Ugh! Again! I can’t believe there is another increase in the minimum wage! I am a small business owner running the neighborhood coffee shop. It’s me, my wife, and 2 employees. I can barely afford to pay myself and I need to pay my employees $15 an hour. I sell coffee for a living, I can’t afford to pay such high wages and because of that, I need to fire my employees. They’re working to keep their family out of poverty, but I’m sorry to let them go. And for my customers because of the wage increase, to allow my business to work, prices have to rise. I can tell my customers getting angry and I know some that don’t even come again. This lack of business is causing me to shut down. All of this is thanks to this outrageous raise of a minimum wage. …show more content…
This is the imagined life of a business owner, he is an average man trying to keep his family up and running but faced with this huge increase in a wage. Many believe that raising the minimum wage will bring people out of poverty. In reality, more money in your pocket can cause more problems in the long run. The minimum wage should not be raised to $15 an hour because it can economically harm everyone. One way increasing minimum wage would hurt businesses is by forcing them to lay off their employees. The federal minimum wage is $7.25 and workers want to fight for $15 an hour, but it will result in high competition in the workforce (Lee).Business owners struggle to keep up with the growing minimum wage. This huge increase of a wage is abetting unemployment rates. In a study done by the Congressional Budget Office in 2016, a Nonpartisan Analysis for the U.S. Congress reported the effects on employment of an increase in the Federal Minimum Wage. The reports found that even an increase to $10.10, nowhere near $15 an hour, an estimated 500,000 employees out of 1 million will be out of a job ("The Effects of a Minimum-Wage Increase on Employment and Family Income”). As these minimum wage workers are “ ...these workers are young teens — half are under 25, she says — who are working jobs supplemental to their families’ income; poor families they are not necessarily”(Pathe). Resulting in workers being cut from their only source of income for the family. Making workers compete with older and more skillful workers because business owners want skills that match up with the high price. As wages rise, it will keep low-skilled workers out of the labor market and owners will have to hire fewer workers since they won’t be able to pay for more. Employees think the owners are purposely holding down on minimum wage, but the unrealistic wage of $15 an hour the money will now go to the top performers to stay under the operational cost of a business and then everyone else will be let go. As employees look at fast-food outlets like McDonald's demanding to get “fair” pay because these multi-billion dollar companies are thriving while workers are suffering ("Minimum Wage Protests Occur across the United States”). But they are neglecting small business. A mom and pop shop can only afford so much for employees. Usually, neighborhood shops are barely scraping by, but now having to pay an employee $15 an hour, they will have to shut down. Hurting employees and owners when their business, usually their only source of income is gone. If we don’t increase the minimum wage you can still enjoy a cup of joe in your local coffee shop, served by your favorite employee. In addition to the higher unemployment rates, raising the minimum wage would increase the price of goods consumers buy harming consumers.
So don't count on that cup of coffee being the same price if the wages go up. Economists always follow a rule when calculating price and wage increase relationship: when fast food wages go up by 10 percent, prices should increase by an average of 0.7 percent (Abramo). So as we raise the wages, prices of consumer goods will go up. Take a cup of coffee such as, “NBC News found that the price of a cup of coffee went up by 10 to 20% in Oakland, California, after a 36% minimum wage hike in the city to $12.25”(Abramo). When businesses have to use higher wage workers they need to furtively increase the prices on menus and product, but you will definitely notice the difference in the long run. To hire a $15 an hour employee, the cost of that employee will shift to customer products and services (Lee). When the minimum wage is up to $15 an hour, workers will have more spending money, boosting demand for goods. But minimum wage workers will face higher prices in the market, thus putting their high pay to higher priced products. And some business owners who hire minimum wage workers, whose customers can't afford to pay higher prices, would fail, again offsetting gains with lost jobs. You are then spending your money thinking that you can buy more but you can’t. Then you still end up with what you would have had if you spent on the item before
inflation. Furthermore, with an increase of wages, employees’ government benefits will go down and tax payments will go up. The higher monthly income is higher only temporarily. When tax season approaches, almost 90% of that monthly income will disappear. According to James Sherk, MA, Senior Policy Analyst at the Heritage Foundation, a single mother working full-time and earning the federal minimum wage of $7.25 an hour would be over $260 a month worse off if the minimum wage was $10.10. Her market income rises by $494, she loses $71 in earned income tax credit refunds, pays $37 more in payroll taxes and $45 more in state income taxes. She also loses $88 in food stamp benefits and $528 in child-care subsidies ( Sherk). That is 91% tax rate on her $494 monthly income! Even with an increase minimum wage, employers adjust their expenses, like social care cost. Minimum wage going up in the legislation causes a rising cost of social care due to a cut of government grants to up to 40%, the highest cut since 2010 (Worstall). These not-for-profit companies who run care home services do not get enough from the government to pay their staff at a $15 minimum wage, forcing many to close. This demand of $15 minimum wage is doing more harm than good, creating enormous tax increase and a decrease in government