A brilliant eighteenth-century Scottish political economist Adam Smith said, “A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family.” In United States of America, there are 3.8 million people who are working at minimum wage. If we increase minimum wage to 15 dollars then not only all those workers will get benefit from it but also our economy will get better also.
If we raise our minimum wage to fifteen dollars an hour then our workers will be very satisfied. For example, they don’t have to work two or more places because they can get almost the same amount of money from one job. Therefore, our workers will get time to take care of themselves and their families. By taking care of themselves, they will become physically and
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If we raise our minimum wage then price of labor with increase. Furthermore, we also know that the orientation of the price of labor is negative. Therefore, firms will hire less worker and that small amount of works will produce less output. As a result, firms will supply less to the market which is going to affect supply curve and that curve will shift to the left. It will give us a new equilibrium point where price will be higher than previous equilibrium price. Now one can easily argue that increasing minimum wage can increase product cost. However, benefit of increasing minimum wage is far greater than that. We all know that middle class people spend most of their money for consumption. Therefore, if we give them more money than they will spend more as well. Furthermore, companies will make more profit and they will expand. When companies expands, they need more people to work for them which will reduce our unemployment rate. Therefore, for the long run benefit, we should increase minimum