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Positive and negative effects of the new minimum wages
Advantages and disadvantages of minimum wage increasing
3 positive and negative effects of a high minimum wage
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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. This being said, another issue would be that it will cause an increase in job loss. “Raising wages would boost employee paychecks, but it could cause cost-conscious companies to reduce hiring” …show more content…
This also means more taxes can be claimed back at tax time. Lower minimum wage means that there is less time for employee’s families and self-time, because they will have to work more overtime just to get that extra money on their paychecks. Having little family time due to working day in and day out, could cause families to fight and end up splitting. All-in-all raising minimum wage will provide happy employees, because they will be able to have more family time. No overtime would have to be worked unless they absolutely wanted to work more. It would decrease the huge struggle to support their families. It has not been proven yet, that a raise in minimum wage will cause job loss. Yes, higher pay would cause the hair on employer’s neck to stand up, but they should realize that higher pay will decrease the amount of overtime that they have to pay employees. Kimbra McCarthy in her article, “Raising the Minimum Wage-Coming Soon to A Community Near You”, mentions that, “While the U.S. economy has improved in the intervening years since the Great Recession, the federal minimum wage has remained at $7.25 per hour since 2009. At the start of 2016, 30 states and numerous local governments have enacted a higher minimum wage than the federal rate”
Well, raising the minimum wage has both the pros and cons. Still, the fact that increasing the minimum wage nationwide would increase millions of workers’ earnings is deniable. I suppose that’s why some people advocate raising the minimum wage will grow the economy for everyone. In 2014, the president of the United States, Obama, called on the current Congress to raise the national minimum wage, which proves that Obama actually supports raising the minimum wage. ‘February 2014 Congressional Budget Office Report The Effects of a Minimum-Wage Increase on Employment and Family Income is the latest attempt to do so, in this response to Members of Congress with respect to an increase in the federal minimum wage from $7.25 to $10.10 per hour.’
Throughout the decade, a continuous firing debate still remains, whether to raise the minimum wage or keep as it is. People believe that raising the minimum wage can hurt the economy. More will lose jobs than gain. Though all are true, the amount of poverty shown throughout the decades are jaw dropping. 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.
There have been many arguments going on whether minimum wage should be increased. 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. Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people to earn little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. It has become the easy way for people to get easy pay.
In my short life, I’ve worked two minimum wage paying jobs. My first job was as a fry cook at Chick Fil-a when I was 16, and my second and current job is at Sports Authority. Minimum Wage is defined as “the lowest amount employers can their employees for each hour of work.” As minimum wage paying jobs, they were looked at, in my case anyways, as a way to have some extra pocket change and gas money. And that is the way most Americans view jobs such as fast food: as a place for teenagers to make money throughout high school and college and maybe even learn the value of a dollar.
In 1938, the United States Congress endorsed the first federal minimum wage through the Fair Labor Standards Act, (FLSA), which established a rate of twenty-five cents per hour. Originally the minimum wage only pertained to employees involved in interstate commerce, which consisted of the manufacturing, mining and transportation industries. But, in 1961 an amendment was passed to expand the minimum wage to other industries including construction, retail and service businesses. Since then, coverage has expanded to include close to 85% of the current workforce, and the wage rate has been increased 22 times. (Wilson, 2012). However, the minimum wage does not automatically increase in proportion to the cost of living because it is not indexed to inflation (Smith, 2009).
The arguments for and against the minimum wage have been ongoing. On one hand, it’s simply a supply and demand issue. As prices (or wages) rise, the demand for that product (or labor) decreases—in other words, employers will simply stop or slow down their hiring. If the minimum wage increases too much, then it could even force some smaller firms out of business. Then even more people will be out of work. On the other hand, better paid employees could feel more motivation to increase their productivity. And increase in a company’s productivity could be high enough that, in order to keep up supply, it might need to hire even more employees. In this case, raising the minimum wage has increased employment.
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. 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.
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
The shockingly low minimum wage in America is borderline unethical. Since the minimum wage was established in 1938, there’s been controversy about how much it should be. It was originally set at an amount that would allow workers to maintain a minimal standard of living (30 Days). Since then, the minimum wage has been raised 22 times, but this hasn’t been enough to support the same goal. Not only has inflation made minimum wage worth significantly less, but the cost of living has gone up. Two thirds of American citizens support raising minimum wage again (Mantel, 76), but some still oppose it, saying it would hurt jobs and the economy. Although raising the federal minimum wage would most likely cause some jobs to be lost, it should be raised because of the positive effect it would have on poverty rates, the economy, and the individuals living on it.
One way raising minimum wage will be beneficial is that it could lift many Americans out of poverty. Raising the minimum wage in Illinois, would help the families of more than 1.1 million workers who work to meet their children’s basic needs and “reduce the adverse effects of poverty on a child’s well-being” (Fiscal Policy Center). Studies have shown that raising the minimum wage would help 1 in 5 Illinois families who are in poverty. By raising the minimum wage in Illinois, it would help workers with families spend money on food, housing, gas, and other needs without going into poverty. Along with puling Americans out of poverty, raising the minimum wage could also stimulate economic growth. Raising the minimum wage, is stimulating economic growth by worsening the income inequality and substantially reducing the employee turnover for the business. Increasing a person’s income would raise their yearly earnings by $3,640 and “Improve the economic security and reduce the economies poverty rate” (Fiscal Policy Center). Low-wage workers spend most of what they earn on their basic needs, which is quickly spent and does not leave the worker with much money left to spend on other needs. This boost in the minimum wage will stimulate the economy and help create opportunities for more people, by hiring more workers to keep up with the
Raising the minimum will end up hurting Americans more than helping them. The people that are for raising minimum wage are people who believe that increasing minimum wage can help those people who are unskilled and need an income they can live on. Yet, raising minimum wage would do the opposite and make employers have to fire people who earn minimum wage, because they can't afford the higher wages. People need to realize that increasing the minimum wage would hurt people more than help them. In the end increasing minimum wage would result in some people being let go, for the reason, businesses can't afford paying them minimum wage anymore.
One of the present and current implications of an increased minimum wage will be the workforce it attracts. Even with the increased minimum wage the job is still a minimum skill job, but with more applicants. Students out of high school unaware of the current workforce situation see a shining hourly wage and would rather start making money now than two to four years later. Economics Dr. John Perry explains the economic principle, Law of Demand in the realm of minimum wage, “The Law of Demand tells us that as the wage (price) of low-skilled/unskilled is artificially increased through legislation, the quantity demanded for those labor services by employers will fall,” and says this isn’t the main contributor to the jobless rate (Perry, aei.org). Dr. Perry goes into more depth about the economic principle, Law of Supply, which would primarily affect high school aged
Raising the minimum wage will prove to be detrimental as it will take away opportunities for 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 force.
Minimum wage has been a topic that has divided our nation for a while now. Some say there should be an increase in the minimum wage while others say the should not be. In my Argument today, I will be in support for the raising of the minimum wage. If the minimum wage is to be increased, it will provide low-income family with money to spend. 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.
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 life. 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 it people will buy.