why minimum wage should be increased essay

Persuasive Essay Sample: The Minimum Wage Must Be Raised

“Trying to just Survive” were the words of a man interviewed about his view on the minimum wage (Lenahan). The minimum wage is a topic that divides those who live working minimum wage jobs and policymakers. The minimum wage has been a topic up for debate for a while as workers find the federal minimum wage of $7.50 simply unlivable anymore. At the same time, prominent political policymakers refuse to give in to the truth behind the workers' plea as they worry about significant business and inflation. Although raising the minimum would increase price inflation, raising the minimum wage is essential, as it would provide a livable wage for low-income workers while stimulating and growing the economy.

Minimum wage workers struggle to make ends meet as they find that making 7.50 an hour is not enough for the cost of living anymore. According to “Should, the Federal Minimum Wage Be Increased?” As decided 13 years ago, the minimum wage is $7.25; in 1968, it was $1.60, when adjusting to inflation, that is equivalent to $11.16. When adjusting for inflation to today’s standard, the minimum wage is “53.9% higher than today’s $7.25 federal minimum wage” (Should the Federal Minimum Wage Be Increased). The 53.9% difference shows that the minimum wage must be revised as workers suffer from making essentially 3.91 an hour less than they would if inflation was adjusted. This dramatically impacts the workers' social mobility as workers are barely floating above the poverty line, without dependents. Factoring in two dependents would mean that “the federal minimum of $7.25 leaves an adult with two children thousands of dollars below the federal poverty threshold” (Raising the Minimum Wage: Good for Workers, Businesses). The sad reality of the minimum wage and families who struggle with a single income on minimum wage is the struggle to make a decent life and fund their children's education and lifestyle. This adds to the growing concerns of starting a family. People struggle with monetary issues, live paycheck to paycheck, and worry about covering their essential bills. The minimum wage is a change that must be made to completely change the lives of everyday workers and increase social mobility in the United States. 

Additionally, increasing the minimum wage would help stimulate the economy while causing more worker productivity and a stable workforce. While initially, it could be a concern that raising the minimum wage would affect the job opportunities as a business would not want to hire employees due to the cost, this has been disproven. According to Raising the Minimum Wage: Good for Workers, Businesses, “Leading economists have found that increases in the minimum wage have no discernible effect on employment.” Thus, proving that raising the minimum wage would not have an adverse effect on unemployment and workers getting laid off. Instead, it would help stimulate the economy more as workers would have to pay more taxes. It would add to the country's overall economic health as the goods and services would grow along with more economic prosperity. The country's overall GDP would increase, causing the country's standard of living to rise (Minimum Wage: Good for Workers, Businesses). In addition, the raising of the country’s GDP would help businesses reduce their training cost as it would help employee turnover. Raising the minimum wage would allow companies to " increase productivity and customer satisfaction” (Should the Federal Minimum Wage Be Increased? 15 Pros and Cons). The increase in productivity and customer satisfaction would allow businesses to produce and sell more products, leading to a more stable income. 

It could be argued that raising the minimum wage would cause inflation because it would inflate the market, and prices would go up, which is true. However, the minimum wage has failed low-income workers. The minimum wage has not been raised since 2009. It has been 13 years since the federal minimum wage has been raised. Contrary to the minimum wage, “Since2009, inflation has increased by 11%” (Lenahan). As inflation has increased, minimum wage workers have still had to deal with the same 7.25 federal wage, meaning having to sacrifice time with their family and loved ones to afford to live. 

The time to act is now. The minimum wage should no longer stay stagnant while families suffer and income inequality is at an all-time high. Inflation is at its peak currently, and workers will no longer stand the abuse of their time and effort for a wage that is no longer livable. The minimum wage increase would not only help reduce poverty for workers, but it would allow the economy to grow and flourish.

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Fact Sheet | Wages, Incomes, and Wealth

Why the U.S. needs a $15 minimum wage : How the Raise the Wage Act would benefit U.S. workers and their families

Fact Sheet • January 26, 2021

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This fact sheet was updated February 19 with a new section on tipped workers .

