MINIMUM WAGE

.docx

School

University of Florida *

*We aren’t endorsed by this school

Course

3024

Subject

Economics

Date

Feb 20, 2024

Type

docx

Pages

8

Report

Uploaded by HighnessRam7334

Isabel Jurado-Blanco 1 Does Increasing Minimum Wage Help Workers? Isabel Jurado-Blanco Santa Fe College
Isabel Jurado-Blanco 2 Does Increasing Minimum Wage Help Workers? One of the most disputed arguments in America is whether the minimum wage should be increased to $15 per hour. According to the Labor Law Center, the average minimum wage for workers in America is $7.25 per hour. The legislature that is being considered suggests that the minimum wage be increasing as the years go by until it reaches $15 by 2025. Vast research has been done to understand whether increasing the minimum wage in America is the best choice for its citizens. However, before getting into the evidence let’s understand why and how America had its minimum wage established. According to the Legal Information Institute, the federal minimum wage was formulated by Congress in 1938 under the Fair Labor Standards Act (FLSA). It was originally set at $0.25 per hour and has been increased by Congress 22 times, most recently in 2009 as it went from $6.55 to $7.25 an hour as stated in the U.S. Department of Labor. The minimum wage was originally made to alleviate the post-depression economy and protect the laborers in the workforce. This hourly payment for labor was designed to make a minimum standard of living to care for the health and well-being of the workers and prevent people’s exploitation. However, as the monetary value drops with inflation, the minimum wage is said to not be enough to sustain the minimum standard living conditions of a person. Because of this, most people support a $15 federal minimum wage. The Pew Research Center conducted a study and surveyed 5,109 adults. They concluded that “about 62% of U.S. adults surveyed say they favor raising the federal minimum wage to $15 an hour, including 40% who strongly back the idea. 38% of adults, however, opposed the proposal. But what side of the coin is correct? Advocates of a higher minimum wage explain that the current national minimum wage of $7.25 per hour is too low for anyone to live on and therefore should be increased to $15 per hour.
Isabel Jurado-Blanco 3 These people believe that the increased minimum wage will aid in the creation of jobs and the growth of the economy. These proponents also reason that the declining value of the minimum wage is one of the primary causes of wage inequality between low and middle-income workers. Also, they explain that increasing the minimum wage would increase worker productivity. The opponents of the raise suggest that if the minimum wage is increased, businesses will not be able to afford to pay their workers more, will be forced to close, lay off the workers, and reduce hiring. Moreover, the increases have shown that it will become more difficult for low- skilled workers with little to no experience to find a job. Adversaries of this wage increase claim that poverty levels would rise, young adults may be shut out of the workforce, high school enrollment rates would decrease, and drop-out rates rise. Let’s start with why raising the minimum wage would spike job growth and improve the economy. In 2013, the Economic Policy Institute stated that “minimum wage increases from the current rate of $7.25 an hour to $10.10 would inject $22 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period” (Cooper, 2013). So, imagine what it would do if the minimum wage was raised to $15 an hour. It would be twice the amount. Furthermore, economists from the Federal Reserve Bank of Chicago predicted that a $1.75 rise in the federal minimum wage would increase total household spending by $48 billion the following year,   hence boosting the gross domestic product (GDP) and leading to job growth.   Moreover, the Congressional Budget Office shows that the income gains resulting from the wage increase to $15 an hour are substantially greater than the reduction in income from job losses, lifting nearly a million people out of poverty, and therefore improving the economy. However, there is the belief that raising the minimum wage would force businesses to lay off employees and raise unemployment rates. In October 2020, the Employment Policies
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help