Even though, the average wage of a worker in a low-income family is lower compared to the average wage in a high-income family, the correlation between being a low-wage worker and being in a low-income family is quite weak. David Neumark states three reasons for this. First, based on 2014 data from the Current Population Survey (CPS), a majority (57%) of poor families with heads of household ages 18–64 have no workers. Second, some workers are poor because of low hours and not low wages; for example, 46% of poor workers have hourly wages above $10.10, and 36% have hourly wages above $12 (from CPS data). These workers would not be directly impacted by a minimum wage increase if we discount the consideration that minimum wage increase would spill
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.
According to the American Enterprise Institute, it is stated by president Obama that increasing the minimum wage: “would alleviate poverty”. The president is certainly correct, this wouldn't help everyone. As the information given: only 11.3% of the people will get beneficiated by this raise. Why this? People who don’t work are the ones in poverty; and because firing some its workers, there will be more poverty than there was before. And if the case is that a company keeps their employees… the people
A full time worker earning $7.25 an hour will make approximately $15,080 a year (“Minimum Wage”). That’s barely more than what students pay for housing and food at some colleges, and we expect a family to live off of this? The poverty line is at $20,000 for a family of four, so how are these people supposed to raise their children in a healthy environment while working full-time to not even be on the poverty line? If this raise is done correctly, employment and prices won’t be hurt, and we will only be helping our nation’s hardest workers. “Katrina Gill is a certified nursing aide. She monitors 28 patients from 10:30pm to 7am, checking vitals, preventing bedsores, and changing diapers. She makes $14,400 a year with no benefits. She currently has $160,000 worth of medical debt from her son’s cancer care” (Conlin). “Joseph Schiraldi guards the Empire State Building, one of the biggest terrorist targets in the world, for eight hours every-single day. He makes $7.50 an hour in the nation’s most expensive city with no pension, no health care, and no sick days” (Conlin). How is it fair that hard-workers are forced to live below poverty, when raising the federal minimum wage would not have any major negative effects on our economy? Although some people believe that it is unnecessary to raise the federal minimum wage, while looking at the facts it is necessary to realize the benefits it would bring.
More specifically, only about twenty-three percent of minimum wage workers live in poverty (Economics 21, screen 1). Many of the people working minimum wages are astonishingly young; a little over half are between the ages 16 to 24 (Desilver, screen 1). To make another point, sixty-four percent of those working minimum wage only work part-time (Desilver, screen 1). With this information it is easy to see that most of the minimum wage workers are young and working for experience or to start paying for their own things.
An increase of a couple of dollars per hour or more in the minimum wage could make huge improvements in the difficult existence of the working poor, perhaps allowing them to exit the debt treadmill and stand a better chance of eventually rising into a revitalized middle-class. Researchers at the White House Council of Economic Advisors found that an increase to $10.10 an hour would raise wages for 28 million Americans about nine million of those due to the ripple effect. “According to a 2015 report from the National Low Income Housing Coalition, a worker must earn at least $15.50 an hour to be able to afford to rent a modest one-bedroom apartment, and $19.35 for a two-bedroom unit.”
minimum wages are struggling to live on a salary that is below the poverty threshold. In 2012, the U.S census posted that in a family of three; their income is 18,552, (U.S Census). In most case, one member of the family is working on a minimum wage salary which is below 18,552, (U.S. Dept. of Labor). It has been almost a five years since congress has raised the minimum wage (Huff Post). Throughout my argument, I will share my thoughts as wells as facts on why congress should agree to raise the minimum wage. We
"In fact, data from CPS suggests that the majority of poor families with heads of household of prime working age simply don’t work, so a minimum wage has no impact on these families." (Durden). The correlation between minimum wage and low-income families is weak. There are alternatives that could be more economically efficient for low-income families. It would be a delusion to think that raising the minimum wage would be the most economically efficient way to help low-income families.
