Category: Minimum Wage

Negative Effects of the Minimum Wage and Its Increase on Pakistan

Have you ever wondered why our business world has made such a limited progress since independence? Have you ever thought why our nation still is in the list of N11 from last 17 years and still could not be a progressively developing nation? It is because of the limits we set in every sphere of our life. It is because of the fact that we have stopped thinking big. It is because we find our satisfaction in making both ends meet. Getting more specific, it is because we have set a limit of earning in our market, no matter if it’s a minimum or a maximum limit, which by the way is PRs. 17,500. Moreover, it clearly is not a suitable law for a developing country such as Pakistan as, because of this people make limited effort in their work and get lazy and careless, although there is no doubt about the fact that a higher minimum wage would lower the government spending on welfare still Increasing the minimum wage would force businesses to reduce their employees and unemployment would rise.

If we have a minimum wage in Pakistan, then a bunch of our workers would stop striving hard and become a dawdler. If someone is guaranteed a minimum income then he/she would lose motivation in their work. Imagine if you pay a worker as much as he works, without any limit. It would definitely motivate the worker to work more and more. This will definitely polish his/her capabilities and hence our nation would start getting skilled. Moreover, if workers have a minimum wage, they would only do what is necessary to maintain their jobs and that too half-heartedly. This will end up killing their creativity and making them a dawdler. This is due to a natural human psyche that when a worker knows that what so ever innovative he/she does they will still get the same salary at the end of the month, they will actually do nothing more than they actually have to for maintaining their jobs. This will also lower the work efficiency. Lastly when some innovative and motivated worker gets a minimum wage due to lack of experience, they at times get into crisis and their attention gets diverted from work. Eventually they also end up getting lazy towards their work. This is because crisis at times can kill creativity and motivation too.

Still a higher minimum wage can lower the government spending on welfare. When we have a healthy minimum wage, people would get less depressed due to economic crisis. It will be easy for people to manage their basic health expense. Also, that motivation and innovation of the work force will not fall prey to crisis. This will reduce the government spending on the welfare of the state such as making health cards and giving education scholarships to such a wide range of public. They would just then offer it to the few who left in the dusk.

However, in Pakistan increasing the minimum wage would force businesses to reduce their employees and unemployment would rise. Pakistan Institute of Labor Education and Research (PILER) Executive Director Karamat Ali says in an interview that “The increase in the minimum wage is insufficient…especially after the recent massive rupee depreciation and acceleration in inflation”. Furthermore, when a low skilled worker cannot make his both ends meet with this minimum wage, he simply thinks of getting migrated to some other country with a higher minimum wage to support his family. This is also reducing our work force. Even a small family of five members cannot conveniently run its kitchen and bear day-to-day expenditure with the revised minimum wage of Rs 17,500. Moreover, if there is a high minimum wage then many companies would prefer free lancers rather than permanent employees. This will again increase the unemployment will a larger rate. Especially our low skilled workers would suffer a lot to make their both ends meet. If the minimum wage is increased, companies may use more robots and automated processes to replace service employees. According to a psyche of a common businessman reduction of cost and increased revenue is the utmost ambition, no one cares if the rate of unemployment or inflation increases or decreases. This is why this doctrine of setting a minimum wage is completely destructive and against the flow.

Finally, to sum up, we as a developing nation need to re think on our practices. We need a motivation to work and an innovative work environment. This is impossible with setting a minimum wage as then no one will give their best. This will end up killing their creativity and making them a dawdler in their life. Still a higher minimum wage can lower the government spending on welfare. It will be easy for people to manage their basic health expense. Also, that motivation and innovation of the work force will not fall prey to crisis. However, increasing the minimum wage would force businesses to reduce their employees and unemployment would rise. Especially our low skilled workers would suffer a lot to make their both ends meet. If the minimum wage is increased, companies may use more robots and automated processes to replace service employees. Due to all these major reasons, we should take the risk of going against all the odds and get better day by day.

Why Minimum Wage Should Not Be Raised Essay

The minimum wage is a topic widely debated by both sides of the political spectrum in the United States. But first, what exactly is the minimum wage? Fair Labor Standards Act (FLSA) of 1938 enacted by President Franklin Roosevelt established the minimum wage. The original minimum wage was 25 cents per hour. This amount equates to approximately $4.04 spending ability (Wilson, 2012). Minimum wage is a timely issue, so as an economics student, I would like to discuss my position on minimum wage. The minimum wage should not be increased because there are many negative effects correlated with it including an increase in automation, a rise in prices of goods, an increase in unemployment.

An increase in the minimum wage will result in an increase in automation. The author of ‘The Unintended Consequences of Raising Minimum Wage to $15’ expresses that “Large corporations with big budgets will weigh the increased labor costs and elect to invest in technology to displace workers. This trend will soon become prevalent in the foodservice industry, hospitality, retail, construction and manufacturing” (Kelly, 2019). To further explain this, I will use an example from changes I saw in businesses to support Jack Kelly’s argument. Employers like Walmart are already using technology to reduce the number of employees in their organization. Many Walmart has renovated its stores and initiated self-out registers. Each one of those registers in use was once someone’s job. Seeing that Walmart has currently used this practice which already lowered the number of workers it hires, then automation will be used even more widely when the minimum wage rises. Raising the minimum wage means that firms like Walmart will be switching to cheaper alternatives that can accomplish the same task as an employee to minimize its cost; in this case, they will be more inclined to acquire more self-checkout to put to use. According to the author of ‘Minimum Wage Fallacy’, “With the advances in technology, a lot of these tasks which were earlier performed exclusively by humans are now being performed by machines. Hence, human laborers are not only facing competition from humans, but they are also facing competition from machines” (Juneja). Let’s say that there is a higher fix cost of obtaining the machine at first, but in the long run, it will be cheaper and more efficient. The reason for that is because technology does not require sick leave, take no vacation, does not require maternal or paternal leave nor any fringe benefits, it only requires regular maintenance. Human are not machines, we cannot do manual labor without resting like machines, therefore, it is more likely that employers will favor automation. Employers who switch to automation will not have to spend extra money than they have to. The goal of any business is to maximize profit. So, if options are available, businesses will always decide to go with the most cost-effective choice. Of course, machines cannot replace all human labor, but manual labor done by human can easily be replaced at lower costs.

Moreover, there will be an increase in the prices of consumer goods with a raise in the minimum wage. When a business must pay a higher wage for its employees, they will have to find resources to pay their employees which equates to pricing goods at higher prices. On the other hand, Bobby Scott, U.S. Representative argues that “Raising the federal minimum wage will also stimulate consumer spending” (Scott). This politician is saying that when people have more money, they will spend more which boosts the economy. However, according to Mark Wilson, former deputy assistant secretary of the U.S. Department of Labor and current heads Applied Economic Strategies, LLC, “If a minimum wage is partly or fully passed through to consumers in the form of higher prices, it will hurt the poor because they disproportionately suffer from price inflation” (Wilson, 2012). Assuming that consumers gain more money from the minimum wage raise, but then the product costs more.