The federal minimum hourly wage is just $7.25 and Congress has not increased it since 2009. Low wages hurt all workers and are particularly harmful to Black workers and other workers of color, especially women of color, who make up a disproportionate share of workers who are severely underpaid. This is the result of structural racism and sexism, with an economic system rooted in chattel slavery in which workers of color—and especially women of color—have been and continue to be shunted into the most underpaid jobs. 1

This fact sheet was produced in collaboration with the National Employment Law Project .

The Raise the Wage Act of 2021 would gradually raise the federal minimum wage to $15 an hour by 2025 and narrow racial and gender pay gaps. Here is what the Act would do:

• Raise the federal minimum wage to $9.50 this year and increase it in steps until it reaches $15 an hour in 2025. 2
• After 2025, adjust the minimum wage each year to keep pace with growth in the median wage, a measure of wages for typical workers.
• Phase out the egregious subminimum wage for tipped workers, which has been frozen at a meager $2.13 since 1991. 3
• Sunset unacceptable subminimum wages for workers with disabilities employed in sheltered workshops and for workers under age 20.

The benefits of gradually phasing in a $15 minimum wage by 2025 would be far-reaching, lifting pay for tens of millions of workers and helping reverse decades of growing pay inequality.

The Raise the Wage Act would have the following benefits: 4

• Gradually raising the federal minimum wage to $15 by 2025 would lift pay for 32 million workers—21% of the U.S. workforce .
• Affected workers who work year round would earn an extra $3,300 a year —enough to make a tremendous difference in the life of a cashier, home health aide, or fast-food worker who today struggles to get by on less than $25,000 a year.
• A majority (59%) of workers whose total family income is below the poverty line would receive a pay increase if the minimum wage were raised to $15 by 2025.
• A $15 minimum wage would begin to reverse decades of growing pay inequality between the most underpaid workers and workers receiving close to the median wage, particularly along gender and racial lines. For example, minimum wage increases in the late 1960s explained 20% of the decrease in the Black–white earnings gap in the years that followed, whereas failures to adequately increase the minimum wage after 1979 account for almost half of the increase in inequality between women at the middle and bottom of the wage distribution. 5
• A $15 minimum wage by 2025 would generate $107 billion in higher wages for workers and would also benefit communities across the country. Because underpaid workers spend much of their extra earnings, this injection of wages will help stimulate the economy and spur greater business activity and job growth .

Raising the minimum wage to $15 will be particularly significant for workers of color and would help narrow the racial pay gap.

• Nearly one-third (31%) of African Americans and one-quarter (26%) of Latinos would get a raise if the federal minimum wage were increased to $15. 6
• Almost one in four (23%) of those who would benefit is a Black or Latina woman.
• African Americans and Latinos are paid 10%–15% less than white workers with the same characteristics, so The Raise the Wage Act will deliver the largest benefits to Black and Latino workers: about $3,500 annually for a year-round worker. 7
• Minimum wage increases in the 1960s Civil Rights Era significantly reduced Black–white earnings inequality and are responsible for more than 20% of the overall reduction in later years. 8

The majority of workers who would benefit are adult women—many of whom have attended college and many of whom have children.

• More than half (51%) of workers who would benefit are adults between the ages of 25 and 54; only one in 10 is a teenager.
• Nearly six in 10 (59%) are women.
• More than half (54%) work full time.
• More than four in 10 (43%) have some college experience.
• More than a quarter (28%) have children.

The Raise the Wage Act follows the lead of the growing number of states and cities that have adopted significant minimum wage increases in recent years, thanks to the ‘Fight for $15 and a union’ movement led by Black workers and workers of color.

• Since the Fight for $15 was launched by striking fast-food workers in 2012, 9 states representing approximately 40% of the U.S. workforce —California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, Virginia, and the District of Columbia— have approved raising their minimum wages to $15 an hour . 10
• Additional states—including Washington, Oregon, Colorado, Arizona, New Mexico, Vermont, Missouri, Michigan, and Maine—have approved minimum wages ranging from $12 to $14.75 an hour . 11

Not just on the coasts, but all across the country, workers need at least $15 an hour today .

