum wage from the current $7.25 to $9.00 by 2015. This has caused arguments between the rich, small businesses, minimum wage workers, and the unemployed because it affects each of them differently. Obama’s plan is to bind the minimum wage to the cost of living, which ensures that minimum wage goes up with inflation.
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.
One way that can be seen right off the bat, is that employers would have to pay their workers more money. Having to pay the workers more money in wages would increase the expenses for the company and decrease the profits and business owners/employers would not be too happy about this. Another problem that would arise for the employers is giving raises. There
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.
An increase in labor costs would be met with higher consumer prices because companies would have to offset the upturn in wages. If an employer is forced to pay their workers an additional 10%, the employer will have to raise the price of their goods or services by 10% to recoup the cost. Many small businesses operate on razor thin profit margins and having to pay additional wage costs could mean the end for many of these small