benefits. Not something you want to hear, especially the average minimum wage worker who relies solely on government subsidies for insurance or food stamps or their full paycheck to pay rent. However, people believe minimum wage of $15 an hour is beneficial because it could lift millions of Americans out of poverty. One of the biggest reasons of poverty is the overwhelming numbers of people working in low-wage jobs. Making it difficult for families to earn a livable income from the jobs available that are usually minimum wage. But changing the minimum wage to $15 an hour is not a realistic solution to fixing the problem. In a report by Pew Research found that “Today’s minimum, which works out to $15,080 a year (assuming a full 40-hour work week), will lift a single person out of poverty. However, it’s near $1,000 below the poverty threshold for a one-adult, one-child household” (DeSilver). Although estimates are that this increase could move 900,000 people above the poverty threshold that is nowhere close to the 45 million people who are under the estimated threshold poverty in 2016 (Desilver). We don’t need to raise the minimum wage only to lift 2% of Americans out of poverty. Overall, we should not raise the minimum wage to $15 an hour because it forces businesses to lay off employees, increase prices of goods, and decrease employee benefits and increases taxes. If the thought of waging the minimum wage to $15 an hour would be gone, the economic effects will disappear from everyone. Activist for $15 an hour believe that $15 an hour wage is necessary to bring people of poverty and augment their income, but what they don’t know is that this drastic change will come at a cost. To save yourself from paying overpriced coffee and your local boutique from closing down, don’t support the minimum wage raise. Instead, educate people on the bad economic effects when raising the minimum wage to $15 an hour and expunge the ridiculous wage change. We need to step up for your local businesses and not support the fight for $15 an hour.
Many people against raising the minimum wage create arguments such as, “it will cause inflation”, or, “ it will result in job loss.” Not only are these arguments terribly untrue, they also cause a sense of panic towards the majority working-class. Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has consistently increased, even when the wage has been
The common argument takes beginner's level supply and demand graphs and uses them as the basis for the claim. The basic elastic supply and demand graph shows that as the cost of a good increases, demand for that good declines. Thus, if the minimum wage increases, businesses will face higher costs, will pass those costs onto consumers, will suffer lower profits or will reduce employment, or some combination of these negative outcomes. The author here is pointing out that the world is a heck of a lot more complex than that. Microeconomics does not end with the study of rudimentary supply and demand graphs, but incorporates a broader range of considerations into its arguments.
Him having this experience made him bring up a point saying, that every business with minimum wage employees has to respond to this one way or another and i quote, “ Those who say raising the minimum wage will have no effect on employment are dreaming.” For example, if the minimum wage is raised to $15, for most businesses like Brodsky’s, that will be the entry level pay which will cause them to cut certain things out whether its employees, supplies, etc. to stay in business. Thus, making it obvious that raising the minimum wage will cost jobs one way or another. But on the other hand, why have a business if they can’t keep up with the demands of the employees? Why should a person pursue a business if they can’t pay their workers the money they deserve, considering the majority make a living off of the job. Do people ever think about just simply making changes to the business, whether it’s adding a new feature or upgrading the overall quality of it. For example, something like a restaurant can add in special day of the week where they serve a particular dish just on that day, which will bring in more profit because of supply and demand. Another example, for business more like a store, the owner or employer can expand their range product sold in the store; if they sell hats, shoes, and clothes, maybe then they could range out and add in book bags for the school time or even accessories. There is always alternatives to bringing in more profit when needed, instead of just cutting
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.
If not, then you are going to be paying a worker who works in a fast food industry the same has a construction worker or a customer service representative,both of whom earn $15 dollars an hour. In the article, How raising the minimum wage ripples through the workforce by Ben Zipperer, he discusses how an increase in minimum affects the wages of other companies. He states, “In particular, economic theory suggests that increasing the minimum wage will raise the wages of other workers…” An increase in the wages of other workers will dramatically affect other businesses negatively because they have to pay a higher labor cost. Since they have a higher labor cost, this might cause businesses to look for alternative measures in order to lower their labor cost.These alternative measures might include giving fewer hours to their employees, raising their prices, or shutting down, in the case of some smaller
Poverty continues to grow in America. The average minimum wage in the United States is $7.35 an hour- far too low in today’s society. Key expenses, for example, gas and housing prices, have gone up significantly since the minimum wage was last changed in 2007 (Wagner 52). The laws creating the minimum wage were intended to improve the standard of living and decrease poverty. Raising minimum wage is a vital step in decreasing poverty and giving every family the opportunity to survive and succeed. Millions of hard-working Americans are below the poverty line and need an increase in pay. Minimum wage must be raised because it will diminish poverty and assist the working class to support their families.
Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people earning little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. It has become the easiest way for people to receive easy pay. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. There have been many arguments going on, "Should minimum wage be raised or should it be lowered or eliminated altogether?" 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. It may increase poverty, but those
The NALS indicated a very strong relationship between low skilled workers and low wages. These statistics show that achieving a moderate to high level of functional literacy is crucial for an individual to escape low wage jobs. Approximately 65% of workers who took the NALS scored at level 3, the middle category, or higher. Of this 65%, only 3.5% of men and 6.5% of women earn low wages or live with a low income family (Lerman).
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. If the minimum wage increased and businesses/employers have to pay those higher minimum wages (higher salaries/income) to their employees. To offset them having to pay more money to their employees, they offset that extra cost to the customers or consumers generally who shop with them. It creates a ripple effect for a city, county, or region. Prices have been going up without the increase of minimum wage so imagine when if I does happen to go up. Increasing minimum wage will definitely hurt small businesses more than
If the minimum wage increases, those people that are skilled and well trained with salaries over the minimum wage could feel the competition from those unskilled workers who will have a raise. These high skilled employees could demand a higher rate, making things even more difficult to a business owner. Therefore, an individual must build experience and knowledge through out the minimum wage; in addition, a well-experienced worker has higher possibilities to get into a better position with a higher income. In addition, education is a fundamental milestone in any individuals’ life in which holds the roots of success; a well-educated individual could have a broader window of success and a job that gives him or her a peaceful life. The economy of the US can be harmed if the minimum wage increases. In addition, restaurant chains’ owners could look into technology improvements to prevent the hike in the workers’ wage. As Lydia DePillis in her article on the Washington Post writes, “Many chains are already at work looking for ingenious ways to take humans out of the picture…” she argues that technology already has led thousands of workers from in many airports, grocery stores, tollbooths, gas stations, banks, and automotive factories jobless and similarly could occur if the minimum wages keeps growing. Some big-chain restaurants could
The minimum wage being too low has been a public issue in America for generations. Basically, the debate includes two different opinions. Firstly, people who want to raise the minimum wage, and second, people who would rather is stay the same. The overwhelming majority of liberals are on the side that favors a raise. Additionally, a somewhat smaller proportion of conservatives favor the change as well, but for different reasons. The liberal opinion on raising the minimum wage is based on the idea that putting more money in the people’s pockets, will stimulate the economy, and decrease poverty. The problem that conservatives and liberals alike have with this, is that a few direct consequences are proven to apply when raising wages. Some proposed consequences include unemployment, inflation, and unfairness to higher educated people. Another main point is that raising the minimum wage is thought to helps small business by increasing worker satisfaction. This issue of minimum wage has become increasingly popular and important in current times, as president Obama has proposed the idea of raising the minimum wage of contract workers to 10.10$ per hour (about a 30% increase from the current 7.25$ per hour minimum wage). A large number of people consider this wage hike unnecessary due to the fact that today’s value of minimum is higher than it has ever been since the 80’s, and because the wage hike comes at too high of a cost. All things considered, the issue of raising minimum wage is not a battle of political parties and their agendas, its really a debate between everyone.
For many people in the United States, life is no more than a regular work cycle. Members of working class usually have a High School diploma and may work in a low skilled occupation or manual labor. Most of the enjoying age of this people is spent in working, as they don’t want their new once to have a life they struggling through. Therefore, this essay will argue that minimum wage should be increased federally to $15/hour by 2017. Firstly, if taxes touches the sky, why should the minimum wage be on the ground? Increasing minimum wages would also create new opportunities for education as the students wouldn’t have to work crazy hours. Likewise, many couples won’t have to work multiple jobs in order to manage the household. Lastly, it will lift
Who here works a minimum wage job? Now who here that works a minimum wage job wants minimum wage to be raised? Well the following things what I’ll be saying in this speech might change your mind. Unemployment rates will increase. Why you make
Many critics claim that that raising minimum wage increases unemployment, especially for unskilled workers, and harms small businesses, including grocery stores and restaurants. The argument declares that companies such as these rely mostly on unskilled workers for labor, and if the minimum wage increases, then their profits and, therefore, hiring would decline, creating a...
However if wages go up soon everything else will to clothing, food, gas, rent, etc. making it hard for some to adjust. According to Sherk, “In equilibrium the average fast-food restaurant would have to raise prices 38 percent.” This would be to compensate for the salaries paid to workers. David Cooper mentions in his article that “It would provide a modest stimulus to the entire economy, as increased wages would lead to increased consumer spending, which would contribute to GDP (Gross Domestic Product) growth and modest employment gains.” But why would people spend more if prices go up at the same time minimum wages increase. On the contrary it would be smart that people would want to save more