The Pros And Cons Of Raising Minimum Wage

In 2015, CBS and The New York Times conducted a poll regarding the public opinion of Americans support for raising minimum wage from $7.25 per hour to $10.10 per hour. The poll showed that 71% of Americans favored it, whereas 26% opposed it. There are strong arguments to be made about both sides of the debate, and though there are lots of pros to increasing the minimum wage, there are equally as many contradicting arguments. The strongest argument held by Americans who favor the raising of minimum wage is that it would improve the overall economy of the U.S. and create more jobs. In a 2013 Economic Policy Institute article, David Cooper writes, “Across the phase-in period of the increase, GDP would grow by about $22 billion, resulting in

This is because many small business owners would be forced to lay off employees in order to stay in business. This would increase the unemployment rate, adding to the problem, rather than solving it. The Congressional Budget Office wrote, “Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent…” This loss of jobs would mainly occur in small businesses and businesses who can’t afford to pay workers more. Furthermore, non supporters say that, instead of decreasing poverty in the U.S., raising the minimum wage would actually increase it. There are lots of factors that would add to the the overall increase in poverty, one of them being that the cost of everything would increase. George Reisman of Pepperdine University wrote, "The higher wages are, the higher costs of production are. The higher costs of production are, the higher prices are. The higher prices are, the smaller the quantities of goods and services demanded and the number of workers employed in producing them." Similarly, increasing the minimum wage would increase the price of consumer goods. The Federal Reserve Bank of Chicago wrote an article in 2013 that stated that, “if the minimum wage is increased, fast-food restaurants would pass on almost 100% of their increased labor costs onto consumers and other firms may do the same.” This would not only result in higher prices for goods, but may also result in the quantities of food being reduced, to make up for the money they’re spending on paying employees