• Today, in all areas across the United States, a single adult without children needs at least $31,200—what a full-time worker making $15 an hour earns annually—to achieve a modest but adequate standard of living. 12 By 2025, workers in these areas and those with children will need even more, according to projections based on the Economic Policy Institute’s Family Budget Calculator . 13
• For example, in rural Missouri, a single adult without children will need $39,800 (more than $19 per hour for a full-time worker) by 2025 to cover typical rent, food, transportation, and other basic living costs.
• In larger metro areas of the South and Southwest—where the majority of the Southern population live—a single adult without children will also need more than $15 an hour by 2025 to get by: $20.03 in Fort Worth, $21.12 in Phoenix, and $20.95 in Miami.
• In more expensive regions of the country, a single adult without children will need far more than $15 an hour by 2025 to cover the basics: $28.70 in New York City, $24.06 in Los Angeles, and $23.94 in Washington, D.C.

Workers in many essential and front-line jobs struggle to get by on less than $15 an hour today and would benefit from a $15 minimum wage.

• Essential and front-line workers make up a majority (60%) of those who would benefit from a $15 minimum wage. 14 The median pay is well under $15 an hour for many essential and front-line jobs; examples include substitute teachers ($13.84), nursing assistants ($14.26), and home health aides ($12.15). 15
• More than one-third (35%) of those working in residential or nursing care facilities would see their pay increase , in addition to home health aides and other health care support workers.
• One in three retail-sector workers (36%) would get a raise, including 42% of workers in grocery stores.
• More than four in 10 (43% of) janitors, housekeepers, and other cleaning workers would benefit.
• Nearly two-thirds (64%) of servers, cooks, and other food preparation workers would see their earnings rise by $5,800 on a year-round basis.
• Ten million workers in health care, education, construction, and manufacturing would see a raise —representing nearly one-third (31%) of the workers who would see a raise.

Phasing out the egregiously low $2.13 minimum wage for tipped workers would lift pay, provide stable paychecks, and reduce poverty for millions of tipped workers.

• There are 1.3 million tipped workers throughout the country who are paid as little as $2.13 per hour because Congress has not lifted the federal tipped wage in 30 years. Another 1.8 million tipped workers receive wages above $2.13, but still less than their state’s regular minimum wage. 16
• Seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have already eliminated their lower tipped minimum wage . In these “one-fair-wage” states, tipped workers in these states are paid the same minimum wage as everyone else before tips. 17 For restaurant servers and bartenders, take-home pay in one-fair-wage states is 21% higher, on average, than in $2.13 states.
• Having a lower minimum wage for tipped jobs results in dramatically higher poverty rates for tipped workers. In states that use the federal $2.13 tipped minimum wage, the poverty rate among servers and bartenders is 13.3%—5.6 percentage points higher than the 7.7% poverty rate among servers and bartenders in one-fair-wage states. 18
• Eliminating the lower tipped minimum wage has not harmed growth in the restaurant industry or tipped jobs. From 2011 to 2019, one-fair-wage states had stronger restaurant growth than states that had a lower tipped minimum wage—both in the number of full-service restaurants (17.5% versus 11.1%) and in full-service restaurant employment (23.8% versus 18.7%). 19

Growing numbers of business owners and organizations have backed a $15 minimum wage.

• In states that have already approved $15 minimum wages, business organizations representing thousands of small businesses have endorsed a $15 minimum wage.
• Business groups that have endorsed a $15 minimum wage include Business for a Fair Minimum Wage, 20 the American Sustainable Business Council, 21 the Patriotic Millionaires, 22 the Greater New York Chamber of Commerce, 23 the Long Island African American Chamber of Commerce, 24 and others.
• Growing numbers of employers have responded to pressure from workers and raised their starting pay scales to $15 or higher. These include retail giants Amazon, 25 Whole Foods 26 (owned by Amazon), Target, 27 Walmart, 28 Wayfair, 29 Costco, 30 Hobby Lobby, 31 and Best Buy; 32 employers in the food service and producing industries, such as Chobani, 33 Starbucks, 34 Sanderson Farms (Mississippi), 35 and the Atlanta-area locations of Lidl grocery stores; 36 health care employers including Michigan’s Henry Ford Health System 37 and Trinity Health System, 38 Ohio’s Akron Children’s Hospital 39 and Cincinnati Children’s Hospital Medical Center, 40 Iowa’s Mercy Medical Center and MercyCare Community Physicians, 41 Missouri’s North Kansas City Hospital and Meritas Health, 42 and Maryland’s LifeBridge Health; 43 insurers and banks such as Amalgamated Bank, 44 Allstate, 45 Wells Fargo, 46 and Franklin Savings Bank in New Hampshire 47 ; and tech and communications leaders such as Facebook 48 and Charter Communications. 49