As an illustration, imagine a raise in the minimum wage from $7.25 to $15. This is a 106.90% increase in the federal minimum wage. The government’s Federal Reserve printing out more money will be disastrous. Just imagine the hyperinflation of Germany post World War II, there was too much money flowing around causing German’s purchasing power to drop. There is no way that our government will just print money to subside employers to pay for employees. Now that the thought of business receiving subsidies is out of the way, the cost will fall on consumers. Wilson also revealed that “A 2011 study of quick-service restaurants found that two-thirds of the minimum wage cost increases were offset by higher menu prices and that higher prices rather than cuts in employment and hours were the most important channel of adjustment” (Wilson, 2012). Employers must raise prices to cover their expenses, this will lead to consumers paying higher prices to each product it purchases. For instance, McDonald workers earn an average of $9.93 an hour. When the wage of its employees increases to $15 (same as 51.06%), then it is likely that your $3.99 Big Mac will not have the same price anymore. Hypothetically, if this happens, then a 51.06% increase of the employees’ wages might cause maybe a 25% increase in the price of food (assume that McDonald did not reduce the cost of production by using inferior products, and customers receive the same product quality). A 25% increase in price is the equivalent of a 0.80 cent increase in the price of the Big Mac. Consumers will be paying roughly $4.79 for something that once cost $3.99. Hence, it is not better for consumers when they have lower purchasing power.

Furthermore, the increase in minimum wage leads will also increase unemployment due to less demand for workers. From Econ 380 lectures, “the total number of workers hired by all firm equals the equilibrium employment level”. Consequently, an increase in the minimum wage will encourage more people to enter the labor force; this will expand the labor supply. Because there will be more people in the labor market, competition for the same job will be more rigorous because the supply is higher than demand (unbalance supply and demand), resulting in a higher unemployment rate. Wilson shares that “85% of the most credible studies point to negative employment effects, and the studies that focused on the least-skilled groups most likely to be adversely affected by minimum wages, the evidence for unemployment effects were especially strong” (Wilson, 2012). This point shows that there will be more competition among people, and the lower-skilled workers might be hurt because higher-skilled people have more to offer to employers.

Developing does not have strict minimum wage law as in developed countries. Therefore, it is cheaper for companies to move production overseas (Juneja). If businesses move factories outside of the U.S., then it will be even worse for employees because not only lack of job availability, they also lose jobs to foreigners. This means that there will be an increase in the unemployment rate as the employers would rather hire cheaper workers from other nations, potentially causing more human exploitation for non-U.S. workers. Besides, this scenario portrays, that businesses will always prefer to minimize the cost of production by picking the cheaper route. If the minimum wage raise is implemented, laws that limit business moving overseas are needed, because if not, considering the limited job openings, the ones that lose their jobs are U.S. minimum wage workers.

Conclusively, many factors should be considered when it comes to deciding whether to raise the minimum wage or not. Take into account the idea that technology is more available than ever causing employers to favor using automation than human, increase in the price of consumer goods lowering spending power, as well rise in unemployment, it is reasonable to believe that minimum wage should be unchanged.

Minimum Wage Essay

The minimum wage is a fundamental labor policy that sets a legal floor for hourly wages, ensuring workers receive fair compensation for their efforts. This essay explores the impact of minimum wage on various aspects of the economy and society. By examining both the advantages and disadvantages of minimum wage laws, we can gain a comprehensive understanding of their effects on workers, businesses, and the overall economy. Ultimately, the goal is to assess how minimum wage policies promote fairness and contribute to economic stability.

Enhancing Worker Well-being

The implementation of minimum wage laws has a profound impact on enhancing worker well-being. One of the primary advantages of minimum wage policies is their role in poverty reduction. By establishing a baseline income level, minimum wage lifts workers and their families out of dire economic conditions. It provides them with the means to afford basic necessities such as food, housing, and healthcare, improving their overall quality of life.

Moreover, minimum wage laws address income inequality by narrowing the gap between low-wage and high-wage workers. This promotes a more equitable distribution of income, fostering a sense of fairness and social cohesion within society. When workers are paid a fair wage, it reduces the disparities in wealth and ensures that the benefits of economic growth are shared more equally.

Additionally, increased earnings from minimum wage laws provide workers with greater financial stability and personal and professional growth opportunities. With higher wages, workers can invest in their education, acquire new skills, and improve their employability. This leads to upward mobility and a pathway out of low-wage jobs, allowing individuals to pursue fulfilling careers and achieve their aspirations.

Furthermore, minimum wage policies improve workers’ overall well-being by reducing stress and financial insecurity. Workers who are paid a fair wage experience less financial strain, leading to improved mental health and overall well-being. This, in turn, has a positive ripple effect on families and communities, as workers can better provide for their dependents and contribute to the local economy.

By ensuring that workers receive fair compensation for their labor, minimum wage laws contribute to creating a more just and prosperous society.

Stimulating Consumer Spending and Economic Growth

Minimum wage laws play a vital role in stimulating consumer spending and driving economic growth. By setting a higher wage floor, workers experience increased disposable income. This additional income allows them to have more purchasing power and spend on goods and services, thereby bolstering overall consumer demand. Moreover, higher minimum wages create an expanding market potential. Low-income workers, with increased wages, contribute to a larger consumer base. This encourages businesses to cater to this market segment, fostering business growth and diversification. Contrary to popular belief, studies indicate that modest increases in the minimum wage do not significantly impede job creation. In fact, in some cases, they can even lead to increased employment opportunities, further stimulating economic growth.

Balancing the Cost-Benefit Equation for Businesses

Minimum wage policies also contribute to balancing the cost-benefit equation for businesses. While there may be concerns regarding the potential impact of increased labor costs on businesses, minimum wage laws actually promote a competitive and sustainable business environment.

Firstly, minimum wage laws establish a level playing field for businesses by ensuring fair wages across industries. This prevents the exploitation of workers and promotes healthy competition based on productivity rather than the ability to pay lower wages. By setting a minimum standard, businesses are encouraged to focus on efficiency and innovation to maintain profitability rather than relying solely on cheap labor.

Additionally, offering a reasonable wage to employees through minimum wage policies improves job satisfaction and reduces turnover rates. When workers are paid a fair wage, they are more likely to be motivated and committed to their jobs, resulting in higher productivity and overall business performance. Moreover, businesses can benefit from lower recruitment, hiring, and training costs as employees are more likely to stay in their positions for longer periods.

Furthermore, minimum wage policies incentivize businesses to invest in their workforce, leading to increased productivity and innovation. When compensated adequately, employees are more likely to feel valued and motivated to contribute their best efforts. This fosters a positive work environment where employees are encouraged to think creatively, propose new ideas, and drive business growth.

Potential Challenges and Mitigation Strategies

While minimum wage increases are crucial for workers, they may present challenges for small businesses. These businesses may face difficulties in adapting to higher labor costs. However, policy measures such as tax incentives and support programs can help alleviate this burden and assist small businesses in adjusting to the new wage standards. Critics argue that higher minimum wages may trigger inflationary pressures. However, research suggests that the impact on overall inflation is modest, as increased consumer spending counteracts potential price increases. Considering varying living costs across different regions, minimum wage policies should be flexible and adjusted to reflect local economic conditions. This ensures a fair balance between worker compensation and regional affordability, mitigating regional disparities.

Conclusion

The minimum wage plays a vital role in promoting fairness, reducing poverty, and fostering economic stability. While it presents business challenges, the benefits outweigh the costs, leading to improved worker well-being, increased consumer spending, and a more equitable society. By carefully considering the potential challenges and implementing appropriate mitigation strategies, minimum wage policies can continue to uplift workers and contribute to a robust economy. As we strive for a society that values fairness and economic stability, minimum wage laws remain a crucial tool in achieving these goals.

Reasons Why the Minimum Wage Should Be Raised: An Essay

Imagine if you were living off $15,000 per year. You would have a hard time to support your family and have little extra money to spend on enjoyments. You would most likely not be able to go to the grocery store and buy snacks simply because you like them. You would also not be able to go to a movie or go bowling with your friends for fun. These are just a couple of the enjoyments of living off more than just minimum wage. That is why the minimum wage in the United States should increase in the coming years. There are many reasons why, but the main reasons are to keep up with inflation, raise consumer spending, and to cut government programs.

