Does the Minimum Wage Increase the Standard of Living for Low-Income People?

To begin, there is an extensive debate over whether if the U.S were to raise minimum wage, could it really help the working poor of low income families. Nancy Cook, in her article from the National Journal, “Why a Minimum-Wage Hike Can’t Help the Poor”, she points out that two thirds of around 100 surveys from 2007 had a negative effect and that it does more for the middle class than the lower one. (p.14). So, therefore, from her

Jason Furman and Parrot Sharon explain why raising minimum wage will help families. The wage has to be elevated to just the point where a family can actually afford all the necessities they need in order to survive. The cost of living in houses for poor people makes it difficult for them to afford it and is difficult to stay on task with all the bills. Many minimum wage workers have families to support. The cost of raising children is very expensive. It is an average of $7,100 per year. Minimum wage workers can barely afford to pay child care for one child, let alone two. Increasing minimum wage will also make life easier to those who have food stamps and child care needs. Which can also help them get into college a lot faster so they can go out and pursue a better paying job.

Ira Knight, who is an author of article “Let’s Make the Minimum Wage a Living Wage”, expresses an opinion that increasing the minimum wage would help all struggling workers and at the same time improve U.S economy. On the other side, Janice Steele in her article “Keep the Minimum Wage Where It Is” argues that raising the minimum wage would have bad effects on workers, consumers and small businesses. Ira Knight’s article seems to be the stronger of the two positions because her arguments are based on several recent studies, and last but not least, she had a personal experience with the minimum wage job.

One of the main arguments made by those in favor of raising the minimum wage is that there are studies showing little to no effect on the employment rate as a result of the increase. In the study “Why Does the Minimum Wage Have No Discernible Effect on Employment?”, author John Schmitt makes the statement “…Two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers” (John). Those in favor of the raise explain that although it may not decrease unemployment necessarily, it would improve the living conditions of those who are already employed and working for a wage that is too

As our federal government debates the idea to raise the minimum wage, there are several interesting questions that occur. Most importantly, should we raise the minimum wage? I believe it is a bad idea to raise the minimum wage from $7.25 per hour up to $10.10 or more in a short period of time. I will explain why raising minimum wage radically would kill jobs and hurt our economy.

Next, another problem the rise of minimum wage poses is the rise of inflation. If employers are required to pay their employees more, then they need to do something to compensate for the extra money they are losing. With this in mind, employers would have to increase the prices of goods. But sometimes raising prices is not an option for employers. “If a business cannot simply pass along its new labor costs, it must somehow absorb them—by eliminating workers rendered unproductive by the new minimum wage, by replacing labor with more-productive machines, or by cutting production” (Intorduction 2). This brings back the issue of minimum wage causing a dramatic increase in unemployment. Sherk believes it is the wrong time to increase minimum wage, due to the fact that America is currently in a recession. The right time to think about raising minimum wage would be when the unemployment rate drops drastically. Sherk states “In 2007, Congress voted to increase the minimum wage, raising it in three $0.70 increments from $5.15 to $7.25 an hour. The final installment represents a 10 percent increase in the cost of hiring minimum wage employees” (Sherk 1). Seemly inflation and minimum wage increases influence each other.

The controversy over minimum wage has been ongoing. However, as explained in a Time article by Chris Lu on the subject, now is the prime time to raise the federal minimum wage. “Three out of four Americans support an increase; the economy is healthy; and many employers are already raising wages.” It’s reasonable to be worried about the consequences that raising the minimum wage might have in a time of crisis or unrest, but this quote mentions a healthy economy that would be able to handle the shifts in wages if things went south temporarily. Another argument made by opposers of raising the minimum is that businesses will be unable to survive. On the contrary, a good business will find it beneficial. “‘It’s a simple, but critical, concept: take care of your people and they will take care of your customers.’ For &pizza, higher wages reduce employee turnover, increase productivity and improve customer service.” Rather than hurting the economy, raising the minimum wage will help workers, business owners and the economy itself. A higher wage for all is

The minimum wage debate brings about a range of reactions from different people. There are those who believe that there shouldn’t even be a minimum wage and that wages should be determined by the markets. On the other hand, we have those who vigorously argue for increasing the wage minimum citing inflation, the poverty line and worker productivity. Regardless, we do have a federal minimum wage rate in the United States at $7.25 per hour, with some states having a higher minimum wage than the federal minimum. President Obama, in his first state of the union address of his second term proposed “Tonight, let’s declare that, in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9 an hour” (The White House 2013). A year later, he has revised that number to $10.10 per hour after signing an executive order that has already raised the minimum wage for federal workers to that number. (The White House 2014). With more and more states raising their own minimum wage, a minimum wage increase seems almost imminent with Democrats and Republicans getting closer to a deal. (Bolton 2014). But we are more interested in the efficiency of a minimum wage implemented at the federal level. The main question that surrounds this debate is whether this price floor in labor markets is efficient given that the stated goal of the minimum wage is to make sure full-time workers earn a living wage and are above the poverty line.

