Raising Minimum Wage Essay

Raising the minimum wage sounds like a beneficial idea, but there are also a few surprising reasons why it might not be such a good plan after all. A common assumption among Americans is that raising the minimum wage equals an increased income, but, according to Joseph J. Sabia and Richard V. Burhkauser that may not be the case. They discovered that, “examining only employment effects, however, may mask full labor demand effects. Firms may respond to minimum wage hikes by (i) reducing both employment and average hours worked by employed workers or (ii) increasing hours of retained workers to compensate for reduced employment” (Couch and Wittenburg 2001; Neumark and Wascher 2007) (595). What, exactly, would be the point in

An increase in the minimum wage would push companies to take this route as it becomes more and more profitable to them. The end result of all of this would be a suddenly increased level of unemployment bound to become subsequent with an increase in government-funded welfare expenses, weakening the economy even more.

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

Raising the minimum wage will have a terrible impact on individuals and businesses because companies or businesses will fired people of employment particularly for low-skilled workers.

Minimum wage means the lowest amount that is allowed to be paid to an employed worker per hour. The federal minimum wage, meaning the minimum wage throughout the United States is $7.25, however, many states have chosen to raise theirs. The minimum wage must be raised because it will help lift people out of poverty and it will reduce the amount of spending on government programs. Raising minimum wage will help people get out of poverty. According to Census.gov, raising the minimum wage to $10.10 would lift 900,000 people out of poverty.

The raising of the minimum wage is a very hard topic to settle an agreement on, because it will create many difficulties. Many people support in raising the minimum wage, but many do not know how many pros and cons there are to raising the wage (Kusler). Even all the states and countries have different wages, because they have their own opinions on this topic (Kusler). Also, it is a very important topic, because this can affect many people if it goes the wrong way (Kusler). One of the many things is

Having a higher minimum wage would mean that the job is worth more, making the job market more competitive. Employers are now forced to spend more per employee, causing more skilled and experienced workers to be desired. Companies may even begin to lay off employees they can’t afford to pay or begin to hire less (Geraghty). The combination of less jobs with stricter requirements would leave inexperienced young people unable to break into labor force, adding to the growing numbers of unemployed workers

Living on $6 an hour would not be easy, but after gaining experience the hypothetical worker could find a better job that will pay more. In essence, some economist believe that the government should not interfere with the negotiation of pay, because employees and employers should be able to set a wage that is acceptable to both parties.

As for small businesses being harmed by an increase in minimum wage, Batra proves that a rise in minimum wage, as long as it is not faster than the rise in prices, will not adversely affect the businesses’ profits. He says that a business’s profit equals the revenue, less wage costs and all other costs. Batra offers an example with a popular fast-food franchise:

An increase in unemployment and product prices will occur because when the workers are paid more, businesses will have to raise the prices of their goods in order to still make profit. This may lead to inflation as well. Seeing the law of demand, when the prices increase, buyers will purchase less. This will cause the demand curve to shift to the right (Hubbard and Anthony 2015). If labor is more expensive employers will be forced to hire less workers. As for supply, higher prices of supplies will create a surplus in supply, causing the curve to shift to the right (Hubbard and Anthony 2015). The higher the wage, the higher the number of workers willing to work but the number of workers hired will be lower. This increase in unemployment can hurt the prices of goods and services and businesses will have to allocate more money for wage, which makes the charge more for their products. Raising the minimum wage can lead to many consequences, it can even lead to a decrease in economic

There are several arguments that exist both for and against minimum wage. Minimum wage is the lowest wage that a person can get paid for their work. This is usually seen in labor unions.

One way to look at raising the minimum wage is from a supply and demand standpoint. If the price (minimum wage) increases, the demand (workers) will decrease. This will also cause a shift left or right on the demand curve because of the change in income of the population. So, if people are making a higher wage, they will pay a higher price for a good and that will cause the shift outward. Now, let’s look at some arguments to why a minimum wage increase could cause an undesirable problem.

Minimum wage laws say that an employee cannot be paid less than a certain amount for their labor and skill. The fluctuation of such laws can cause major economic issues including an increase in unemployment rates. When the idea to raise minimum wage to nine dollars per hour came to be, the original thought was that a higher hourly rate for the lowest level workers meant less people would live below the poverty line. One who is simple minded and does not consider consequences would believe this to work; instead however this worsens the issue. When wages go up, the employers find ways around spending more money on their employees by letting go of the lowest skilled workers and finding more efficient technology to replace them. This in turn increases unemployment levels and makes it more difficult for unskilled workers to get a job; not to mention the cause of

If the minimum wage is raised to living wage, people will have harder time getting a job because employers will inquire more experience and education on their employees prior to hiring them. In addition employers will be forced get rid of many employees in order to maintain their profit. Employers will also increase the price of their products. This will have a huge draw back on the economy. The rate of unemployment will rise as well.

The issue of increasing the minimum wage in America has been a topic of discussion for a while now. Many see benefits to increasing the minimum wage while others see drawbacks. The most positive effect of this increase would be that those who are on minimum wage will be able to better support themselves, while the drawback is that big companies will of course be losing money to their employees.