One of the reasons to raise the minimum wage is to keep families inclined with inflation rates. The United States as a country has not kept up to date with the current inflation rate. The last time the federal government increased the minimum wage was in 2009. The rate was set at $7.25 per hour. This causes a monumental gap in the amount of income and the amount of outcome a family encounters. This decade span from 2009-2019 has had a lot of inflation, but we have not raised the minimum wage with the inflation rates since 2009. The minimum wage has only increased 22 times since it was first introduced (Doyle). Many of the States in the United States have their own minimum wage with most of them being above the federal minimum wage already, but if the states’ minimum wages can increase, so can the federal minimum wage. Once the federal minimum wage is increased, the states will most likely also raise theirs.

Another reason to raise the minimum wage is to maximize consumer spending. Right now, if you are a full-time worker who earns minimum wage, you will only receive $15,000 per year. If minimum wage would increase with inflation, the current rate would be $10.15 per hour. Full time workers earning a wage of $10.15 per hour would earn roughly $21,000 per year. This would be better than earning minimum wage but still not enough to spend money on needed items (‘Raise the U.S. Minimum Wage’). The U.S. economy does not allow a person who earns minimum wage to be able to spend as much money as they want on a product opposed to someone who earns more than minimum wage.

Another reason to raise minimum wage is it will cut government programs. When government programs are cut, it causes the government to use less taxpayer dollars. Workers who earn the minimum wage lean on government programs for financial assistance to survive. If the United States would increase minimum wage from $7.25 per hour to $15 per hour, it would increase over 40 million workers’ wages in the U.S. (Babic). Although the current minimum wage of $7.25 per hour is below the poverty line for a single parent with one child, earning $10 per hour is above the poverty line (‘Raise the U.S. Minimum Wage’). If the U.S. was to raise the minimum wage, it would narrow the gap between the rich and the poor. There would most likely not be a middle class anymore (Smith). According to the CBO (Congressional Budget Office), if we raised the minimum wage to $10.10 per hour, it would bring 900,000 people out of poverty. The poor would benefit magnificently from this (‘Pros and Cons of Raising Minimum Wage’).

Another pro of raising the minimum wage is that it will keep workers employed with the same company instead of looking for companies that pay better. This will reduce business turnover rates and it will cost less for hiring and training processes. The workers will most likely be happy with the company they are with because of the pay (‘Pros and Cons of Raising Minimum Wage’).

In every situation there is always tradeoffs. So, what are the tradeoffs of raising minimum wage? Well, the answer is simple. It could cause currency deficit in some major companies. Those companies are paying more for their workers, so they have less money to spend on technological advances. An estimated 1.3 million workers could lose their jobs. This layoff could affect areas already struggling with high poverty (‘Raise the U.S. Minimum Wage’). There are also tradeoffs on what would be hurt if the minimum wage were to be increased. The increase would hurt small businesses that have small profit margins. This increase would cause employee downsizing and increase cost of goods (Smith). People also speculate that by raising the minimum wage it will cause companies to pass that raise on customers by raising prices. Business may also stop hiring new workers and limit opportunities to new workers out of college. The same businesses might outsource to countries with lower minimum wage standards to produce more jobs. The Government would also have to update the Earned Income Tax Credit (EITC). The EITC is a tax credit for low-income workers. If the minimum wage is increased before the EITC, it would not help all poor families (‘Pros and Cons of Raising Minimum Wage’).

Therefore, the minimum wage in the United States should increase in years to come. There are many reasons as to why the minimum wage should increase but the main reasons are to keep up with inflation, to maximize consumer spending, and to limit the use of government programs. Right now, the inflation rates are higher than the minimum wage. This is causing a domino effect in minimum wage workers. When minimum wage is increased, it will cause workers to buy more consumer products leading to companies’ revenues to increase. This mass spending will bring in revenue across the country. Also, with a minimum wage increase, it will decrease the amount of government programs needed which will decrease tax revenue needed. To all situations there are also tradeoffs. Increasing the minimum wage would give Americans the tradeoff of losing some of their jobs. So, next time you are in a grocery store, imagine how bad it would be living off only $15,000 per year.

Works Cited

1. Babic, Mary, et al. “6 Simple Reasons We Should Raise the Minimum Wage Right Now”. The Politics of Poverty, 15 Feb. 2019, politicsofpoverty.oxfamamerica.org/2019/02/6-simple-reasons-we-should-raise-the-minimum-wage/.
2. Doyle, Alison. “Should the Minimum Wage Be Raised?” The Balance Careers, The Balance Careers, 15 July 2019, www.thebalancecareers.com/pros-and-cons-of-raising-the-minimum-wage-2062521.
3. “Pros and Cons of Raising Minimum Wage”. Toggl, toggl.com/pros-and-cons-of-raising-minimum-wage/.
4. “Raise the U.S. Minimum Wage”. Los Angeles Times, 18 July 2019. Sirsissuesresearcher, explore.proquest.com/sirsissuesresearcher/document/2285121088?accountid=44669. Accessed 4 Nov. 2019.
5. Smith, Lisa. “The Minimum Wage: Does It Matter?” Investopedia, Investopedia, 12 Aug. 2019, www.investopedia.com/articles/07/minimum_wage.asp.

Minimum Wage Should Be Increased

Would you be able to envision yourself working 12-hours per day and just having enough cash to pay for lease and put nourishment on the table for your family? With working every one of those extended periods, you can scarcely stand to cover your utility tabs and from that point onward, you need more cash or time for extravagances like attire or get-away. You have no investment funds, in actuality, you are in tremendous obligation and you are living check to check. This is the narrative of a large number of American specialists, who are utilized on the lowest pay permitted by law. The stunning part about this story is that a huge number of Americans would be spared from this neediness life if the American government raises the lowest pay permitted by law. This would support the laborers, yet additionally, the economy since raising the minimum wage would place additional cash in the pocket of the lowest minimum wage laborers and additional spending would help reestablish shopper spending.

Very nearly 8 million Americans work all day and still fall underneath the destitution line. Some contend that raising the lowest pay permitted by law will just profit the laborers who may not require it. This contention is imperfect, as indicated by The Economic Policy Institute’s investigation, which shows that “most of the low wage workers live in low-wage households, and 84% of the workers in low-wage jobs are at least 20 years old” (LA Times, Stern and Camden). I additionally feel that raising the lowest pay permitted by law involves human pride in light of the fact that envision in the wake of a difficult day of work you check-in realizing that in spite of you buckling down extended periods, you can’t take care of your family, spread their needs and pay your living expense without government support. What sort of message does this send to an individual about the poise of their work and pride of assuming individual liability for your family? In my perspective, anybody that appears at work routinely and places in hard-working hours ought to be sufficiently paid to keep the person in question out of destitution.

Likewise, a few pundits additionally contend that raising the lowest pay permitted by law would expand joblessness immensely, in light of the fact that business will slice workers to keep the cost low. This has been refuted by an examination done by the Congressional Budget, which says “the potential employment and unemployment impacts of raising the federal minimum wage rate…are difficult to predict, but are likely to be small” (Congressional Digest, 12). Congressional Budget office additionally found that the increases in raising the lowest pay permitted by law should gauge the expenses. They found that raising the lowest pay permitted by law to $10.10 would rise cut the individuals living in neediness by 900,000 and would raise normal pay for families to multiple times the destitution line. The business would likewise profit by expanding the lowest pay permitted by law. As indicated by an examination done by the Institute of the Industrial Relations University of California, Berkeley, it found that yearly turnover among security screeners plunged from 95% to 19% when their time-based compensations were expanded from $6.45 to $10 every hour. In addition to the fact that turnover improved, 35% of the manager’s detailed enhancements in work execution and client assistance improved by 45% (Reich, Hall, Jacobs, 42). This isn’t only useful for business, yet additionally incredible for the economy. Raising the lowest pay permitted by law will decrease the joblessness rate because of representatives staying at their particular employment and not going on government joblessness benefits.

