The Positive And Negative Effects Of Raising Minimum Wage

My topic of interest is the effects of raising minimum wage in the U.S. Minimum wage is defined as the lowest wage permitted by law or by special agreement. In 1938, President Roosevelt signed a bill called the Fair Labor Standards Act of 1938, which set the minimum wage at $0.25. Although, overtime inflation devalued the amount of the dollar so it was raised there on. After raising the minimum wage the cost of living would keep going up every year. Also, currently advocates are arguing that the living wage should be 125% above the poverty line so that full time workers can afford a living.

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.

The minimum wage debate has been a hot topic over the past year, especially with the Presidential Election. This is a divisive topic that people rarely agree upon. There are essentially two sides you can take when it comes to this argument. Either people are for minimum wage or are against raising, or even having, a minimum wage. Proponents of the minimum wage are typically politicians who are lobbying for the vote of the people who feel that a minimum wage is critical to their wellbeing, and those who sympathize with people who earn “minimum wage”. Minimum wage is destroying America’s free market economy and someone needs to take action and find a better solution to this problem. Without anyone acting on this problem now, it can potentially be worse in the long run. Raising the minimum wage in the United States will do more harm than good to society because of the long-term effects.

One of the most talked about subjects in the U.S economy is the topic of minimum wage. With president Obama’s increase in the minimum wage to 10.10$ per hour people, both economists and politicians alike, have been debating whether raising the bar is a smart idea. At a time when the country the country’s inflation continues to rise at a steady pace and Americans are constantly working to feed their families, some economists know that a raise in the minimum wage would help elevate some of the difficulty. The last time the federal minimum wage was raised was in July of 2009, where rose from 6.55$ to 7.25$. However, there are plenty of reasons as to why the wage should be raised. Some may not think it, but raising the

Raising the minimum wage is a very important public policy issue. Raising the minimum wage is a responsible policy that is supported by research and demanded by the American public. Each day, minimum wage workers across the country struggle to make ends meet and provide a decent life for their kids (Scott & Perez, 2016). Raising the minimum wage is a controversial issue, many believe that raising the minimum wage would only provide low wage workers more money to spend. However, the benefits can be endless for low wage workers. If minimum wage is increased across the United States it would afford the people effected more opportunities for financial freedom. Increasing the minimum wage would raise the standard of living for low wage workers, allow families to be removed from poverty, allow for government welfare spending to be reduced and lastly additional income being spent would positively affect the economy.

One source from the Opposing Viewpoints Database called, “Raising Minimum Wage Increases Unemployment” argues against the minimum wage by suggesting it will decrease financial security and cause higher unemployment rates. The author provides unemployment statistics from the 1990s onward as evidence to argue against the minimum wage. The article says, “In 1990, Congress enacted another minimum wage increase.” “The month before the increase took effect, unemployment was 5.2%.” “With the increase, unemployment began to steadily increase and unemployment eventually peaked at 7.8%” (Jaarda). The article emphasizes to readers that increases in minimum wages and following increases in unemployment are not just coincidences by continuingly pointing at similar statistics throughout history.

There has been many conversations about what the positive impacts can come to America 's lowest income workers as a result of an increase in the minimum wage, and there has also been equally as many discussions over the negative effects the increase can have on similar people. This paper’s purpose is to combine each viewpoint and objectively analyze the arguments for and against an increase in the minimum wage. I will first discuss the benefits for an increase, then the disadvantages, and in the last paragraph, I will

Though many people, including myself, believe that the minimum wage should be increased, 1 in 5 Americans support the decision to leave federal minimum wage at $7.25. Those who support the current minimum wage argue that, instead of creating more opportunity for jobs, raising minimum wage will cause layoffs to skyrocket, thus increasing unemployment. For example, when weighing the pros and cons of raising minimum wage, Chad Halvorson, CEO and founder of When I Work, states, “If an employer has a tight compensation budget and the minimum wage is raised, it means they can no longer compensate the same number of employees at a higher rate and must make layoffs to remain within budget” (Chad Halvorson).

As many arguments pose a raise in the federal minimum wage equilibrium, there are a lot of workers, officials, and citizens who disagree. If the minimum wage requirements were to rise, many are not aware of the consequences that would occur. A higher federal minimum wage would result in job losses, there would be little effect on the reduction of poverty, and a result of higher prices for consumers would arise.

Previous studies indicating a minimal impact upon employment dealt mainly with small, incremental increases. There is undeniably a balance that must be achieved between raising the minimum wage yet not raising it so high as to cause employers to reduce payrolls. According to David Neumark, director of the Center for Economics and Public Policy at University of California, Irvine: “I don't think there's any sensible economist who thinks you could double the minimum wage and not throw a lot of people out of work... The consensus from a lot of studies I've surveyed — including my own — says that a 10 percent increase in the minimum reduces employment of those very low-skilled groups by about 1 to 2 percent” he says” 5. Raising the minimum wage requires an analysis of the ideal equilibrium point for wages and labor. “If the equilibrium wage is below the minimum wage...there will be a surplus of labor: at the artificially high minimum wage, aggregate demand for labor is lower than aggregate supply, meaning that there will be unemployment (surpluses of labor)”

Proponents of raising the minimum wage claim that if the minimum wage was raised, then many economic and social problems would be alleviated. This contention is at odds both with economic principles and years of creditable research. The effect of raising or even having a minimum wage has been studied extensively and the majority of studies have proven that raising a minimum wage does not have the desired effect. Both micro and macroeconomic forces affect the results of raising the minimum wage. The secondary effects of raising the minimum wage are bad both for

People might think that minimum wage has no downside, but surprisingly it has, if someone has worked in a place for years and his wage increased but if the minimum wage increased the new-hires will have a wage that is very close to the person who spent all his years working for this place, “Wal-Mart 's $9 minimum wage has been in place for a little while now, and not everybody is happy about it. Employees who have been there for years are complaining it 's unfair that they now make not much more than someone who 's just been hired off the street, reports Bloomberg News. While some low-level managers have also gotten higher starting wages, raises are small and infrequent for those at the bottom rung -- typically between 3 and 5 percent per year, which comes out to a few dimes annually if you started at $7.25 -- so the jump to $9 wiped out years of accumulated comparative gains for some rank-and-file employees.”(DePillis, Lydia) Another downside to minimum wage is that when the minimum wage rises the unskilled workers would have less opportunities to work since the employers won’t pay that much for the unskilled and will

There has been many conversations about what the positive impacts can come to America 's lowest income workers as a result of an increase in the minimum wage, and there has also been equally as many discussions over the negative effects the increase can have on similar people. This paper’s purpose is to combine each viewpoint and objectively analyze the arguments for and against an increase in the minimum wage. I will first discuss the

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

Opponents to minimum wage raise claim that the minimum wage costs jobs by pricing low-wage workers out of the labor market. However, when we review academic studies that examine the effects of minimum wage increases on