Our economy can more than afford a $15 minimum wage.

• Workers earning the current federal minimum wage are paid less per hour in real dollars than their counterparts were paid 50 years ago . 50
• Businesses can afford to pay the most underpaid worker in the U.S. today substantially more than what her counterpart was paid half a century ago. 51
• The economy has grown dramatically over the past 50 years, and workers are producing more from each hour of work, with productivity nearly doubling since the late 1960s . If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be over $20 an hour today . 52

Research confirms what workers know: Raising wages benefits us all.

• High-quality academic scholarship confirms that modest increases in the minimum wage have not led to detectable job losses . 53
• After the federal minimum wage was raised to its highest historical peak in 1968, wages grew and racial earnings gaps closed without constricting employment opportunities for underpaid workers overall. 54
• Comprehensive research on 138 state-level minimum wage increases shows that all underpaid workers benefit from minimum wage increases, not just teenagers or restaurant workers. 55
• Multiple studies conclude that total annual incomes of families at the bottom of the income distribution rise significantly after a minimum wage increase. 56 Workers in low-wage jobs and their families benefit the most from these income increases, reducing poverty and income inequality.
• By providing families with higher incomes, minimum wage increases have improved infant health and also reduced child abuse and teenage pregnancy . 57

An immediate increase in the minimum wage is necessary for the health of our economy.

• Raising the minimum wage now will tilt the playing field back toward workers who have dangerous jobs and little bargaining power during the pandemic. 58
• Providing underpaid workers with more money will directly counter the consumer demand shortfall during this recession. 59
• Even the Congressional Budget Office’s 2019 study of the impact of raising the federal minimum wage to $15 by 2025 clearly showed that the policy would raise incomes of underpaid workers overall and significantly reduce the number of families in poverty. 60

Low wages threaten the economic security of workers and their families, who then turn to social benefits programs to make ends meet.

• In states without laws to raise the minimum wage to $15, nearly half (47%, or 10.5 million) of families of workers who would benefit from the Act rely on public supports programs in part because they do not earn enough at work. 61
• These workers and their families account for nearly one-third of total enrollment in one or more public supports programs. 62
• In states without a $15 minimum wage law, public supports programs for underpaid workers and their families make up 42% of total spending on Medicaid and CHIP (the Children’s Health Insurance Program), cash assistance (Temporary Assistance for Needy Families, or TANF), food stamps (Supplemental Nutrition Assistance Program, or SNAP), and the earned income tax credit (EITC), and cost federal and state taxpayers more than $107 billion a year . 63

Notes and Sources

This fact sheet is an update of Why America Needs a $15 Minimum Wage , published by EPI and the National Employment Law Project, February 2019.

Unless otherwise indicated, the figures presented in this fact sheet come from a forthcoming EPI analysis of the 2021 Raise the Wage Act .

1. Kate Bahn and Carmen Sanchez Cumming, “ Four Graphs on U.S. Occupational Segregation by Race, Ethnicity, and Gender ,” Washington Center for Equitable Growth, July 1, 2020.

2. The analysis is based on the 2021 Raise the Wage Act.

3. Sylvia Allegretto and David Cooper, Twenty-Three Years and Still Waiting for Change: Why It’s Time to Give Tipped Workers the Regular Minimum Wage , Economic Policy Institute, July 2014.

