I have come to the conclusion that, although increasing the minimum wage will have various effects on diverse demographics, increasing the minimum wage will ultimately benefit our nation. How would raising the minimum wage affect employers? On first thought, raising the minimum wage sounds like a no-brainer, but after looking at the situation with a little more depth, you’ll begin to see that it’s not so simple. For one, raising the minimum wage takes a toll on employers/business owners in many ways. One way that can be seen right off the bat, is that employers would have to pay their workers more money.
Opponents think by the sudden increase would reduce jobs slightly. The job losses to employers increasing prices to deal with the higher wage, which would lower demand and therefore their need for more workers. According to Reisman “the higher wages are, the higher costs of productions are, those who are unemployed else where and who are relatively more skilled will displace workers of lesser skill” (Reisman). His complaint is saying by raising the minimum wage they would have to raise the prices of their products. which makes the quantities of goods and services smaller.
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.
People think that raising the minimum wage can benefit people who have low-income. Well, known business and corporations do not want the minimum wage to increase, as of a result they will have to pay their employees more and corporate will lose money from paying their employees more. According to “Issue: Minimum Wage” (Marcia Clemmitt) “Business owners in some labor-intensive, low-wage industries face serious uncertainties when minimum wages rise.” Also, companies would rather pay a teenager and not an adult because adults would complain about being paid minimum wage. Adults make a living off of what they earn teenagers have a job so they can have extra money when they go out. If minimum wage increases that means that everything will be more expensive since their income is rising.
There are a couple explanations making a connection between increasing the minimum wage will create job opportunities in the united states. The key is that “poor and middle class families tend to spend more of their income than the wealthy, since they 're often struggling to meet basic needs” (Jordan Weissmann n.pag). So by taking money from businesses and giving it to their worst paid employees, raising the minimum wage might, in theory, increase consumer spending,which in turn boosts the economy and creates more jobs opportunities. According to the Economic Policy Institute, raising the minimum wage to $10.10 an hour “should increase wages by $35 billion and boost economic activity by $22 billion—which by their account is enough to create those 85,000 jobs” (Jordan Weissmann
One harmful factor that raising the minimum wage will do is increase unemployment. Many Americans argue that minimum wage will not increase unemployment but will decrease it because it promotes more interest for people to work. However, this may be true but what if people that suddenly were motivated to look for a job cannot find one due to the businesses not accepting employees. These businesses might even decrease the number of employees in their labor thus increasing unemployment. Consequently, many businesses will do this when minimum wage is increased due to increase in expenses by it to keep the business running.
Small businesses will be in more danger than large business will be. Majority of small company’s pay their workers the minimum wage, while employees at large businesses are paid by salary. Due to the increase in the federal minimum wage, small businesses will receive less profit for their company, will have to lower their employee count and teenagers will have a decreased opportunity to get an entry level job. With an increase in minimum wage, businesses are going to see a decrease in their profits. According to the Center for American Progress, “calculations show that prices would have to rise modestly and profits would have to fall in order to accommodate President Obama’s minimum wage proposal.” It is common sense that since the pay rate for employees is going to increase, than the business will be spending an increased amount of money on labor costs.
http://notatthedinnertable.weebly.com/uploads/3/4/1/1/3411210/5183225_orig.png Firms will retain more productive and higher paid workers, however lower skilled and lesser paid (those you intend to assist) will be shed. Those who lose their job will then require government benefits, such as unemployment compensation and welfare, to survive thus increasing government expenditures and debt. In the event that a firm does not fire workers the cost of the additional wages must be addressed. Typically the increased cost of doing business can be managed in two ways. The firm will transfer the increased cost to consumers by raising the selling price of its goods or
Furthermore, the more people spend, the better the economy so raising the minimum wage will boost our economy. And finally, raising the minimum wage will reduce the gab between the rich and the poor, which is also an issue in our nation. In America, the average salary of a middle class ranges from about $34,000 to about $64,000 per year. Raising the minimum wage will add more money to the middle class who work very hard but just for a little pay. If worker earn more money they will meet their family needs.
The government needs to raise the minimum wage as it raises the income of people, which saves the taxpayers money and allows it to be used on things such as schools and fixing roads. Also, increasing the minimum wage creates wage growth, which helps grow the GDP, as people have more disposable income. Lastly, increasing the minimum wage reduces the wage gap between the CEOs and working class, with the purpose of distributing more of the profits to the working class to help pay for health care and education. In today’s world of capitalism, there should be a cap on how much one can make in a year in order to help the working class, who ultimately help keep the companies in business.