Family income is the most direct way to evaluate poverty today. As previously stated, approximately 46.5 million Americans were living in poverty as of 2012. Currently, there are two proposed increases to the FMW from $7.25 standing at $9.00 and $10.10. According to the Congressional Budget Office’s (CBO) projections for 2016, there would be a net income increase of $5 billion for families under the poverty threshold by today’s FMW standards. They also project the increase would lessen the income of families making more than 6 times the poverty threshold, or approximately $116,000, by $17 billion. This creates a $12 billion dollar imbalance making headway in diminishing the gap, and while in the grand scheme of American inequality this is not much, it is needed progress. Economist David Neumark addresses the potential for this exchange in his article “Do Minimum Wages Fight Poverty?”. He writes about the trade off that might happen alongside a FMW raising, stating “over a one- to two-year period, minimum wages increase both the probability that poor families escape poverty and the probability that previously nonpoor families become poor.” Purely in terms of the FMW, this exchange in revenue could lessen the
Since minimum wage workers are primarily the poor or lower middle class of America, a raise in the minimum wage is meant to help exactly those people. In Are Minimum Wages Fair?, a 2012 American Enterprise Institute article, Aparna Mathur and Michael R. Strain argue that the minimum wage shouldn’t be raised, because it is fair. The authors state, “ If on balance raising the minimum wage finds fewer people working and more poverty, then it is hard to argue that raising the minimum wage is fair.” This quote directly correlates to the previous article, because the authors are stating that the minimum wage is fair as long as it doesn’t rise. A rise in the wage will cause people to lose their jobs. The authors’ logical appeal enables them to cross their point to their audience very effectively, because they imprint a sense of logic in the audience’s thought process. The use of an “if, then” statement causes the audience to accept the authors’ claim, because it is presented as common sense. The authors go on to state, “In addition, the minimum wage doesn’t primarily affect the poor. Many poor Americans are unemployed and are obviously not helped by increasing the minimum wage. Among people who do work, only a tiny fraction of them are employed in minimum wage jobs, and many of those are teenagers from middle-class families.” The authors make a convincing point in this quote. They state that the point of raising the minimum wage is to help out the poor and lessen the gap between the rich and the poor, but most poor people aren’t employed. This ultimately leads one to accept that raising the minimum wage wouldn’t positively affect many people. Although this is the logical side of this argument, the truth is “poor” is a technical term. This article classifies poor as living in poverty and being unemployed. However, as stated in the
Even with the hike of minimum wage to $7.25, workers were still $3,000 under the poverty level. An average family of four would be $6,000 under the poverty line. There is a popular belief that most minimum wage workers are teenagers. The truth is that 79% of minimum wage workers are 20 or older.
Low minimum wages affects everyday families and lives, more than the average person would think. A small minimum wage could have an very small effect on someone’s life, such as not being able to afford a new pair of boots or that new phone, contradictory to this low wages could also have a very serious effect on someone’s life . Meaning that a parent or single individual could not support their family because a lack of income, it could also mean the difference of living under a safe roof, or living in the streets. In 2016 alone, 40.6 million people in the United States
The poverty levels in America are a major problem. The cost of things like rent and education have risen dramatically in the recent years, making it difficult not only to live, but also to become a skilled worker with a lot to offer companies. Unfortunately, minimum wage has not kept up with rapidly rising prices. People working on minimum wage cannot support themselves, much less a family. Many think that the problem can be easily solved with a raise in federal minimum wage, but those people fail to understand the many trade-offs that would accompany. Not only would a minimum wage raise to 15$ have a major effect on employers costs and the cost of goods, but it would also cause a major rise in unemployment(Gitis and Holtz-Eakin). A raise in minimum wage would not only fail to move the lower class out of poverty, but would have adverse effects on the majority of them.
With the budget project, I was able to see there is a major difference between career income and minimum wage income. I have realized that I get more of my desires and necessities with my career income. After taxes, I still have enough money to pay bills and do leisure activities, and I am able to have all of the essentials that are needed in life without going into debt. Basically, I can take delight in what I do with my life.
As stated by Ramirez, et al., “...there is no statistical significance between minimum wage and poverty rate.” From an international standpoint, Gindling also repeats this in terms of developing countries using similar reasoning. Poverty, however, while still a major issue within the United States, may be easier to fight here due to the laws keeping most people non-exempt from the minimum wage. Additionally, poverty is not the main target of a minimum wage increase; rather, a minimum wage increase allows for upward mobility among those who are struggling now, which over generations can resolve poverty.