4. Estimated effects of the 2021 Raise the Wage Act throughout this fact sheet are from a forthcoming Economic Policy Institute analysis of the legislation and include benefits for both directly affected workers (those who would otherwise earn less than $15 per hour in 2025) and indirectly affected workers (those who would earn just slightly above $15 in 2025).

5. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021); David Autor, Alan Manning, and Christopher L. Smith, “ The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment ,” American Economic Journal: Applied Economics 8, no. 1 (January 2016).

6. See also Laura Huizar and Tsedeye Gebreselassie, What a $15 Minimum Wage Means for Women and Workers of Color , National Employment Law Project, December 2016.

7. For racial/ethnic wage gaps, see Appendix Table 1 of Elise Gould, State of Working America Wages 2019 , Economic Policy Institute, February 2020.

8. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021).

9. Alina Selyukh, “ ‘Gives Me Hope’: How Low-Paid Workers Rose up Against Stagnant Wages ,” National Public Radio’s All Things Considered , February 26, 2020; Kimberly Freeman Brown and Marc Bayard, “ Editorial: The New Face of Labor, Civil Rights is Black & Female ,” NBC News, September 7, 2015; Amy B. Dean, “ Is the Fight for $15 the Next Civil Rights Movement? ” Al Jazeera America , June 22, 2015.

10. Economic Policy Institute calculation using Current Employment Statistics data from the Bureau of Labor Statistics. Values calculated using the listed states’ share of total U.S. nonfarm employment in calendar year 2019 (prior to the COVID-19 pandemic). For recent minimum wage changes, see the Economic Policy Institute Minimum Wage Tracker, https://www.epi.org/minimum-wage-tracker/ . We include the District of Columbia in this list even though it is not a state.

11. Yannet Lathrop, Impact of the Fight for $15: $68 Billion in Raises, 22 Million Workers , National Employment Law Project, November 2018.

12. Based on calculations from the Economic Policy Institute’s Family Budget Calculator , which measures the income a family needs to attain a secure yet modest standard of living in all counties and metro areas across the country.

13. Congressional Budget Office projections for the consumer price index were applied to the Economic Policy Institute’s Family Budget Calculator .

14. Economic Policy Institute analysis of the legislation, forthcoming.

15. Bureau of Labor Statistics, Occupational Employment Statistics, May 2019 National Occupational Employment and Wage Estimates United States (online database).

16. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

17. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

18. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

19.  Quarterly Census of Employment and Wages, 2011–2019.

20. Business for a Fair Minimum Wage, “ Federal Business for a Fair Minimum Wage—$15: Signatories List in Formation ,” accessed January 22, 2021.

21. Business for a Fair Minimum Wage, “ Federal Business for a Fair Minimum Wage—$15: Signatories List in Formation ,” accessed January 22, 2021.

22. Patriotic Millionaires, “ Endorsed Bill: The Raise the Wage Act ,” accessed January 22, 2021.

23. Greater New York Chamber of Commerce, “ Celebrating Juneteenth ,” June 18, 2020.

24. Kate King, “ New York Boosts Minimum Wage and Some Businesses Balk ,” Wall Street Journal , January 4, 2021.

25. Arjun Panchadar, “ Amazon Raises Minimum Wage to $15, Urges Rivals to Follow ,” Reuters , October 2, 2018.

26. Abha Bhattarai, “ Amazon Boosts Minimum Wage to $15 for All Workers Following Criticism ,” Washington Post , October 2, 2018.

27. Melissa Repko, “ Target Raises Minimum Wage to $15 an Hour Months Before its Deadline ,” CNBC , June 17, 2020.

28. Michael Grothaus, “ Walmart Is Giving 165,000 Employees a Pay Raise Between $15 and $30 per Hour ,” Fast Company , September 18, 2020.

29. Lucia Maffei, “ Wayfair Sets $15 Minimum Wage for All U.S. Workers ,” MassLive , January 8, 2021.

30. Sarah Nassauer and Micah Maidenberg, “ Costco Raises Minimum Wage to $15 an Hour ,” Wall Street Journal , March 6, 2019.