Moreover, the other explanation the lowest pay permitted by law ought to be raised is a direct result of the living pay. As per Pennsylvania State University, a living compensation is “the hourly rate that an individual must earn to support their family, if they are the single provider and are working full-time (2080 hours per year)”.

So, in conclusion, I am absolutely convinced that the minimum wage should be increased.

The Benefits of Raising the Minimum Wage for America

Minimum wage is the minimum hourly wage an employer is allowed to legally pay his or her workers a day. It was created as a direct result of the Fair Labor Standards Act in 1938 and provides a set minimum income. The current minimum wage in the USA is at $7.25 an hour. Although different states have varying minimum wages, the debate over whether to raise or lower it remains a current issue. The minimum wage should be increased to $15 an hour in order to decrease our poverty rate in the US and to benefit our economy.

Many argue that increasing minimum wage will lead to more job layoffs by employers and a higher rate of unemployment. According to Sklar, Holly, “The Congressional Budget Office projected that a minimum wage increases from $7.25 to $10.10 would result in a loss of 500,000 jobs”. This means that many people would have to lose their jobs in order to increase the minimum wage. Although this statement has been claimed many times, studies have shown that if minimum wage is gradually increased at a constant rate, it will have almost no effect on unemployment and may actually provide more job opportunities.

Increasing the minimum wage would greatly improve the American economy. When a person’s income increases, they tend to spend higher amounts on items and products while making more money. As stated by David Cooper, “A $15 minimum wage by 2024 would generate $120 billion in higher wages for workers and would also benefit their communities. Because lower-paid workers spend much of their extra earnings, this injection of wages will help stimulate the economy and spur greater business activity and job growth”. This means that since workers would have more money than before, more could be spent on buying items and products instead of having to save it all. As claimed by Bill Gardner, “Increasing the minimum wage provides an immediate preventive benefit to a large number of highly stressed people”. As a result, it would create a happier and more productive society. In short, increasing the minimum wage would spur business activity and create a happier American society with a greater living standard.

An increase in minimum wage would also lead to a large decrease in America’s poverty rate. As people make more money, they are more likely to afford the basic necessities and have a decreased chance of becoming broke. As mentioned by Molloy Aimee, “The Government expenses for social programs aimed at the poor would potentially be reduced. This would result in slightly lower taxes for other Americans”. In other words, since the American taxpayer could pay less for these social programs, they could save more money and be able to pay more bills and taxes as a result. As stated by Elise Gould, “The Congressional Budget Office reports that the Harkin-Miller Bill to raise the minimum wage to $10.10 would cumulatively boost incomes of people below the federal poverty line by $5 billion”. This implies that increasing the minimum wage would directly affect the poverty rate positively by lifting a large number of workers from poverty as a direct result and improve their standard of living. All in all, increasing the minimum wage would allow the American taxpayer to save their money by allowing them to pay less for the social aid programs and lift people many people out of penury since they would be earning a greater income.

In conclusion, the minimum wage should and must be increased to $15 an hour. It would also greatly improve our economy by supporting business growth and providing workers with more money. Therefore, allowing them to spend more on items and products. It would also directly lift many American citizens right out of poverty and decrease taxes for social aid programs for the people living in destitution. We must stand and fight together to increase the minimum wage if we want to see a better U.S. economy and the lower poverty rates in America.

Work Cited

1. Gardner, Bill. ‘How to Improve Mental Health in America: Raise the Minimum Wage’. Gale Opposing Viewpoints Online Collection, Gale, 2019. Gale In Context: Opposing Viewpoints, https://link.gale.com. Accessed 11 Nov. 2019. Originally published as ‘How to Improve Mental Health in America: Raise the Minimum Wage’, New Republic, 4 May 2016.
2. Gould, Elise. ‘Increasing the Minimum Wage Would Help Reduce Poverty’. Poverty in America, edited by Tamara Thompson, Greenhaven Press, 2015. At Issue. Gale In Context: Opposing Viewpoints, https://link.gale.com. Accessed 5 Nov. 2019. Originally published as ‘Increasing Wages is an Effective Poverty Reduction Tool’, TalkPoverty.org, 18 June 2014.
3. Molloy, Aimee. ‘Low Wages and Limited Employment Opportunities Cause Homelessness’. The Homeless, edited by Jennifer A. Hurley, Greenhaven Press, 2002. Opposing Viewpoints. Gale In Context: Opposing Viewpoints, https://link.gale.com. Accessed 11 Nov. 2019.
4. Sklar, Holly. ‘Raising the Minimum Wage Will Reduce Poverty’. Poverty, edited by Roman Espejo, Greenhaven Press, 2012. Opposing Viewpoints. Gale In Context: Opposing Viewpoints, https://link.gale.com Accessed 11 Nov. 2019. Originally published as ‘Raise the Minimum Wage to $10 in 2010’, LetJusticeRoll.org, 22 July 2009.

Reflections on Whether America Needs a Minimum Wage Increase

“No man can be a good citizen unless he has a wage more than sufficient to cover his basic cost of living” (Roosevelt, 1910). This quote as used in a speech given by Theodore Roosevelt, when giving a speech about what he called ‘new nationalism’. In this speech he spoke about setting a minimum wage for employers that they must pay to their workers Since 2009 the minimum wage has been $7.25 an hour or about $823 after taxes. In 2016 president Barack Obama addressed the nation about raising the minimum wage to 10.10 an hour, after some time many looked at a good goal to be $15 an hour. While many argue that this is a bad idea, there are many reasons such as the loss of jobs, reducing incentive for education, and rising prices for consumer goods. These points can be disputed with a look at how the working class is currently being affected.

Firstly, it will make employers less likely to hire and lose about 500,000 jobs because of the higher rate of pay employers will be less likely to hire people they will have to pay more. An estimated 82 million people work for hourly wage, which comes to 59% of all workers in the U.S. From those people 4.9% have 2 or more jobs (Forbes, 2018). When doing the calculations that’s still a little more than 4 million workers. If the minimum wage were raised a good amount of those workers would no longer need 2 or more jobs and that would open more jobs for those who are unemployed.

Think about if there were a 22-year-old who works 2 minimum wage jobs, getting paid 7.25 an hour, working about 60 hours a week. At the end of the month after taxes the paychecks come to about $1,375 a month, after taxes, coming to about 16,500 a year. This still puts that 22-year-old well under the nation’s poverty line of $25,750 a year. This 22-year-old represent many of the workers in our country. If we raise the minimum wage to $15 an hour then many people will be getting about $1,860 a month for 40 hours a week. At 22,320 a year many of those people will be able to successfully live off one job opening many more jobs.

Secondly, it will reduce the amount of young people who will want to seek a higher education. Many argue that if the nation increasing minimum wage would make many people no longer want to seek higher education because they will be fine where they are and see no reason to seek further improvement. When it comes down to it 83% of Americans say they cannot afford college. Only about 16% of low-income families, or families who earn less than $39,500 a year, can afford to send their children to college. This is because many of those students cannot pay the tuition rates that often exceed their own yearly earnings, nor want to end up in debt from student loans. Raising minimum wage would allow more people to afford the costs of seeking higher education and moving to higher paying jobs. In the end raising minimum wage would also allow more people to have lower student loan debts and give more workers a reason to go to college including the growing number of younger people who are becoming independent and must pay for everything themselves.

