For the past seventy year’s there has been many debates, discussions and arguments about the minimum wage in the America. Many politicians, news pundits or advocates from either side have diverse outlooks on whether or not the minimum wage should be raised. The federal minimum wage was announced in 1938 during the Great Depression under President Franklin Delano Roosevelt. At that time, it was set at $0.25 per hour and has increased by Congress 22 times, 2009 being the last increase from $6.55 to $7.25 an hour. However, 29 states and the District of Columbia (DC) has a higher minimum wage than the federal minimum wage. About 2,561,000 workers (or 3.3% of the hourly paid working population) earn the federal minimum wage.
Should Minimum Wage be Increased?
For many of us who would be considered in the “working class” in America would most likely agree that one cannot live off $7.25 an hour even if you worked a 40-hour work week. Proponents of the increase state with a higher minimum wage it will help create jobs and grow the economy. One of the primary causes of wage disparity between lower and middle-income workers causing people who work minimum wage ($7.25 an hour) to live below the poverty line. Those against raising the minimum wage often claim that it will hurt people under the age of 22 the most, because they “need experience” of working a minimum wage job. Opponents of the increase often say that many businesses cannot afford to pay their workers more, and will be forced to close, lay off workers, or reduce hiring. Consequently, that will make it more difficult for unskilled workers with little to no experience to find jobs or being able to move to a higher social class. Therefore, raising the minimum wage at the federal level does not take into account regional cost-of-living variations where raising the minimum wage could hurt low-income communities in particular.
Pros & Cons of raising the Minimum Wage
- Increasing the minimum wage would reduce poverty. A person working full time at the federal minimum wage of $7.25 per hour earns $15,080 before taxes. This also would help with crime rates in many communities that lack good paying jobs. Studies have shown when people have better paying jobs they’re less likely to commit a crime.
- A higher minimum wage would reduce government welfare spending. If low-income workers earned more money, their dependence on, and eligibility for, government benefits would decrease.
- A minimum wage increase would help to reduce race and gender inequality. Despite what some media outlets would have us to believe there are still race and gender inequality in finding a job, receiving promotions and hourly wages.
- Opponents of raising the minimum wage state that a byproduct of an increase would raise poverty rates in America. A study found that although low-income workers see wage increases when the minimum wage is raised, their hours and employment decline, and the combined effect of these changes is a decline in earned income. Which will increase the proportion of families that are poor or near-poor.
- Raising the minimum wage would increase the price of consumer goods. Causing companies to utilize more robots and automated processes to replace service employees.
- Raising the minimum wage would increase housing costs in major cities where there is a limited housing supply. So, by raising the minimum wage but not increasing housing stock would lead to an increase in rental prices in low income communities.
What are your thoughts do you think the minimum wage should be increased?
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