31. Hobby Lobby, “ Hobby Lobby Raises Minimum Wage ” (press release), September 14, 2020.

32. Gillian Friedman, “ Best Buy to Join Retailers Paying a $15 Minimum Wage ,” New York Times , July 22, 2020.

33. Chobani, “ Chobani Increases Employees’ Starting Wage to at Least $15/Hour ,” (PR Newswire release), Vending Marketwatch , October 30, 2020.

34. Janine Puhak, “ Starbucks to Raise Minimum Wage to $15 for US Employees over Next Three Years ,” WDRB.com , December 12, 2020.

35. Sanderson Farms, “ Sanderson Farms Increases Pay Rates for Hourly Employees ” (press release), June 3, 2019.

36. Kara McIntyre, “ Lidl to Raise Atlanta-Area Starting Pay to $15 An Hour ,” Patch (Atlanta, Ga.), January 5, 2021.

37. Henry Ford Health System, “ Henry Ford Among the First Michigan Health Systems to Raise Minimum Pay Rate to $15 Per Hour ” (press release), October 9, 2020.

38. Michael Kransz, “ Michigan Health System with 8 Hospitals Increases Minimum Wage to $15 an Hour ,” MLive.com , October 19, 2020.

39. Betty Lin-Fisher, “ Akron Children’s Hospital to Raise Its Minimum Wage to $15 ,” Akron Beacon Journal , October 3, 2019.

40. Kelly Gooch, “ Ohio Children’s Hospital to Boost Minimum Pay for 3,000 Employees ,” Becker’s Hospital Review , October 3, 2019.

41. Michaela Ramm, “ Mercy Announces Minimum Wage Increase, General Pay ,” The Gazette , December 22, 2020.

42. North Kansas City Hospital, “ North Kansas City Hospital and Meritas Health Raise Minimum Base Wage ,” December 21, 2020.

43. LifeBridge Health, “ Lifebridge Health Raises Minimum Living Wage for Hospital Team Members to $15 an Hour ” (press release), Greater Baltimore Committee, January 8, 2021.

44. Amalgamated Bank, “ Fight for $15 ” (web page), accessed January 22, 2021.

45. Amanda Mull, “ Corporations’ Social Crusades Often Leave Out Workers ,” The Atlantic , June 28, 2019.

46. Wells Fargo, “ Wells Fargo to Raise Minimum Hourly Pay Levels in a Majority of Its U.S. Markets ” (news release), March 4, 2020.

47. Scott Souza, “ Franklin Savings Bank Raises Minimum Wage in NH To $15 ,” Patch (Merrimack, N.H.), October 31, 2019.

48. Tomi Kilgore, “ Facebook Raising Minimum Wage to $20 Per Hour for Bay Area, New York and D.C. ” MarketWatch , May 13, 2019.

49. Charter Communications, “ Charter Statement Regarding Plans to Permanently Raise Minimum Wage to $20/Per Hour over Next Two Years for All Hourly Employees ,” April 6, 2020.

50. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

51. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

52. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

53. Paul J. Wolfson and Dale Belman, “ 15 Years of Research on U.S. Employment and the Minimum Wage ,” Tuck School of Business Working Paper no. 2705499, 2016.

54. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021).

55. Doruk Cengiz, Arindrajit Dube, Attila Lindner, and Ben Zipperer, “The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator,” Quarterly Journal of Economics 134, no. 9 (May 2019).

56. Arindrajit Dube, “ Minimum Wages and the Distribution of Family Incomes ,” American Economic Journal: Applied Economics 11, no. 4 (October 2019); Kevin Rinz and John Voorheis, “ The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data .” U.S. Census Bureau Center for Administrative Records Research and Applications Working Paper 2018-02, 2018.

57. George L. Wehby, Dhaval M. Dave, and Robert Kaestner, “Effects of the Minimum Wage on Infant Health,” Journal of Policy Analysis and Management 39, no. 2 (Spring 2020); Kerri M. Raissian and Lindsey Rose Bullinger, “Money Matters: Does the Minimum Wage Affect Child Maltreatment Rates?” Children and Youth Services Review 72 (January 2017); Lindsey Rose Bullinger, “The Effect of Minimum Wages on Adolescent Fertility: A Nationwide Analysis,” American Journal of Public Health , March 2017.

