Minimum Wage Thesis

Minimum Wage

California, as of 2016, has begun to increase their minimum wage to $15.00 per hour, more than double the federal mandated wage, and New York will likely soon follow. The federal government is currently considering raising their minimum wage from $7.25 per hour to $10.10 per hour as well. While this may seem favorable at first, raising the minimum wage in America will harm the economy. Federal laws passed to raise the current minimum wage will only increase unemployment, shut down small businesses, prevent people from aspiring to higher education in life, increase the prices of products made by minimum wage workers, and encourage companies to make their products in other countries. An increase in capital may, on the surface, appear

Minimum wage is the smallest amount of money the local, state, or federal government requires a person to be paid. The federal government sets the minimum wage in America, however states and cities can choose to raise the minimum wage above what the government has set. Originally, minimum wage was only intended to help the American people during a time of economic crisis. When America plunged into the Great Depression in 1929 following the stock market crash which caused more than half the banks closed due to lack of money, fifteen million people in the country became unemployed and the majority of the country plunged into poverty (History.com Staff). As a result, President Franklin Roosevelt released his plan called the New Deal, a series of bills and programs that promoted job growth and allowed the banks to be bailed out,

With the minimum wage increased, these stores will be forced to compensate for the extra expenses by increasing the price of their products (Clark). A study by Purdue University discovered that raising the minimum wage to $15.00 per hour would raise the cost of food served by restaurants and fast food vendors by 4.3% (Minimum Wage - ProCon.org). Additionally, NBC News found raising the minimum wage in Oakland, California to $12.25 resulted in a price increase of coffee by 10% to 20%, and by 6.7% in Chicago after the minimum wage was increased to $10.00 (Minimum Wage - ProCon.org). The same theory applies to all businesses that hire minimum wage employees. As a result of price increases, the amount available in a buyer’s disposable income will decrease and they will be unable to afford their previous lifestyle. For families who are already around the poverty line, this can mean not being able to afford other necessities such as shelter or clothing. In order to save money, people would choose to stop buying from the small businesses, which are forced to increase prices to afford minimum wage workers, and instead choose to buy from businesses unaffected by the change in minimum wage, normally the larger businesses which can afford the change. The closing of small, independent businesses around America will come as a result of the decrease