Thirdly, increasing minimum wage would cause many employers to raise prices to cover the cots needed to pay employees. Many worry that if we raise minimum wage, it will make prices go up because the employers are needing to pay more to keep up with the minimum wage rate. the simple fact is costs of consumer goods are going to continue to rise anyway. In 2010 the cost of a burger at McDonald’s was about $0.89 in 2018 the cost of that same burger is now 1.09 and the sizes has gone down. Keep in mind that the minimum federal minimum wage has not risen, many states and cities have risen it, but in the end many workers still only receive this $7.25 an hour. Inflation has always been an issue and while increasing minimum wage may cause the prices to rise, they are rising anyway.

Think about it like this if a single mother has 4 children and works for minimum wage at 2 jobs for 70 hours a week. She will end up with about $1,660 a month. Even if she found a place to rent for $1,400 a month, being right under national average. With utilities being about $100 a month. She would only have about with $260 for all other expenses for herself and 4 children. Back in 2009 when the average cost of rent was $886 a month this made much more sense, yet even with no increase of minimum wage prices have continued to rise.

In conclusion, the federal minimum wage will cause change, but most of the change will be needed. It will allow workers to better support themselves, which was the idea first presented by Roosevelt when the nation first created minimum wage.

Works Cited

1. BECKHUSEN, Julia. “About 13M U.S. Workers Have More Than One Job”. The United States Census Bureau, 16 July 2019, www.census.gov/library/stories/2019/06/about-thirteen-million-united-states-workers-have-more-than-one-job.html.
2. Jitchotvisut, Janaki. “Here’s What a Fast-Food Burger Cost the Year You Were Born”. Insider, 28 Sept. 2018, www.insider.com/fast-food-burgers-cost-every-year-2018-9#in-2013-your-burger-cost-an-average-of-220-24.
3. Musto, Pete. “Low-Income Students See Low Graduation Rates”. Voice of America, 2017, www.voanews.com/student-union/low-income-students-see-low-graduation-rates.
4. “Pros & Cons – ProCon.org”. Minimum Wage, 2019, minimum-wage.procon.org/.
5. Slack, Megan. “From the Archives: President Teddy Roosevelt’s New Nationalism Speech”. National Archives and Records Administration, National Archives and Records Administration, 2011, obamawhitehouse.archives.gov/blog/2011/12/06/archives-president-teddy-roosevelts-new-nationalism-speech.
6. Stoll, Ira. “9 Reasons Why Raising the Minimum Wage Is a Terrible Idea”. Reason.com, Reason, 3 Mar. 2014, reason.com/2014/03/03/9-reasons-why-raising-the-minimum-wage-i/.

Essay on Negative Effects of Raising Minimum Wage

Most of exchanges of goods and services, in modern times, said to be dictated by the ‘law of supply and the law of demand’. The former being that as prices rise the greater the number of suppliers, willing and able to supply and the later, as price rise, the fewer the number of people willing and able to buy the good. The interaction of the two laws leads to the market equilibrium i.e. the point at which demand and supply meet. If there is excessive demand for a certain service or a product the price, therefore, increases. This triggers an increase in supply so that suppliers benefit from the rising price and people’s wants. This law is reflected in the labor market. If there is an excess of workers in the market, meaning that fewer companies wish to hire workers than there are workers available, the price of the labor will diminish and vice versa. This is because each individual worker is less valuable to the firm as they have alternatives. Nowadays, several governments in several different countries have adopted a minimum wage policy. The minimum wage can be defined as “the smallest amount of money that employers are legally forced to pay someone who works for them”. This set of rule guarantees a certain amount of money that a worker will receive for their labor. Any minimum wage is intimately connected to the economy of a community. Thus, changes to the minimum wage have knock-on effects for the local community. Increasing the minimum wage will, arguably, bring out drastic negative repercussions for whichever society. It can ultimately cause a decrease the number of jobs available in the local community and it may also cause firms and companies seek to relocate to areas with a lower minimum wage.

The most salient (and widely accepted) argument against the minimum wage, is that raising it will lead to depriving those most in need of job positions. Whilst the minimum wage does guarantee workers that they will receive at least a certain amount, this is only helpful for those in employment. Although this insurance of a certain amount of wage might seem enticing, its effect will likely be more detrimental than positive in the long run. Employers will dislike the increasing price they have to spend on labor. In order to combat this, they may choose to have fewer workers working for the business, so as to maintain the same costs as before the introduction of/change to the minimum wage. Even a thriving business that has more than enough orders to make products and render services, ultimately, the fall in the size of the workforce will prevent the business to further expansion and profit. As the minimum wage increases, numerous people working a part-time job, or people with mini-jobs will have a high probability of losing their work, as they are less valuable to the firm than full-time workers. Owners will forgo employing local workers in favor of immigrants, who are often cheaper. The increased minimum wage will likely force the employers to maintain more valuable workers who are better paid by letting go part-time job workers. They may even choose to pursue a nepotistic strategy, keeping their family members employed. This will definitely prove devastating for who are newly redundant. Furthermore, the general price level of goods tends to rise as the minimum wage goes up. Food, rent, groceries, beverages and the price of several other necessities will increase which will only serve to worsen unemployed people’s vulnerable economic status. People who lost their job in due to the increased minimum wage may be forced to relocate to an area with a lower minimum wage and/or lower living prices. This brain drain will lead to a severe resentment from low-wage workers and intensify the polarization of the ‘haves and the have-nots’ since people with high-skill sets and who get paid enormous wage do not get affected by an increased minimum wage.

When considering this controversy, a great epitome of this could be the situation in South Korea. The intense increase in minimum wage is currently viewed as an obstacle that deters any advancement to South Korea’s economy. South Korea’s economic structure is rather different from that of the US, and that of its wealthy European counterparts. The vast majority of the country’s GDP is attributed to the overseas economic activity by the conglomerates like Samsung, Hyundai and others, and yet a significant number of people are self-employed. This is due to the fact that many choose to retire or are let go well before the mandatory retirement age of fifty-five. Many of these workers set up their own business rather than seeking out another employer. Some of the most popular ventures include but are not limited to: a personal cafe, fried-chicken delivery company, a restaurant. These businesses usually consist of only an owner and several part-time workers who work for the minimum wage. If the minimum wage is artificially placed at a high price and continues to rise, it will damage all these self-employed businesses. With minimum wage still rising, the owners will not be able to afford to keep as many employees as before, leading to nationwide layoffs of part-time and ‘mini’ jobs. This has been observed in South Korea with the introduction of the government’s economic plan: The Wage-led Growth policy. It saw a 16.4% rise in the South Korean minimum wage, the steepest rise in South Korean history. The policy has been unpopular as seen in the manufacturing sector. The number of factory workers decreased by 79,000 in May 2018. One thing that sets the Korean economy apart from others is a large number of part-time job workers and ‘mini’ jobs. According to Statistics Korea (KOSTAT), in the first quarter of 2018, the number of people working fewer than 36 hours was 4,150,000, the highest rate of all time. It is hardly up for debate that the ‘mini’ job is the new trend in the labor market of South Korea. People who worked fewer than 18 hours per week increased from 1,324,000 to 1,426,000, i.e.7.8%. Whilst these ‘mini’ jobs and part-time workers are getting paid with minimum wage, the radical increase of minimum wage led to businesses to lay-off several workers. Which in turn causes a rise in a number of self-employed workers or machines. As mentioned above, a rise in minimum wage inevitably leads to a rise in the price of every single good and service within a said economy. According to Korea Consumer Agency, the price of processed foods, such as soft drinks rose 11.9%, as did pork belly (5.6% rise of price) – a food staple in South Korean cuisine. The quality of life for the workers may have been enhanced due to their better salary. However, countless self-employed businesses are shutting down and laying off workers. This proves that a minimum wage is not a universal fix all. The nature of the South Korean economy shows a group that is by no means negligible are worse off. The collapse of these self-employed owners means the collapse of Korean-middle class. The debts from these self-employed individuals have reached nearly $300,000 per person, a figure derived from the division the total debt of self-employed startups by a number of business owners. The total amount is $465,594,280,607, and by dividing this by the 5,600,000 self-employed owners leads to $300,000 per a self-employed owner. If half of these self-employed people shut their business down and are unable to repay the debts, the Korean economy will struggle drastically, as these startups form a significant part of the economy. If these companies were to default payment they would face bankruptcy, putting the whole economy in a weaker position. This case shows a devastating effect that happened in the Korean community, in the nation as a whole.

