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
Pros:
- 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.
Cons:
- 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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I don’t think it should. Just look at the cons. If we’re raising minimum wage it’s going to raise total household incomes which in return will cause everything to go up due to making more money from food and goods, to homes, and so forth. There’s always a ripple effect when a change is made. That we know.
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Great insight thanks for sharing!
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Good read! I reside in Canada and prices for cost of living is continuously going up while hourly wages and salaries are decreasing. I feel that cost of living will continue to increase even if wages do not also see an increase which is scary! I think this is something that needs to be strongly looked at as people continue to struggle to live and keep up with everyday necessities
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Very true the same is happening here as well.This partly what cause me to discuss this topic. Thanks for reading!
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There is no easy answer to this question. I live in rural WV, a poverty stricken area suffering drastically from the recent decline in coal. The employees could certainly use an increase in salary, but the employers are struggling to stay in business as is, because the population in WV is declining due to the poor economic status. Drug abuse and homelessness are evident daily. I had a thought as I was reading your post though, but have not fully weighed the ramifications. What if the federal minimum wage had two tiers… one for ages 16-18, or first time employees and another for 18 and up? Then and employer could decide whether to hire a less experienced but lower cost employee or whether to pay for a more experienced person? Just a thought. Thanks for your post!
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That’s not a bad idea that’s something that should be discuss. Thanks for reading!
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Argh, this is a tough one for me. I see both the pros and cons. However, another question that I’m having is about the wage gap between men and women. Would changing that, rather than minimum wage, make more of a difference? I’m not sure, to be honest. Great post!
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That is a great question and another issue our country faces. Thanks for reading & sharing!
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Yes, it absolutely does need to be increased in my view. Wages need to be higher in order for the economy to grow. If people have more money in their pockets then they have more to spend locally. I do see the point about businesses struggling which is why it will be difficult. I’m not american, I’m european and I know america is big on tipping service staff.. is this because the wages are low to begin with? Definitely something to think about.
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I can see both sides, however I don’t think it should be raised. We have been going back and forth about this at my current place of employment.
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I don’t think it should be raised. I have to agree with theflordiangirl, look at the cons. If the cost of living goes up, it will make things like rent be completely unaffordable, which makes poverty much more real for people struggling to find employment.
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I don’t really like getting into politics on the internet, because you never know what people might say. But I feel that it should be raised. If our standard of living has risen over the past decade then there is no way that the federal minimum wage should stay the same.
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It’s a tough one. My husband and i own a play centre with 20 staff. If everything increases then prices have to increase and it’s a full on cycle then which affects everyone in turn, including business which then affects job security!
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I agree with most of the comments it’s really hard especially for business owners. It’s hard for me to say something more because I live in different country
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It’s awesome that you put both the pros and the cons out for consideration. There’s ALWAYS two sides (or more) to consider with major decisions.
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I honestly don’t know. What I do know is when you work for $7-$8 an hour, it makes you appreciate your raises SOOO much more. Politics aside, it also gives you an incentive to work harder and get a better paying job.
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I think this subject is touchy for so many. I think it’s a lot about politics. One side claims they are helping the public by doing it. The other side claims that by doing it, you would hurt the public. No one is meant to live on a minimum wage job. It’s not a living wage. And to be honest, if you made everyone do 15 an hour, in the state and area of California that I live in, it’s not a living wage either. Regional difference do affect what makes it easier to live. I am just afraid that with automation, companies will not hire workers. Or like with the Affordable Care Act, Companies will hire these workers for less hours, making the small staff that they have completely overtaxed in work. The other way is to just pass the price off to the consumer. $10 a gallon bottle of milk, anyone?
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I just want everyone to make a liveable wage no matter what they’re doing. there has to be a way.
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Like the way you analysed it with the pros and cons
But it all depends on what the government is trying to achieve for the year or in the long run
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As a Talent Acquisition professional, this debate does not come up as often as it should. To be honest, I can probably argue both sides of the debate. Thank you for posing the question because its something that we need to constantly be thinking about.
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I am definitely for an increase in the minimum wage, mainly because income has not maintained the inflation rate of money and rising costs of everything else. I can clearly see the cons, I honestly feel that if the minimum wage were to increase there would be a strong argument for (almost) all other wages to increase as well. It will cause problems, but we are far from being without problems right now.
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Yes, I do agree with raising the minimum wage. As several stated above, the cost of living is going to keep going up, regardless of how much money a person makes. There are some good cons to consider, but overall, it needs to be raised. $7-$10 per hour does not feed an entire family, barely one person.
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This was a great read. I go back and forth on this issue. I remember using a wage calculator on a site years ago and it’s scary how much people who make minimum wage cannot afford. But I do agree with the cons and some of the comments here. Raising the minimum wage will not be a magic fix.
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I think a minimum wage increase should happen gradually over a few years. It’ll give business time to adjust.
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Im not an economist by any means, I live in the UK & this a tough talking point for us too. The government here dont want to raise wages for the public sector but raised their own wages by 11%
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