The Effects Of Raising The Federal Minimum Wage

Beside the increase in cost to businesses and customers, other people can potentially be hurt by this policy. By increasing the wage, small businesses will suffer a higher cost that can lead to cutting jobs, stalling new hire or even shutting down. On the other hand, the economic plight of these minimum wage workers should also be considered. Therefore, the $15 plan would produce unpredictable consequences, while not doing anything would doom minimum wage workers to live in in poverty and to consume public resources.

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.

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

Research shows if minimum wage was to climb that it would hurt the least skilled and the least experienced people trying to seek a job the most. There are different of opinions people believe in about the positive and negative aspect of minimum wage. Supporters argue that such a boost will shrink poverty without plummeting jobs and that it will boost confidence, increase the normal living, and cut inequality and have businesses to be well-organized. Opponents that are not for minimum wage say it will increase poverty, unemployment and is not good toward businesses. The question about minimum wage and the effects it would cause if it was to rise, remains one of the most commonly studied topics.

The idea of raising the federal minimum wage that has developed nation wide attention, including protesting and arguments, has caused many discussions on why it could potentially help the economy grow and how it could result in the crash of the economy. Many people feel like raising the federal minimum wage is a must, while others think it will destroy the economy. There are many benefits that come with raising the federal minimum wage, but those benefits also come with many disadvantages.

Talks of increasing the minimum wage in the province of Quebec have been faced with stern resistance from business owners. The argument against raising the provincial minimum wage from $10.75/hour to $15.00/hour is that this action will have dire consequences on the economy of Quebec. Out of the many protestors, a significant portion are employers and small business owners. Similar to the argument made in the textbook, raising the minimum wage will result in losses for small businesses, and some may be unable to afford to pay their employees. Furthermore, large corporations may be dissuaded from opening branches in Quebec because of the cost of human resources. Long term effects of such an action could consist of higher dropout rates from high

As every year goes by year price of various things seem to rise. Such as the price of food in fast food places and at the market place this is due to inflation and the raising of wages of workers. It is imperative to cap the minimum wage at a reasonable dollar amount in order for low skilled and unemployed workers to obtain and maintain employment.

On June 16, 1933, President Franklin Delano Roosevelt announced a plan to help raise the United States out of the Great Depression. At the heart of this plan was the idea that wages must be set and fair. “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”(Roosevelt) This plan became the Fair Labor Standards Act, which set the Federal Minimum wage. Minimum wage has increased, slowly, over the years, but has not kept up with its intended purpose. Raising the federal minimum wage to a "fair living wage" level will improve the lives of the working poor, without adverse economic consequences.

Study shows that wage increases do lower poverty, by 2.4% if wage at $8.00, consistent with other studies. (Washington Post/ Arin Dube)

From an economic perspective, one can see that raising the minimum wage to $15 per hour will cause firms to decrease employment. If the cost of each worker increases, firms will not be able to hold as many workers and will be forced to lay people off or suffer a loss in profit. The problem with raising the minimum wage is that it creates a downward rigid market and causes firms to either sell its goods and services at a higher cost or lay off workers to balance out the increase in cost. Creating a market where wage is not flexible and is above the real market equilibrium means that firms will simply decrease employment and increase prices. This kind of unemployment is known as

Although, the minimum wage is not the same in all place in the States, almost all those who are depending on it are unsatisfied and are hoping for a rise even though some people see the rising as risky. In 1992, Card David wrote an article about Using Regional Variation in Wage to Measure the Effects of the Federal Minimum Wage. He pointed out that '' arise in the federal minimum wage will typically affect a larger fraction of workers especially teenagers in some states than in others. That variation across states depend on the fraction of workers initially earning less than the new minimum.'' (Card David 1) He agreed that many States had already passed state – specific minimum wages above the new federal standard. As a result, the fraction

Imagine standing over a scorching grill for hours, taking care of the elderly, both lifting and transporting heavy loads, basically doing back breaking work; only to be making less than $8 and hour. That is the reality for millions of people in the work force who are earning minimum wage. Whether or not minimum wage should be raised has been a question many people have been discussing for years and has become quite controversial. Those opposed to increased minimum wages would argue that a minimum wage salary is already sufficient enough, or in some cases even “too high”. In spite of the opposing sides, it is almost certain that a rise in minimum wage will either positively or negatively affect several aspects of the country. For one, an increase in minimum wage could result in an economic shift. Furthermore, the current poverty level within the country, with the help of a higher minimum wage, would either decrease or as a result. Thirdly, a change in poverty levels caused by a higher minimum wage would ultimately change the amount of government spending and those who receive it. Minimum wage being raised would definitely be impactful not only the people receiving those minimum waged salaries, but also the economy, their families, and even the government funding.

The minimum wage in this country has been a controversial issue. Many people believe it will help reduce poverty and boost the economy. However, they are not looking at the downfalls this will bring to our country. This could make the unemployment population rise, it will raise prices of other things, and would have little effect on reducing poverty. Raising the minimum wage would have a negative influence on our country.

In 1938, the first national minimum wage laws in the United States were passed as part of the Fair Labor Standards Act, which served as “a floor below wages,” to reduce poverty and to ensure that economic growth is shared across the workforce. Today, many people who work for companies that pay at or near the minimum wage and remain near or below the poverty level rely on government health and food security and income programs to supplement their living expenses. Since 1938, there have been many additional policies to the Fair Labor Standards Act that have changed many things, such as increasing the national minimum wage numerous times to the currently salary level, which was set in 1997. The Fair Minimum Wage Act of 2007, from the United States Department of Labor Wage and Hour Division, was a policy to change the federal minimum wage from $5.15 to $7.25 in three additions, which began in July of 2009. (U.S., 2009).

There have been many questions raised about increasing the minimum wage in the United States but not many people have the knowledge to understand how their lives will be affected. People are more concerned about increasing the minimum wage into living wage. Everyone should be educated and have concerns about the politics of raising minimum wage to a living wage.