When taking in to account the global implications, the problem and controversies surrounding the minimum wage prove not only to be a South Korean issue but rather a global one. This can be seen by the radical increase in the minimum wage in Seattle, in the United States of America. In 2014, the Seattle state increased its minimum wage from $9.47 in 2014 to $11 in 2015, and later $15 in 2017. This case is particularly interesting as it attracted international attention and sparked debate as to the benefits or disadvantages of the decision. The Seattle state, like the South Korean government, had intended to cause income-led growth, stating that “boosting the quality of low-skilled, low-wage workers will trigger an increase in consumption, eventually spurring the whole economy”. Many of the workers were not paid enough when considering the high price-index in Seattle – a significant driving force behind the government’s drastic plan. After observing the consequences for three quarters in 2016, the Washington University concluded that low-skilled workers were operating in Seattle regardless of which industry. The workplace unit decreased about 7% in the short period of time and the working hour decreased 9.4%, in spite of the rise in wages. The crucial takeaway is that the change in workers’ monthly wage actually fell: it decreased 6.6%, which is about $125 per month for a worker. The average of low-skilled, low-wage workers monthly wage declined from $1,897 to $1,772 declining $125. Monthly wage diminishing $125 per month is not a trivial, subtle change that could be ignored when considering the amount of wage, they receive in a month. Especially when taking into account the rise in the cost of necessities such as buying foods at the grocery store and living expense ultimately leaving workers in a more desperate and worse position than before. Professor Jacob Vigdor, from Washington University, concluded in this research that increasing the minimum wage had not worked out well in the past, where most of the people had their job in manufacturing factories. Ensuring their wage, leading to their consumption and superior living quality, will lead to a better economy of a nation. However, circumstances and the structure of the economy is completely different in this modern day, where most people work in a service industry and part-time jobs, concluding that blindly raising the minimum wage will backfire and be harmful to the economy, as was the case in the United States.

When looking at the example of city Seattle, the increase in minimum wage triggered a deficit as it did in other countries. Considering the particular structure of the Korean economy i.e. the independence of workers, the sharp rising of minimum wage definitely seems to be more harmful compared to some positive effect it brings to the community.

Strengths and Weaknesses of the Minimum Wage Increase

The minimum wage increase has been an ongoing conversation among almost everyone which it should be because it is a very important topic. Increasing the minimum wage has seen many pros and cons. Many people are unaware of what the words minimum wage even mean, and that is the lowest amount of pay that an employer is allowed to pay their employees by law. On October 1st, 2017 minimum wage in Ontario was $11.60 and in January 2018 minimum wage in Ontario went up to $14.00 per hour, this was a $2.40 rise. When this happened, many employers dealt with the downfall; and now again we want it to go up yet again. It may only just be $1.00 but it will affect many people’s lives negatively. Employers get negatively affected by the increases in the minimum wage because it results in their payroll expenses going up as well. As a solution to this issue hey will begin to lay off employees. Moreover, employees face the biggest cons of the increase because they will have to pay a lot more in taxes which will decrease their income.

Increasing the minimum wage may seem like a good idea when you just look at it as plain as that: increasing how much we get paid. We never really look at it past that fact; which is why many of our opinions on the topic stand where they do. I have come to the conclusion that increasing the minimum wage will not benefit us. Increasing the minimum wage will increase inflation due to the fact that people will be making more money so the prices of goods and services will go up as well. Unemployment would rise due to the fact that business will want to hire people who are more skilled or have more experience compared to the employees they have and were usually hire.

In order to fully understand how minimum wage affects our society we need to look at where it all started – Fair Labor Standards Act. In 1932 the act was drawn up by Senator Hugo Black where it required employers to have a 30-hour workweek, as a result, there was a lot of push back (Perez, 2015). A big push that came for the act was in 1936 when President Frederick D. Roosevelt was in New Bedford, Massachusetts and a little girl explained to him that her working conditions were getting worse and her pay got cut down from $11.00 to almost $4.00 per week (Perez, 2015). Moving forward just 6 years later a newly changed act was approved for 8 hours days and 40 hours week and on top of that if employees worked 44 hours they would get paid for overtime (Perez, 2015). The act made the minimum wage $0.25 per hour and since then it has gone up about 22 times (Perez, 2015). The act covers more than just the minimum wage aspect of employment; it also touches on children under the age of 18 are not permitted to work dangerous jobs such as mining or manufacturing (Perez, 2015). On the other hand, the act does not look out for seasonal employees, executives, and some other employees (Perez, 2015).

One of the reasons Canada adapted minimum wage was because of this act and the government saw how many benefits came from it (Derry et. al, 1922). In order to put an end to the exploitation of women and children, Canada brought in minimum wage (Derry et. al 1922). When it first came to Canada people were either for the minimum wage or against it. Those who were for it thought that it would improve workers living standard and reduce poverty and inequality. Those who were against it argued that it would get rid of jobs and increase poverty with those who were lacking skills (Derry et. al, 1922). All across Canada, the minimum wage laws are very different. For instance, in 1917 Alberta passed a law that stated no person working in a factory, office building, or shop would be making any less than $1.50 per shift; this was adapted from Utah and Arkansas where they had very similar laws (Derry et. al, 1922). On the other hand, when looking at Manitoba we see that in 1919 they passed a law that restaurant and office workers had to make a weekly minimum of $12.50 (Derry et. al, 1922).

Moving on, looking at the positive effects of the minimum wage increase. Starting off with the increase in productivity when the minimum wage goes up as well. Studies done by leading economists have shown that when minimum wage increases the morale and work ethic of the staff when they truly believe that they are getting paid a fair wage (Hon, 2014). Many economists have claimed that when employees get paid more it results in better physical and mental health and reduced tiredness, which all in all makes for higher productivity (Hon, 2014). According to a research paper done by economists saw that when employees are making more there is a lower chance of them missing work which results in higher productivity (Bucila 2010). Taking Amazon as an example they raised how much they were paying their employees to $15 and saw big growth in how productive their employees were. The reason behind this was because no one wants to lose a job that pays them more then what minimum wage is right now; therefore, they work harder than they need to in order to keep their jobs (Bellemare 2009). Looking at the psychology aspect of increasing productivity it has been suggested that employees’ attitudes, satisfaction, and behaviors influence the way they work (Kim et, al. 2019). It is also seen that with better pay, training, and job security would make employees a lot more satisfied which results in them working harder and increasing productivity (Kim et, al. 2019).

