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The Pros And Cons Of Raising Minimum Wage

701 Words3 Pages

I believe that there is no reason to increase the minimum wage because the cons outweigh the pros considerably. In society today we like to be efficient so that means one wants to pay for something that has a greater value than the cost. So let's say that a child wanted to wash the dishes as a chore for a minimum wage of 3 dollars and after this the job was done and the child was paid because the value of the job outweighed the cost of it. On the other hand let's imagine if the minimum wage for this child was raised and he decided to charge 30 dollars to wash the dishes then in this scenario the child would be rejected and "unemployed". This happened because the value didn't outweigh the cost of the job. So if the minimum wage were to be increased there is a good chance that a lot of people would become unemployed because the employer doesn't find it beneficial to pay them so much for so little. …show more content…

Hypothetically speaking if employers were to have an equilibrium between workers and wages then everything would be perfect but let's say that the price floor were set to something higher than the old minimum wage. This has become to expensive for employers so they have no choice to not only fire people but to lower the amount of people they are willing to accept into the job. Now a new problem arises and that problem is that people notice the change in minimum wage and attempt to apply for the job but the demand for labor is lower than the supply for labor so this results in a surplus and a lot of unemployment. Another issue that could arise from this is that business would have to start raising their prices in order to meet the demands of the changing economy and this causes people to stop buying because everything is expensive so this slows the economy

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What Are The Pros And Cons Of Raising Minimum Wage

177 Words | 1 Pages

One of the cons to increasing the minimum wage is that it helps larger corporations and hurts smaller businesses, therefore, competition is decreased. The bigger companies use raising wages acts as a barrier to entry to new business entering the market and create a monopoly for larger companies who have more profits to afford the increase. An example of this is Wal-Mart, who can afford to pay employees nine dollars and twenty cents an hour but a little store such as Meijer 's who does not make as much profit would limit their hiring of new employees and would cut hours to compensate. A family store might decide that the cost of entering the market is too high to endure as they build up their clientele and develop their business they decide not

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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

Many economists believe that if the minimum wage is increased to more than ten dollars an hour, it is extremely likely that due to the extensive amounts of

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1213 Words | 5 Pages

Raising the minimum wage inflates the value assigned to these employees at the expense of seasoned employees. In other words, existing minimum wage employees and those unemployed people who were unwilling or unable to find employment for jobs at $8, $9, and $10 per hour now must compete for minimum wage jobs at $10.10 per hour against existing lower wage employees that were already making a higher wage than the previously existing $7.25 per hour. The lower wage employees have more experience and have already demonstrated they have a better skill set than the incoming new workers. This just helps further support the weight companies place on the importance of an employees’ skill set in relation to their assigned

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1032 Words | 5 Pages

Cutting off employees’ hours or firing them due to a tight budget workers means that there are less job opportunities for workers and therefore workers might not have a job or an income to depend on. If the wage increases, it will lead to unemployment and unemployment leads families to live in poverty. The solution to live above the poverty line is not to increase the minimum wage because raising it will increase poverty rather than reducing

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1558 Words | 7 Pages

There are multiple reasons why the minimum wage shouldn’t increase from where it is at now. Firstly, raising the minimum wage won’t reduce the poverty level as so many people are mislead to believe. In the article “Raising the

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They conclude that increasing minimum wage to $15.00 would only kill the amount of jobs available. This is a basic application of supply and demand. The higher the cost of something, the less that it will likely be bought. If wages are doubled, then companies might fire some employees and/or regulate the amount of hours someone works. However, this argument has been proved wrong.

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760 Words | 4 Pages

To begin with, economists say that many people in poverty do not work. Second, most minimum wage earners are not from poor families. Also, low-income families do not even meet the “low-wage worker” bracket. In effect, they do not benefit from the program. Lastly, raising minimum wage has an indirect consequence to the “low-skilled worker.”

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587 Words | 3 Pages

If business reduce their labor force due to the increase in salary cost then it adds to the already high unemployment/underemployment rate. Americans cannot afford to have more unemployed people in our communities. Another possible con would be if a high increase in minimum wage causes an increase in the cost of goods and services. While workers may earn more they may also have to spend more and their quality of life may not actually improve. In the article The Logical Floor, it states that in Britian, it is (the minimum wage), adjusted annually on the advice of economist and is generally increased gradually.

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Admittedly, if wages were to increase, smaller businesses may not be able to afford as many employees. This could result in businesses hiring less people and laying off other. If this happens, then there will be more unemployed Americans who fall beneath the poverty line (“Should the Federal”). However, with an increased minimum wage there would be more people who have a higher income than people who are unemployed. In fact, according to a study by Alan Krueger and David Card, there was “no indication that the rise on minimum wage reduced employment” (“Should the Federal”).

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1173 Words | 5 Pages

Employers will have to pay more for each employee. Therefore, to make sure that they are not constantly losing money, employers will simply not hire as many people to work in these minimum wage jobs. Many people have said that because of this massive rate of increase in minimum wage, corporations will have to get rid of 20% of their workers if they want to spend the same amount of money on employees in comparison to past years. Another large problem that occurs from the effects of this increase is that less people have the chance to earn more money once they move on from a minimum wage job. Even if there was no minimum wage increase, most workers would end up making 40.8% more than their minimum wage salary, as they gain work experience.

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512 Words | 3 Pages

In the society we live in today, most people would think raising the minimum wage is a great idea. It would be great for the economy; people would have better standards of living. There would no longer be poverty, since we live in the country of the rich. This all sounds great, but it is unrealistic. This will cause a huge crisis in our economy.

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631 Words | 3 Pages

Typically, wage distribution reflects the productivity of the worker. If the government decides to enforce minimum wage increase on labor market, the workers whose productivity falls below the minimum wage will find very few, if any, employment opportunities. Historically there has been evidence that employment loss has been one of the outcomes of increased minimum wage. A higher minimum wage, may be too heavy a burden on employers, especially small business owners and those employers, in turn, would be unable to hire as many people. Since January 1st 2014, employers with 50 or more employees re required to provide a package including essential benefits for their employees.

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1130 Words | 5 Pages

It is said the businesses will have to reduce hours or staff size to comply with the minimum wage increase (Englander).This means managers would have to cut costs on the labor section to maintain their budget. This would be an obvious consequence of the proposed increase that can be deduced with basic economics knowledge. Despite this people still would like to increase it. Raising minimum wage to even $10.10 would cause the loss of 500,000 jobs (Puzder).So even this miniscule increase will result in the loss of half a million jobs. That being said, why should there ever be an increase to minimum wage if direct result would be massive job loss.

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704 Words | 3 Pages

Many argue that an increase in minimum wage will help guide low skilled workers out of poverty and assist them into having a better career. That is not necessarily true, Many economists can agree that minimum wage jobs such as cashiers, host or a hostess are not jobs that 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. A raise in minimum wage will cause loss of jobs, an increase in the inflation rate, increase in

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