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Positive and negative effects of minimum wage
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Why we should not raise minimum wage summary
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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” …show more content…
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
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
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 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.
It is time, the labor market is taking advantage of humans and it must come to an end. For the sake of protecting the people, the minimum wage should be raised. The minimum wage is a tool that was introduced in the 20th century to protect workers from abuse. Today, that is very much not the case. American workers are subject to jobs that pay their workers the bare minimum. In the wealthiest nation on Earth, no person that works full time should have to live in poverty. At the 1912 Progressive Party, Theodore Roosevelt told the attendees: “We stand for a living wage, enough to secure the elements of a normal standard of living, a standard high enough to make morality possible, to provide for education and recreation, to care for immature members
Some think that the minimum wage should not be raised, but others think that the minimum wage should be raised. If one had to be chosen, raising the minimum wage would be better. The minimum wage should be raised because if you were to work full time on minimum wage, you are below the poverty line; Also states that did raise the minimum wage above the federal standard have had more job growth than states that did not. Finally, "Minimum wage workers are much more likely to immediately go out and spend that extra money in the economy," says Heidi Shierholz of the Economic Policy Institute, which favors raising the minimum. "That's because they're often living paycheck to paycheck."
America is currently working on the issue of whether the minimum wage should be increased from $7.25 to $10.10 and economists are studying the effects of the possible increase. Minimum wage workers deal with struggles such as affording health care, paying for education, providing food for their families, putting many hours of work in while making little income and paying their bills. America’s decision to raise the minimum wage would help low wage workers to make higher incomes and would overall strengthen the economy, pulling Americans out of poverty. Americans may hold a minimum wage job if they do not have money to attend a college or university to obtain a degree in order to find a career.
It is very difficult to live in America if you are living off of minimum wage, and many Americans are living off of it today. Raising minimum wages has its benefits like gaining more money to live better, but people do not see the down side of the increases in wages. With the increase in minimum wage, it also causes the cost of living to increase. How can this help the economy or help people? Minimum wages in America should not be increased because it will cause cost of living to increase, reduce employment, and cause businesses to lose money and workers.
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
“The minimum wage makes it illegal for workers to have a job paying less than the minimum wage, and it keeps employers from hiring anyone for less than the legal minimum wage even if people are willing to work for less. If the current minimum wage for low-skilled workers is $7.25 per hour, and Congress mandates a minimum wage of $9 per hour, workers who earn less than that will not remain employed or be hired. In the long run, as businesses switch to labor-saving methods of production, more low-skilled jobs will become useless. In anticipation of a $9-per-hour minimum wage, small businesses are already planning to switch to automated equipment, self-service and new software to save money because low skilled workers will have to be paid more. More jobs will be created for skilled workers but will destroy jobs for low-skilled workers. Politicians promise workers $9 per hour, but that promise can not be kept if employers fire or don’t hire workers who low skilled. Most importantly, if low skilled workers lose their jobs or can’t find jobs making minimum wage, their actual income will be zero.” (James A. Dorn). So if minimum wage is increased the job market could be destroyed for those in the lower class and for the unskilled workforce. “Evidence shows that when the minimum wage is increased there will be less jobs and a more unemployment especially in the long run. If a person ...
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 in America is currently set at $7.25. The Fair Labor Standards ACt of 1938 proposes raising it to $9.50, than a year later to $10.50. Although to many this may sound like a great idea; a little more money in your pocket, it will actually do more harm than good to those who fight to achieve it. If the minimum wage is increased, it will cause the price of products to also increased; due to the fact that the price of production and labor will be much more expensive. Another result of minimum wage increase would be the loss of jobs; especially in entry-level positions. The “minimum wage raise will do most harm to those at the bottom of the skills pool”, because it will be too expensive for employers to hire those without decent
Majority of businesses have difficulty budgeting their money and consequently, minimum wage allows business owners to innovate new jobs. Minimum wage should increase for business owners, so that a raise consumer buying power can occur. This means that the limit of a market or consumer can buy certain products, which benefits business owners. Economic recovery is another reason why higher wages support business owners.
As the debate over the implications of the minimum wage increase continue, the effect of the minimum wage increase on the economy and therefore society become just as varied.
We as a society are not to the point of no return and we must be able to make some changes to the way we are currently operating in order to right the ship and prevent some of these societal downfalls. There are a few ways that we can start fixing these issues without completely moving to a socialistic structure and still maintain our freedoms presented in American capitalism. The first thing we must do is determine a way to increase our education levels. “In 1979 the average annual salary for Americans with a college degree was 17,411 higher than those without, by 2012 that gap has doubled to almost 35k” (Bloom). With modern economics requiring more knowledge, access to education in more important. If we do not address this issue these problems are only going
Bernstein, Jared. “Would Raising the Minimum Wage Harm the Economy?” The CQ Researcher 16 Dec. 2005:1069.