Raising the Minimum Wage: A Counter-Intuitive Solution

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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). For example, in response to California's raising of the minimum wage to $10.10 an hour by 2016, the fast food chain Jack in the Box announced that it would 'increase menu prices either 1.4 per cent just in California or a little less than one per cent across all its restaurants'. To put this amount into perspective, the Cheesecake Factory announced that amongst its California restaurants (accounting for one fifth of their total restaurants), it expects to sustain a two to thre... ... middle of paper ... ... raising of the minimum wage is not in their best interest. Works Cited Congressional Budget Office. "The Effects of a Minimum-Wage Increase on Employment and Family Income." Congressional Budget Office, 18 Feb. 2014. Web. 22 Apr. 2014. Morath, Eric. "Should the Minimum Wage Be Raised? Economists Weigh In." The Wall Street Journal. Dow Jones & Company, 30 Jan. 2014. Web. 23 Apr. 2014. Sherk, James. "What Is Minimum Wage: Its History and Effects on the Economy." The Heritage Foundation. The Heritage Foundation, 26 June 2013. Web. 22 Apr. 2014. Tull, Tony, and Mark Segraves. "Walmart Says It Will Leave D.C. Unless Mayor Vetoes Wage Bill." NBC4 Washington. NBCUniversal Media, LLC, 12 July 2013. Web. 27 May 2014. Wong, Venessa. "When Minimum Wage Goes Up, The Menu Price Also Rises." Businessweek.com (2014): 1. Business Source Premier. Web. 22 Apr. 2014.

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