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Economic benefits of raising the minimum wage
Economic benefits of raising the minimum wage
Economic benefits of raising the minimum wage
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"Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty... so join the rest of the country. say yes. give America a raise" (President Barack Obama 2014). This quote depicts that not a single human being that works hard at their job should ever have to be poor. This idea among many was part of President Barack Obama's state of the Union Address for 2014, promoting while seeking, a year of change to all American citizens. As a citizen of the United States, one knows the economic hardships and unemployment rates increasing. There needs to be a stop to these inclines, especially towards the poor and those becoming more educated with college. This is why I, for one agree with President Obama on raising the minimum wage to $10.10 an hour. Raising the minimum wage slightly from $8.25 to $10.10 (only $1.85 increase) will have a huge impact on Americans today and even future Americans. Increasing the minimum wage to $10.10 an hour will aid millions researchers say, through the economic values of food prices, small businesses unemployment rates, college students coping with college debt, and the poor living in a state of poverty.
To begin, the ideas of small businesses and unemployment rates walk hand especially for the owners themselves when deciding to hire or fire their workers. Many economists believe that increasing the minimum wage will be able to reduce the percentage of unemployment rates slightly, which here in America is a big deal. One researcher, Paul Krugman a Keynesian economist states, "There just isnt any evidence that raising the minimum wage....would reduce employment. And this is actually the solid result, because there have been a lot of studies." Krugman displa...
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...bama stated in his 2014 state of the union address, 2014 is a year promoting change. In addition, the new minimum wage would allow the poor to gain jobs making more money to provide for their families financially. Small businesses will not have to let anyone go because in the long run financial inabilities will become obsolete and business will be making more money not losing.
All in all, raising the minimum wage to $10.10 contains many positive benefits including aiding with unemployment rates, raising food prices pennies to help the economy, and financial benefits towards students seeking a higher education at Universities. The next step is to wait out the process as the new bill has already been passed with 87 votes in the House of Representatives. In America it is essential for no one to live in poverty or not receive the higher education that they dreamed of.
Imagine a world where you are working overtime, seven days a week, yet your kids are starving. You can’t get the education you need because you don’t have the time and money to afford it, and you can’t change jobs because this is the only one you can get. Unfortunately, this is the reality for millions of Americans living today. The federal minimum wage is too low to help families, and actually mathematically speaking, too low to survive on. The quality of life for minimum wage families is terribly low, and that is unacceptable. As humans, we should be looking after others and helping the poverty come out of their continuous cycle. Raising the minimum wage would not only help families be able to afford a better quality of life, but help them to afford healthy food, get an adequate education, and invest in the necessary health care they need.
Minimum wage is a topic that has been popping up since the 1980s. From whether we should lower it, or even raise it, but now in the 2000s minimum wage has been the center of attention more than ever. There are two sides to this topic of minimum wage; whether it creates more jobs or does not create jobs. Those who argue that raising minimum wage will create more jobs will have a rebuttal which is that it does not only cause the loss of jobs but that it would make things much worse and vice versa for those arguing raising minimum wage will cause loss of jobs. There will be two authors representing opposite views, Nicholas Johnson supporting minimum wage will not cost jobs with his article “ Evidence Shows Raising Minimum Wage Hasn’t Cost Jobs”
In the article, “Let’s Make the Minimum Wage a Living Wage” by Ira Knight, he argues how the economy would benefit from a minimum wage increase and he uses a lot of studies to back up his claims. Janice Steele, however, argues that raising the minimum wage will hurt small business and job opportunity. She uses fear to influence workers into not increasing minimum wage by making large generalizations. The article “Let’s Make the Minimum Wage a Living Wage” by Ira Knight and the article by Janice Steele “Keep the Minimum Wage Where It Is” both had good points. However, Ira Knight makes a stronger argument.
"The rich get richer while the poor get poorer." This quote was originally stated in William Henry Harrison's 1840 speech but sadly enough can still be used today to describe our economic downfall and crisis. With California currently holding a minimum wage at $10 many argue that this just isn’t cutting it anymore. One of the only ways to live prosperously on this income is to work, relentlessly, day in and day out. With many people living day-to-day and paycheck- to-paycheck, it is safe to say that the place minimum wage is right now is not working for most of the nation. With our developing economy, standards of living, unemployment rate, and debatable employee morale, it just seems right to increase the minimum wage.