Figure 7.6 shows how the minimum wage creates a price floor. The difference between the wage rate and the amount of workers needed is unemployment. Figure 7.7 shows the potential loss of labor demanded by businesses. This could become a positive statement to say that raising the minimum wage will increase unemployment. "Recent research reveals that, despite skeptics’ claims, raising the minimum wage does not cause job loss." (Cooper and Hall). An

The United States economy is still soft and prone to falling apart, and there is a debate that is on going as to whether the minimum wage should be increased or decreased. The minimum wage is a well known price floor, and that is what we need for our economy right now . I personally believe that we should not increase the minimum wage, but decrease it instead. I would rather have the minimum wage lowered than increased because that will only lead to negative side effects. For example, if the minimum wage is increased then the government will need to mint more money and the effect of minting more money is inflation. This will cause the American dollar to go down and worsen the economy even more. Another thought is that what the United States needs now are jobs. If the minimum wage is increased then existing jobs will want their workers to have more experience and for those people that are in dire need to a job will have a lower chance of getting the job because they

The topic on whether the minimum wage should be increased our untouched has been a hot topic in the media and political scene lately. Both the republicans and democrats have spent some big bucks lobbying their insights on the matter. There has been a lot of subjective and objective arguments that are reasonable on both the pros and cons of increasing our national minimum wage. To add to the drama associated with this topic, President Obama endorsed a bill proposing a nearly 40% rise from $7.25 to $10.10 per hour. The President has been campaigning around the country ever since his State of the Union address, pushing congress to raise the minimum wage to $10.10 an hour. Many say this is too high due to the costs of enacting such an increase, and many say this is a little low due to the increased cost of living. After looking into both sides of this debate, I realize that overall it would be better for the well-being of our nation to increase the minimum wage due to the short term and long term costs that an increase of the minimum wage could lead to. In terms of helping out the lower class and poor citizens of the United States, increasing the minimum wage level is not the answer.

The push for higher federal requirements for the minimum wage in the United States, as a means of combatting income inequality, have remained a highly debated topic of discussion over the course of many years in the United States. On one side of this debate you have more progressive economists who believe that if minimum wage is increased the standards of living for many minimum wage employees will be improved, thus spurring economic prosperity for this class of workers and helping to bridge the gap in income inequality. On the other side of the spectrum you have more conservative economists who believe that with an increase in minimum wage there is also an increase in the number of unemployed workers along with a plethora of other downsides due. There is also economic findings that verify the belief that minimum wage laws also discriminate against unskilled workers in favor of skilled workers, and the most serious amount of discrimination takes place among minority communities. It would certainly eliminate jobs. By demanding that business pay workers more, it will in turn force them to hire less workers in order to keep up with their new payroll costs which in turn would further the migration of jobs from humans towards automation. In theory the minimum wage hike would definitely benefit workers who would receive that wage, but for those workers who are fired and would become unemployed due to the wage hike, it aches their economic shortcomings evermore. Increasing minimum

While there are facts that say otherwise, these people believe that an increase in pay would motivate more people to work, therefore, bringing more people into the workforce. Others view that an increase in the minimum wage will provide these workers with an increased income, which would make these families better off and put them above the poverty threshold. On another side, many Americans living in poverty cannot afford housing due to the increase in value on the home market. Minimum wage workers already have low homeownership, and the minimum wage has no effect on the recovery of the housing sector. Furthermore, these individuals believe that the since the value of the minimum wage is at a 40 year low, that increasing the minimum wage will bring more value to the dollar. The Americans who are for an increase of the minimum wage are failing to see what an increased minimum wage would do to employment rates and the economy, which eventually leads back to the national poverty rates. Contrary to popular belief, increasing the minimum wage will have negative effects on the United States and will not decrease the national poverty rate (United States: Minimum Wage has Little Economic

Opponents of raising the minimum wage suggested better ways to address poverty, because of the lack of progress of this issue of raising the minimum wage, they suggested providing income tax credits for low-income workers or tax policies that encourage low-income families to gradually develop and save money.

The most prevalent and steadfast myth surrounding the raising of the federal minimum wage is that it will doom the economy. This might seem logical at first, but just think about it for a second. Why do minimum wage employees need more cash? The answer is simple: To spend it, to buy the things that they and their families need to survive. “Most minimum wage workers need this income to make ends meet and spend it quickly, boosting the economy. Research indicates that for every $1 added to the minimum wage, low-wage worker households spent an additional $2,800 the following year” (Fair). Furthermore, EPI estimates that if the federal minimum wage were raised to $10.10 an hour, it would result in over