Negative Effects Of Minimum Wage

One of the biggest political topics in today's society is the federal minimum wage and whether it should be raised or kept at where it is now at $7.25 an hour. Arguments could be made for both sides on whether it should be raised or left alone. The majority of minimum wage in today’s job market are unskilled positions. Minimum wage jobs were created for teenagers and colleges kids as a way to get into the workforce and to have a little extra money for themselves. It was not designed to be a wage for people to live on. Increasing the minimum wage would hurt the economy by hurting small businesses, a huge loss of jobs and it would increase the competition between teens and adults. Overall if the federal minimum wage is increased it will have many negative effects on the economy.

Raising the federal minimum wage to $15 an hour can have detrimental effects on society. Some issues that may arise are increases in unemployment and small businesses not being able to handle the financial burden, which will lead into job benefit cuts. Furthermore, a rise in minimum wage will cause inflation and businesses to raise the prices of their goods and services. People purchasing power will continue to stay the same; the struggle to close the gap between products and services will not

Many argue that raising the minimum wage makes hiring workers more expensive, eliminates jobs at the bottom, slows growth and ultimately raises unemployment. Economic studies show that raising the minimum wage to keep pace with inflation creates little additional harm, but what the president is

The United States’ minimum wage has been a concerning issue amongst the low wage earners because of the amount they earn is not enough for them to live on their own. Therefore causing the citizens who earn minimum wage to have an impossible time finding a place to stay and expenses for daily survival. Increasing the minimum wage will solve the issues that the minimum wage earners make, thus increasing the chances of survival for the entire population. Inflation is one of the reasons why minimum wage is a big issue, the minimum wage has not been keeping up with inflation at all causing things that would regularly be cheap to be more costly than it used to be. There are people who are against the raise of the minimum wage and may say that there will be an increase between of unemployment rate between the younger people because of the fact

The minimum wage has been an important element on the United States labor system and has sparked debates between employers and workers to this day. The main argument against raising the minimum wage is that the harmful effects raising the minimum wage would create do not justify the small-scale benefits generated by the raise. Business owners and conservatives claim that raising the minimum wage will result in job loss, hurt low skilled workers, and may result in higher prices for consumers. In a 2012 paper published in the peer-reviewed Industrial and Labor Relations Review (ILRReview), economists Richard Burkhauser, Benjamin Hansen, and Joseph Sabia, state that while some low-skilled workers living in poverty do see their incomes rise when the minimum wage increases, many others lose their jobs or have their hours significantly cut. Their study concluded that New York’s 2004-2006 $1.60-per-hour minimum wage hike was associated with a 20.2 to 21.8 percent reduction in the employment of younger, less-educated individuals, with the largest effects for those ages 16-to-24. Conservatives believe that even though teenagers are

Who is hurt and who is helped by an increase in the legal minimum wage?

Raising minimum wage can solve the cause of inflammation of poverty. Raising minimum wage would lift more than 4 million Americans out of poverty. Number four(4) Says, nearly one in five children would see their parent get a raise. Action by states and cities show that lifting the minimum wage shortens poverty and increases wages. In the 1960s, the minimum wage was suitable to lift a family of three out of poverty. A full-time employee with two children earning the minimum wage will still raise his or her family in poverty. Raising the minimum wages could possibly increase the health and wellbeing of millions globally. Raising the minimum wage will also encourage consumer

One of the most obvious and anticipated effects of a minimum wage increase is the income increase especially for families on and below the poverty line. An approximated 16.5 million people stand to gain from added wages, and most families ' incomes would, in fact, rise above the federal poverty threshold (Congressional Budget Office). With so many families depending on the minimum wage to forge a livelihood, an increase would be a blessing in disguise. It is a fact that some American families have parents working up to two or three jobs to keep up with the cost of living which is dynamic in nature. As such, children grow up with absentee parents and lacking the attention they need to enhance their psychological well-being. Increasing the minimum wage is likely to ease the pressure from such families and encourage more cohesive family units.

Minimum wage affects everyone. The current minimum wage is at $7.25 and President Obama announced that he wished to see a change in the minimum wage, he wants to raise the hourly wage to $10.10. A rise in the income of those who are employed will also raise the cost of hiring unskilled labor and can potentially reduce the number of people hired by businesses. Also, if minimum wage is raised then the price of the products that the companies are making might increase which will continue the cycle of minimum wage not being enough to survive on. The increase of minimum wage will result in negative effects that will have a significant impact on national economy.

They do pay a living wage. There is this gentleman named Jacob Lund Fisker. He has a blog Early Retirement Extreme (http://earlyretirementextreme.com)

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

In a paper titled “Four Reasons Not to Increase the Minimum Wage,” the Cato Institute, a libertarian think tank, offers four empirically backed consequences of increasing the minimum wage; these consequences include: the loss of jobs, low skilled workers being disproportionally affected and priced out of the job market, a minimal effect on reducing poverty, and higher prices for goods. The paper compiles a number of studies to support these

The maximized earnings of the lowest paid workers are the instantaneous advantage of a minimum wage increase however, the irrefutable effect could far exceed the extra income. Notably, raising the minimum wage does not cause job loss, despite the claim of many skeptics. Notwithstanding, a minimum wage increase would strengthen jobs like unemployment benefits, as well as tax breaks for lower, and middle-income workers. Plus, raising the minimum wage puts money in the pocket of working families thereby increasing their spending power (Cooper and Hall, 2012).

On the other hand, there are also a few positive effects caused by minimum wage. Although in the microeconomics level, there seem to be a disadvantage, but in a macroeconomic level, minimum wage shows an overall positive. Minimum wage ensure that the spending increases. When the spending in creases, aggregate demand(AD) inceasr and creates the Keynesian multiplier effect on the economy. Keynesian Multiplier shoes ny government spending brought about cycles of spending that increased employment and prosperity regardless of the form of the spending. (Investopedia

According to Kohen, Gilroy, and Brown (1982) look at what changes business make as a result of an increase in the minimum wage in addition to the effect the increase in the minimum wage has on levels of employment in different segments of the economy. The Effect of the Minimum Wage on Employment and Unemployment describes the resulting changes businesses make to cope with a minimum wage increase as “Shock” effects. First of all, some businesses, which were originally inefficient, drastically increased the productivity of their operation in order to offset the minimum wage. Secondly, firms that rely too heavily on labor will be forced to fire workers to better minimize costs. Thirdly, required level of effort might be raised for the workers