While some believe that raising the minimum wage will resolve poverty issues and lack of pay with the signing of legislation, the raising of the minimum wage to $10.10 an hour (as advocated by President Obama and the Democrats) would cause the poverty issue to be worse than it already is; inflation would occur, employees would be laid off, and minimum wage employees would lose welfare benefits, thus offsetting the wage increase. The Government should consider the effects on the American economy as a whole, as opposed to just considering the wage at which certain individuals are paid. While some might argue that raising the minimum wage would provide for a 'living wage', the raising of the minimum wage would result in significant inflation, which, in turn, would increase the cost of living; offsetting any wage increase. According to the Wall Street Journal, economists struggle to agree on whether or not 'wage floors', e.g. the Federal minimum wage) stimulate, or suppress economic/job growth (Morath). However, the point of view of those favouring a raising of the minimum wage is incomparable to the reactions of businesses to both enactment of minimum wage legislation, and discussion of minimum wage legislation (that is, legislation raising the minimum wage).
On the other side of the argument Americans believe that with the increase of minimum wages it would help Americans out a lot more. One possible way that the increase in minimum wage may help an individual out is in the article Minimum wage Pros and Cons, “The Economic Policy Institute stated that a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period. Though this may be true, one problem
President Obama has approved a plan to increase the Federal minimum wage to $10.10 an hour by 2016. There are those that believe raising the minimum wage will benefit low wage earners and boost their families over the federal poverty line. However, others believe that it will negatively affect the same group of people it is proposed to help. Many believe unemployment will increase due to less job opportunities and employees being let go, and businesses will be put in danger. 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.
In this article, the author talked about increasing the federal minimum wage in Washington which Obama favors to be 10.10 $ an hour. He mentions a long with the 16.5 million workers that a 10.10$ minimum wage would help directly through changing. This change would improve the family incomes of more than low wage workers and above the poverty line. Additionaly, increasing wages is good for business because the gross domestic product(GDP) will comes up. Furthermore, a minimum wage could affect consumer price and higher-wage earnings.
Opposite argues that increasing the minimum wage would cause businesses to cut off employees and would not boost the economy, this is false because the increase in minimum wage will boost the economy by an “increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period.” (Minimum wage) In addition, the opposite side may view that “raising the minimum wage would increase the price of consumer goods,” but this will not happen because “the federal minimum wage is not indexed for inflation, its purchasing power has dropped considerably since its peak in 1968.” (Minimum
"Raising the minimum wage will benefit about 28 million workers across the country. And it will help businesses, too - raising the wage will put more money in people's pockets, which they will pump back into the economy by spending it on goods and services in their communities." -- President Obama
("The History of Welfare") “Low income families make up 60 percent of those receiving food stamps, and 47 percent on Temporary Assistance for Needy Families (TANF). According to a 2014 report “Local Minimum wage laws: Impacts on workers, families and businesses” from the University of California, The authors concluded that the enrollment in public assistance programs coincides with the federal poverty level and that increasing the minimum wage reduces public assistance, participation.” They suggested that a 10 percent increase in the minimum wage reduces food stamp enrollment by anywhere between 2.4 to 3.2 percent ,and reduces program expenditures by 1.9 percent. During President Obama’s 2014 state union address, he urged Congress to increase the minimum wage to $10.10. A report from the Congressional Budget Office projects that an increase in the federal minimum wage to $10.10 per house will result in higher paychecks for 16.5 million employees. Amongst those 900,000 individuals will rise above the poverty
“Of course, nothing helps families make ends meet like higher wages. … And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.”
President Obama is now backing a bill to increase the federal minimum wage to $10.10 an hour. According to David Cooper and Doug Hall of the Economic Policy Institute, “Increasing the federal minimum wage to $10.10 by July 1, 2015, would raise the wages of about 30 million workers, who would receive over $51 billion in additional wages over the phase-in period.” Would this really help get families out of poverty though? Not to the extent President Obama is hoping for. This is because not all of those who work minimum wage jobs live in poverty. In fact, a majority of these workers are not in poverty and also do not have dependents to look after.
...back. The District of Columbia and seven other states have already raised the minimum wage and 34 more states have started debates with their legislative represenives. Even the activists from 8 states are trying to get ballot referendums to demand minimum wage increase for the lowest paid workers this year 2014. President Obama has stated that “Nobody who works full time should be raising a family in poverty.” He has also said with the increase in minimum wage is” especially important for women.” Obama was pointing out that more than half of the people he is targeting to help are women.
However, there are those who see it completely the opposite way. Stating that by raising the minimum wage the economy would be better. More people would be able to support themselves; therefore lowering the percentage of poor people and raising the middle-class numbers. It is also argued that this change would not increase the number of unemployment, instead it could potentially raise employment by creating more jobs. Holly Sklar states in her research article, “Research by Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not.”