The Benefits of Raising the Federal Minimum Wage

1334 WordsJul 15, 20186 Pages
Picture this: You are a single parent of two, you work 40 hours a week plus occasional overtime at a minimum wage paying job, you struggle to put food on the table to feed your family, and then you receive a call from the bank saying that your home is being foreclosed. This is the situation faced by thousands of Americans every year due to low income and wealth inequality. The federal minimum wage (FMW) as of April 2014 is $7.25, which is not enough to keep a family of two above the poverty line. There are certain questions on this topic that should be addressed, such as why is poverty and wealth distribution an issue in the United States today? Should the FMW be raised and why? How would raising the FMW affect American families? What are…show more content…
Patterns show that this gap is only widening as time goes on, specifically between 2007 and 2010. The disparity between the upper and lower class is immense and is critical to understanding the need for a FMW raise. 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

More about The Benefits of Raising the Federal Minimum Wage

Open Document