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Minimum Wage Thesis

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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 …show more content…

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, …show more content…

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

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1094 Words | 5 Pages

First, one main reason that the minimum wage should be raised is because the economy will prosper. “Economic Policy Institute stated that a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period” (ProCon). This quote shows that the economy will flourish from the increase of the minimum wage and that unemployment will decrease. Another quote that shows how raising the minimum wage will affect employment is “To the extent that through these contour effects it affords as much as 70 percent of the workforce greater purchasing power, it effectively increases aggregate demand for goods and services, which should ultimately lead to the creation of more jobs” (Challenger 19). Bryan Covert supports raising the minimum wage by

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1913 Words | 8 Pages

The current federal minimum wage is set at seven dollars and twenty-five cents. Many workers across the country are complaining that the purchasing power of the minimum wage is currently low, meaning one cannot buy as much while living off of the minimum wage. Moreover, citizens are work full time, while earning the minimum wage, are living, on average, several thousand dollars below the poverty line. However, an increase in the federal minimum wage may do more harm than good. It is likely that an immediate increase in the federal minimum wage will lead to an increase in high school drop outs, a large cut in the workforce, mass amounts of inflation, as well as a large amount of jobs being outsourced.

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1839 Words | 8 Pages

Similarly stated by Lauren Dixon in her article, “How Does the Minimum Wage Impact the Economy.” She recognizes that, “minimum wage then helps mitigate that imbalance of power between employers and low-wage workers” (Dixon 1). Likewise, it would also destroy the purchasing power of consumers, as they would continue to have fewer money to purchase their needs and wants. Since 2009, the federal minimum wage has been

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524 Words | 3 Pages

Raising the minimum wage has been one of the biggest debates during the 21st century. One side of the spectrum argues that raising it will make it so they have a living wage, while the other argues that raising it will hurt the economy. Whichever the case is, people are clearly divided on this issue. Before Oregon passed the 15 dollar minimum wage law, people wrote arguments to try to either prevent or pass this law. The article, “How a $15 minimum wage would affect a real business: Guest opinion” by Lee Spector argues that raising the minimum wage would hurt small businesses like the one he earns.

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706 Words | 3 Pages

When people don’t have jobs or are scared about losing their jobs, it affects the way they buy things (consumer confidence, their will to or not to spend their money) which in return, hurts the economy. If the minimum wage is increased then certain businesses won’t be able

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131 Words | 1 Pages

Raising the minimum wage isn 't entirely beneficial. It could potentially lead to more unemployment as some businesses may reduce their number of employees or reduce their hours in order to offset the cost of paying a higher minimum wage. Some may also increase the prices of products or services offered. It can also possibly lead to a decreased interest in college education since minimum wage jobs are paid almost the same or can be more than what jobs requiring college education pay.

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97 Words | 1 Pages

Positive effects of raising the minimum wage to fifteen dollars in 2016 are that it boosts the economy, and creates a positive GDP. By increasing the minimum wage to fifteen dollars an hour, which is double what the minimum wage is today, you are increasing consumer spending which increases GDP. Studies have shown that low-waged workers put every dollar they earn plus more back into the local economy when they were given a raise. Workers strived to work harder as their wages were raised.

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1183 Words | 5 Pages

It is a domino effect. The job market will drop due to the raising of minimum wage. While some will choose to lay off employees others will choose to increase the price of goods. So along with the minimum wage increasing, so will the expenses associated with living. Even though the person making minimum wage would be getting paid more in the end, it would have no large effect because the cost of most things would have risen too.

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878 Words | 4 Pages

They said that they are not able to raise their prices to afford this and cover their expenses. Also, they state that they have reduce the amount of the minimum wage employees or reduce their work hours which will effect both the owners and employees negatively. Furthermore, raising the minimum wage will effect economic negatively. The economists concluded that as a result of the wage increase, "many prices will increase, including those that lower-income households commonly face; wages will raise for those in minimum wage jobs that remain employed; employment opportunities for those at the bottom of the skills ladder will be diminished and employment growth will

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579 Words | 3 Pages

If minimum wage is increased the more money the typical american will have on spending money and they will have more money to put into businesses across the country. In a study performed in 2011 by Chicago Federal Reserve Bank it showed that every dollar added to a person 's minimum wage they spent $2800 more in additional consumer spending. Workers who earn more than minimum wage will also see increases in their salaries. This is because minimum wage is seen as the base number from which their wages are calculated so if the base number is raised their salaries will be arranged.

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435 Words | 2 Pages

Small Businesses could go out of business if we raised the minimum wage to a higher price. This is a widely debated subject of money, income, and the effect raising the minimum wage can have on businesses and the economy. Currently, the federal minimum wage is seven dollars and twenty-five cents and have been established that way since 2009. It has been said minimum wage should be increased to accommodate living expenses and travel time to places of work. The problem with raising minimum wage , that many people do not realize, is how it affects big and small businesses.

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800 Words | 4 Pages

The article from Landlordology states, " Raising the minimum wage causes a temporary spike in spending power and brings disadvantages to minimum wage workers and businesses. Raising the minimum wage also creates more jobs for more skilled workers, disadvantaged teenagers and those with less education and experience. Many argue that an increase in minimum wage will help guide low skilled workers out of poverty. That is not necessarily true, Many economists can agree that minimum wage jobs such as cashiers or a hostess are not jobs that are meant to support a family. If anything, by raising the minimum wage, it will put more people in poverty than guide them out of poverty.

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566 Words | 3 Pages

As the workers earn more money, the product they provide increases in worth. Large companies such as McDonald’s and Walmart charge more money for the products consumers buy due to the increase in labor cost (Hawkins). The consumers will have more money from their minimum wage jobs, but products they wish to purchase will cost more leaving the workers at the same place they started. Due to The United States’ supply and demand economy by raising the minimum wage the dollar will decrease in value. Large corporations will not cut their company’s profit or their own paychecks to pay employees more.

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1512 Words | 7 Pages

Many citizens of California would naturally think about prices of products when they hear that the minimum wage will increase. An online article, by PewResearchCenter, says that “..Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 8.1% of its purchasing power to inflation”. Even though this was news a few years back, it still shows the effects of having a raise in minimum wage. It shows that 8.1% being purchased have been increased into products. There will be no point in raising the minimum wage if the price of products goes up.

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1552 Words | 7 Pages

A group of lobbies says that every dollar that an employee receives, comes from somewhere. It just is not logical raising the minimum wage will add spending money into the economy. (“NPR”) With the minimum wage raise, Wendy’s hamburgers selling at their original price would no longer be able to cover the costs of raised labor. By making the hamburgers cost $5 instead of $3 would make this able to happen.

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