Low wages play a major role in poverty and health inequality. Therefore, if the minimum wage was increased inequality would be decreased (Dube et, al. 2007). The Canadian Institute for Health Information came out with a report in 2015 stating that labor market policies such as minimum wage was a big poverty reduction strategy that would reduce health inequality (Lenhart et. al, 2017). It has been shown in multiple different studies that people with lower incomes have worse health outcomes for instance, higher rates of chronic disease and lower life expectancies (Lenhart et. al, 2017). One province that is dealing with this issue the most is British Columbia due to the fact that employment income largely determines whether a family is able to avoid poverty and have the right tools to avoid poor health (Lenhart et. al, 2017). These conditions are known as social determinants of health and when someone has a higher social position, they will have better health based on their circumstances and goods and services they have access to (Lenhart et. al, 2017). According to a research report done by the Provincial Health Services Authority, it was confirmed that low-income British Columbians are at a much greater risk of suffering from chronic diseases in comparison to citizens who make much more (Lenhart et, al. 2017). The Health Officers Council of British Columbia found that in 2008 there was a large number of deprived people which included the unemployed and working poor who all had lower levels of health than the average citizen (Lenhart et, al. 2017). Going forward just 5 years they updated their statement by speaking about how the differences in life expectancy between the poor and wealthy had become much larger which means that the health gap has not stopped winding (Lenhart et, al. 2017).

Furthermore, increasing the minimum wage not only has benefits but also drawbacks. These drawbacks include increasing both unemployment and inflation. A recent study done by the Federal Labor Standards Review showed that if there was about a 10% increase in minimum wage will reduce employment by 0-3% (Kerr, 2008). It has also been seen that in many minimum wage studies, little to none have shown positive employment effects (Kerr, 2008). Moving on, if the minimum wage is increased it is more likely that many young workers and less skilled workers will lose their jobs (Lammam et, al. 2018). When the minimum wage gets increased employers to respond by reducing the number of employees or cut down the number of hours worked. Many low-paying jobs such as wholesale and retail trade saw a lot of unemployment in the past year when the minimum wage went up to $14.00, around 50,000 people across the country lost their jobs in this sector for the first half of the year (Lammam et, al. 2018).

In addition, not only will unemployment increase but inflation will become more prominent. In 2017, when minimum wage went up to $11.40 CPI (consumer price index) inflation was boosted as well in 2018 (Brouillette et, al. 2017). The report predicted that if the minimum wage were to go up even more in 2019 that inflation will go up 0.2 percentage point in comparison to the 0.1 percentage point it went up in 2018 (Brouillette et, al. 2017). An example that was used was when McDonald’s employees asked for a wage of $15 in 2017 which would mean they would make around $30,000 a year (Brouillette et, al. 2017). Most employees at McDonald’s are teenagers and teenagers making $30,000 a year is more than some adults, and teenagers don’t have many responsibilities (Brouillette et, al. 2017). As a result, the money they make will be going to goods and services which increases inflation. Increasing inflation as a response to increasing minimum wages is called wage-push inflation (Machlup, 1960). In order to make a profit after an increase in wages, employers must raise the prices they are charging for their goods and services (Machlup, 1960). It has been seen that inflation and minimum wage increasing go hand in hand. This is because when inflation goes even higher up, higher wages are needed in order to satisfy this (Machlup, 1960).

All in all, after looking at both sides of the argument I understand the benefits and drawbacks of increasing the minimum wage. Increasing the minimum wage has been said to increase productivity in many different industries of work (Bucila, 2010) as long as the employees are satisfied and are happy with their work (Hon, 2014). On the other hand, some industries work cannot be measured, therefore that productivity is unable to be seen. In addition, employee satisfaction is not something that can be easily seen. Increasing the minimum wage gives an opportunity to people who usually do not make as much to close the gap between them and wealthier people in many ways, for instance, health-wise (Lenhart et. al, 2017). Moreover, as the minimum wage increases the prices of these goods and services that people need health wise will go up as well. Therefore, people who do not make as much will be at a disadvantage once again. When looking at the drawbacks of increasing minimum wage the unemployment rate for low-skilled workers becomes very high (Lammam et, al. 2018); yet those workers are the ones who have seen the most benefits from previous increases minimum wage in previous years (Neumark, 2015). With minimum wage going up it causes inflation to go higher as well (Brouillette et, al. 2017). On the other hand, increasing the minimum wage is not the only reason why inflation increases. Inflation has been prominent in our economy for many years even when the minimum wage was at a low. Therefore, we are unable to put all the blame on increasing minimum wage for the reason of inflation (Haberler 1960). Other reasons for inflation to begin to rising include: import prices, raw material prices and declining productivity (Haberler 1960).

In conclusion, increasing the minimum wage has many strengths and weaknesses. To begin, it allows for the productivity of employees to go up due to the fact that they do not want to lose their well-paying jobs. In addition, increasing the minimum wage allows the poor to close the gap between them and the richer ones. On the other hand, increasing the minimum wage causes a lot of unemployment in teenagers and low-skilled worked because employers do not want to pay someone who has little to no experience. Furthermore, increasing the minimum wage allows for the prices of goods and services to go up as well which results in inflation. In my opinion, increasing the minimum wage always seems like the best thing that could happen for us as a society because we are getting more money to spend, but there is much more to just that. I strongly believe that increasing the minimum wage will hurt us more than anything. The reason for this is that many people will become unemployed due to employers not wanting to pay so many people. On top of that, inflation will drastically increase because people will begin to make a lot more money and as a result, the prices of goods and services will go up with it.

Raising the Minimum Wage Will Reduce Poverty: An Essay

Introduction: The Current State of Minimum Wage and Poverty

Neediness keeps on developing in America. The lowest pay permitted by law in the United States is $7.35- every 60 minutes awfully low in the present society. Key costs, for instance, gas and lodging costs, have gone up fundamentally since the lowest pay permitted by law was last changed in 2007. The laws making the lowest pay permitted by law were proposed to improve the way of life and abatement neediness. Raising the lowest pay permitted by law is a crucial advance in diminishing neediness and allowing each family the chance to endure and succeed. A great number of Americans are beneath the neediness line and need an expansion in pay. The lowest pay permitted by law must be raised in light of the fact that it will decrease neediness and help the common laborers to help their families.

Historical Context of Minimum Wage Legislation in the U.S.

In 1933 President Franklin D. Roosevelt created a movement of financial arrangements called ‘The New Deal’. One of those arrangements which ended up known as the lowest pay permitted by law, ensured that all specialists in America win enough pay to accommodate their families. The New Deal denoted the start of government control of wages to make certain each laborer has the capacity to acquire a living pay. The monetary framework was made by individuals, is kept up by individuals, and is always adjusted by individuals.

The Role of Government and Ethical Considerations in Minimum Wage Laws

To support a dynamic economy, the administration needs to assist the poor with their assets. The poor will be poor not on the grounds that they don’t work, but since government has neglected to give compensation that American families can get by on. Cost can be an issue yet the expense to finance the specialists with low-wage employments are higher. Recognizing moral and religious conventions should be thought about. In Judaism and Christianity God says individuals in a network need to help the poor exist in that network. Our present the lowest pay permitted by law never address the expansion in gas, lodging and medicinal services costs the average workers battle to pay for. On the off chance that legislature has the chance to get a huge number of families out of neediness, at that point why not accept that open door to help individuals help themselves.

Living Wage Movement and Local Wage Increases: Case Studies and Impacts

Actually, raising wages at the nearby and state level demonstrates an expansion in work and a diminishing in families on welfare. Starting in 1995 a living compensation development has constantly attempted to influence nearby and state governments to build the lowest pay permitted by law. Activists from chapel gatherings and non-benefit associations have indicated developing enthusiasm for affecting many urban communities over the United States. For instance, after Santa Fe, New Mexico’s lowest pay permitted by law went from eight dollars and fifty pennies to nine dollars and fifty pennies work expanded in the city’s inn industry. A large number of these associations have fled to a portion of the significant urban communities in America and showed their perspective in affecting the lowest pay permitted by law levels. Conversely, raising the lowest pay permitted by law may mean organizations should finance the expansion in pay by raising costs on their items. By direct association there will be less spending by the customers. Obviously, raising the lowest pay permitted by law has constructive outcomes differing from state to state contingent upon the essentially greater expenses of living in a state, for example, Alaska contrasted with a territory of California’s way of life.

