The Pros And Cons Of Minimum Wage

“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.

This is somewhat related to my second reason on why minimum wage should not increase in the United States. Companies are going to raise their prices on their products. They will increase their prices in order to be able to pay all of their employees. That situation will cause the employers extreme anxiety due to money issues. Companies may have to eventually shut down if they are not able to pay their employees like they need to be paid.

The higher the minimum wage would make it almost impractical for American companies compete with other low-paying foreign countries. Another reason raising the minimum wage would decrease unemployment because according to High Pay, Fewer Jobs (Douglas Holtz Eakin and Ben Gitis) “The other two models point to even bigger losses, indicating that a $15 an hour minimum wage would lead to 432,200 and 588,000 fewer jobs under the “medium impact” and “high impact ”scenarios, respectively.” Additionally, according to COUNTERPRODUCTIVE: The Employment and Income Effects of Raising America’s Minimum Wage to $12 and to $15 per Hour (Douglas Holtz-Eakin &Ben Gitis) “$15-per-hour minimum wage could mean the loss of 6.6 million jobs” which in that case would not help the economy or the

With every minimum wage increase in the past, inflation has also risen. Since minimum wage affe... ... middle of paper ... ...inflation arises which causes the cost of living to increase. Every solution people seem to offer to resolve the issue of minimum wage all seem to point towards the rise of unemployment. Minimum wage increases do not actually benefit the poor, as implied by politicians. In reality, minimum wage increases only help the middle class.

The effect of a surplus drives down an individuals reservation wage, as they are willing to do and take anything for work. Minimum wage only makes this fact more severe, as it increases the supply of workers. Minimum wage increases the cost of doing business, and unfortunately in today's economic conditions employers are not able to pass on the extra costs to the consumer. Minimum wage is not helping workers, it is hurting businesses, and to maintain any profit, and follow legislation companies have to cut labour costs somehow. Companies are being forced to take other alternatives because of higher labour costs for unskilled workers.

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.

Considering the poverty rate and poor living conditions present today, this vision is no longer being fulfilled. In order to create a nation with acceptable living conditions, lowered poverty rates and income inequality, and a stable economy, the minimum wage must be raised to a livable rate. Opponents of an increase argue that the economy would suffer, but the reality is quite the opposite. Economic conditions could be greatly improved with a rise in minimum wage, and that is exactly why this is an issue much larger than just the working class. Minimum wage affects all classes and has a large effect on the state of the economy.

For starters, due to inflation employers will begin to lose customers, causing them to raise the prices of their product. Moreover, employers are more likely to reduce the amount of employees they have, as well as the amount of hours their current employees work. There will not only be a reduction in the amount of low wage workers but in higher wage workers as well. Higher wage workers will begin to demand an increase in their wage due to an inflation in the economy. Another disadvantage would be the lack of importance in gaining a college degree, or even graduating high school, due to being supported by a minimum wage job.

The majority of America would like to see the minimum wage raise from $7.25 an hour, to $10.10 which is almost a forty percent increase in hourly rate. A decision this big that will affect the entire country must be intensively discussed and debated before it is put into action. In an economy consisting of unemployment rates at their highest in decades, one would think that this would be a good action to take, but the consequences of doing so show otherwise. President Obama and the Democratic party are lead supporters of the idea to raise the minimum wage to help out those families living below the poverty line, but it will do as much harm as it will do good. "President Obama's call to raise the federal minimum wage could help lift 900,000 workers out of poverty, but at a cost of as many as 500,000 jobs" (Davis).

That is in fact one of the leading factors. As there is yin and yang, the demand for a higher minimum wage is no coincidence or selfishness as others perceive as is. The poverty shown throughout the decade is deadly prominent. Minimum wage should be raised as people are not gaining enough money compared to the past, despite with more education, too many low quality jobs, “in active” unemployment are outcasted from the statistics, and finding jobs is more difficult than it was decades ago. One dollar and sixty cents do not sound a lot.