The Benefits Of Raising The Minimum Wage

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Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects. In …show more content…
Small businesses are negatively affected by the minimum wage because after the increase some may not be able afford to pay the new minimum wage to the workers. This also causes the businesses to dismiss current employees, which decreases their production and they may eventually run out of business. Currently unemployed citizens are also negatively affected by the increase in the minimum wage because since the wage is higher, firms will hire fewer workers than they did before the minimum wage increase.
There has been a significant amount of discussion regarding the value Obama wants to raise the minimum wage to. Some argue that increasing the minimum wage will eventually cause more spending by the minimum wage workers, which will lead to an increase in economic stimulus. Opposing viewers think that this will cause the rate of unemployment to increase and small firms to collapse because of lack of labor that they can no longer afford. Also, if inflation rises the current minimum wage contributes to the already existing inequality between them. Therefore, by increasing the minimum wage both will increase simultaneously, which is beneficial for the economy and society in general. According to a poll made in March 2013, 71% of national adults, 91% of democrats, 68% of independent voters, and 50% of republicans are in favor of raising the minimum wage to $9.00