Public Opinion and Political Bipartisanship on Minimum Wage Increases

Broad investigations have demonstrated that most of Americans bolster making a living pay. As indicated by a recent report taken by the Employment Standards Administration, eighty-three percent of Americans concur that the lowest pay permitted by law ought to be brought up in request to diminish the destitution. Bill Samuel of A.F.L.- C.I.O. states, “The open is path in front of Washington. They consider this to be a fundamental matter of reasonableness, the supporting of essential work law in this nation, a story under wages so we’re not rivaling Bangladesh”. Many issues in Washington bring partisanship between the Democrats and Republicans, however, in raising the lowest pay permitted by law the two gatherings show bipartisanship. Measurements recommend ninety-one percent of Democrats and seventy-two percent of the Republicans support a compensation increment. As almost everybody expects lower-breadwinners are in most noteworthy help of an expansion in the lowest pay permitted by law in any case, seventy-six percent of the raised workers are similarly as sympathetic for an update in wages.

Consequences of Minimum Wage Increases on Employment and Economy

Raising least wages won’t build joblessness. By giving the lowest pay permitted by law laborers an expansion in pay implies giving the specialists extra cash to spend consequently, making an accommodating gradually expanding influence on the country. Shopper spending is a fundamental variable to an effective budgetary market. Margot Dorfman of U.S. Lady’s Chamber of trade pronounces: “When organizations don’t pay a living compensation all general public pays. We pay as organizations and networks endure monetary decrease”. The measure of duty dollars going to families that are not ready to manage the cost of the necessities required for their consideration is a cosmos of the issues that face America’s economy. Extraordinary segments of the mounting national obligation are expected to finance the low – working class families. Each time the lowest pay permitted by law has improved, customer spending has enhanced. The nation has experienced occasions with no difference in the government the lowest pay permitted by law. States assumed the liability into their own hands and steadily improved the lowest pay permitted by law, rewardingly encountering prevalent private venture patterns.

Faultfinders of raising the administrative the lowest pay permitted by law proposes will add to a subsidence since organizations would be more averse to procure new representatives and the central government ought not meddle with a free-showcase society. Expanding the business’ untalented laborer’s checks will make strain to build the gifted workers checks too, leaving organizations with less cash. The truth is thirty-seven million Americans are living in destitution and are on sustenance stamps. The central government’s point of convergence ought to be to enable natives to give the most ideal life and give families openings. Essayist David Ramm proclaims that “Altering the lowest pay permitted by law laws is the same a social approach than the one-hundred billion dollar a year home loan reasoning which enables individuals to buy homes”. Critics finish up in the event that every city pre-decided higher living wage, at that point business visionaries would preferably improbable to set up organizations there. On the off chance that urban communities are weakened by neediness and separated neighborhoods, in this way, business visionaries are not going to bring their organizations into those urban areas either. The government needs to give organizations considerable tax reductions and less limitations to give the organizations the cash to raise their specialist’s checks. Advocates state, for instance, that the open help for raising the lowest pay permitted by law is on the grounds that the open is acting candidly instead of legitimately. Because the open thinks about the poor does not propose the open is acting irrationally or financially unreliable.

Addressing Counterarguments: The Debate over Minimum Wage Increases

A few reasons represent the developing compensation hole between the rich and the poor as a result of huge organizations. For instance, Walmart is a standout amongst the best open partnerships in the nation, yet, the company is outstanding for giving their representatives fundamentally low wages. Substantial retailers, for example, Walmart establish ruthless estimating, which makes their items costs underneath the market an incentive to push the challenge away. At the point when the challenge leaves, the organization can raise costs essentially. The United Food Services says that Walmart influences American citizens on the grounds that their medical coverage covers just forty-three percent of their laborers. Supporters debate that Walmart is simply in paying low wages because since the beginning incompetent specialists have dependably had lower pay rates. Educator of business morals at Babson College, Jim Hoopes closes, “Front-line administration part workers have never made bearable wages”. Mr. Hoopes neglects to refer to that partnerships have never gotten the measure of cash Walmart has in the previous decade. Actually, a specific level of vast organizations misuses the poor by not paying them decent wages so as to expand the company’s benefits.

The pay hole between the rich and poor is enlarging a result of salary disparity. An examination done by essayist Noel Merino analyzed the most generously compensated CEOs since the twenty-first century and have taken in the normal pay they were gaining is thirty-seven and a half million dollars for each year. The normal laborer is the thing that make their organizations fruitful and enable these officials to acquire top pay. Without the run of the mill laborer the organization does not exist. Maybe, salary disparity exists since stream down financial matters isn’t working. Lower class families are not expanding the pay as quickly as the high-salary family units do. Training, off shoring, innovation, tax breaks and associations are for the most part supporters of pay disparity.

The remote challenge and innovation hurt the average workers. Employments once thought as secure are presently being re-appropriated to China and India. Everything Americans have are made in China and numerous innovative employments are re-appropriated to India, pulverizing a great many occupations for each year. The re-appropriating and innovation keep on augmenting the compensation hole between the gifted and physical work employments. The specialists in China and India are happy to work for less pay than the Americans in light of the fact that the typical cost for basic items in America is altogether higher. Bosses misuse the open door since its less expensive for them. Maybe, businesses never considered the proviso could balance since individuals would be out of employments, in this way, unfit to buy their items.

The powerlessness from those from low-salary families to acquire a school training is adding to stale livelihoods. Getting a four-year degree is a definitive open door for money related security, lamentably, it’s about outlandish for the poor to bear the cost of even junior school trainings. After the second World War the GI Bill was executed for all officers getting back home to get a free school instruction. A huge number of men and lady presently were taught, helping Americas’ economy prosper. Americas’ training framework is upheld by nearby property charges. Wealthier neighborhoods are accepting better schools and the poor get ill-advised training. Consider the financial perspective since it clears up how extraordinary the youthful grown-ups between the ages of nineteen to twenty-four act among lower and higher salary families they originate from. The school instructed people will in general be progressively capable by not having youngsters before graduating and getting hitched, contrarily, non-taught people will in general get pregnant a lot prior making them relinquish their tutoring.

The United States government has a critical activity to ensure each family has a reasonable chance to convey monetary help to the poor. This nation can never again stand to pay for every one of the necessities the lowest pay permitted by law neglects to give. The cash the administration is paying for the poor in social insurance costs extraordinarily surpasses the expense of just raising the lowest pay permitted by law and putting more cash into lower-pay families. Individuals need to begin having the capacity to climb the pay scale and demonstrate to them it’s an incredible reality the general population can accomplish whenever given the chance. Raising the lowest pay permitted by law will just upgrade open door for the more youthful age to succeed and climb. Instructing the young about high schooler pregnancy and penitentiaries we can significantly decrease the measure of disheartening situations. At the most punctual instructive dimensions youngsters become familiar with the soonest, in this way, upgrading these grade schools will be to extraordinary advantage for their future training.

Conclusion: The Necessity of Raising Minimum Wage for Economic and Social Progress

Through administrative arrangement and government lawmakers’ acknowledgment, the best nation can significantly upgrade each family’s life and opportunity. This social issue is profoundly founded on feeling and rationale. Government officials work for the general population; in this manner, they must give it their best shot to do directly for the general population. The lowest pay permitted by law must come back to its motivation proclaimed in the Roosevelt organization, to give enough salary to a decent living. The cash America is spending for the poor due to the insufficient consideration is sponsoring the disappointment of managers to raising the lowest pay permitted by law.