58. Peter Dorman and Lawrence Mishel, “ A Majority of Workers Are Fearful of Coronavirus Infections at Work, especially Black, Hispanic, and Low- and Middle-income Workers ,” Working Economics Blog (Economic Policy Institute), June 16, 2020.

59. Cristian Alonso, “ Beyond Labor Market Outcomes: The Impact of the Minimum Wage on Nondurable Consumption ,” Journal of Human Resources , forthcoming.

60. Ben Zipperer, “ Low-Wage Workers Will See Huge Gains from Minimum Wage Hike, CBO Finds ,” Working Economics Blog (Economic Policy Institute), July 9, 2019.

61. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

62. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

63. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

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Research: When a Higher Minimum Wage Leads to Lower Compensation

• Qiuping Yu,
• Shawn Mankad,
• Masha Shunko

A recent study found that one retailer slashed hours, scrambled schedules, and cut benefits after a minimum wage hike.

While proponents of increasing the minimum wage have grown increasingly vocal in the U.S., new research suggests that raising the minimum wage can actually have a significant negative impact on the total compensation of hourly workers. Researchers analyzed a detailed dataset of wage and scheduling data for more than 5,000 employees at a single national retailer, and compared outcomes for workers in California (which had several minimum wage increases during the study period) and Texas (which had zero increases). They found that in the stores that experienced a minimum wage hike, workers on average worked fewer hours per week, were less likely to qualify for benefits, and had less-consistent schedules. These factors corresponded to an average 11.6% decrease in total compensation for every $1 increase in the minimum wage. Based on these findings, the authors argue that policymakers should consider minimum wage hikes with caution, and should be sure to complement them with policies designed to ensure consistent schedules and adequate hours for workers — or risk harming the very people they’re aiming to support.

In the U.S., we’re seeing an increasing number of calls to increase the national minimum wage to $15/hour . Many states and municipalities have already passed minimum wage hikes in the last several years, and a variety of proposals are under consideration at the federal level .

• QY Qiuping Yu is an assistant professor of Operations Management and Business Analytics at the Georgia Tech Scheller College of Business. Her research focuses on digital service design, workforce analytics, and socially sustainable operations. She uses and develops a broad range of methods in causal inference and machine learning. See her faculty bio  here . Follow her on Twitter: @QiupingYu.
• SM Shawn Mankad is an assistant professor of Operations, Technology, and Information Management at Cornell’s SC Johnson College of Business. His research focus is on developing and applying statistical methods for addressing business, economic, and policy issues. See his faculty bio here .
• MS Masha Shunko is an expert in supply chain management, service operations and behavioral aspects of operational efficiency. A native of Estonia, Professor Shunko received her PhD in Operations Management from Carnegie Mellon University, and before joining the Foster School in 2015, she taught at Purdue University. She has also consulted for Microsoft, Caterpillar, JD Power, and several medical organizations, including Mayo Clinic. See her faculty bio here .

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The future is equal

Politics of Poverty

6 simple reasons we should raise the minimum wage right now.

The federal minimum wage—just $7.25 an hour—hasn’t been increased in more than a decade.

It’s time to raise the minimum wage. Today, millions of Americans do arduous work in jobs that pay too little and offer too few benefits. They serve food, clean offices, care for the young and elderly, stock shelves, and deliver pizza. They work these jobs year after year while caring for children and parents, trying to save for college, and paying their bills.

But despite their best efforts, these low-wage and essential workers are falling further and further behind. The federal minimum wage of $7.25/hr is locking millions—most notably women of color and single parents—in poverty.

The way we see it, if you work hard, you should earn enough to get by. That’s why efforts to raise the federal minimum wage to $15 to help Americans across the country are so important.

Here are six simple reasons why raising the minimum wage makes sense.

1. it is long overdue.

Since it was last raised in 2009, the minimum wage has failed to keep up with inflation, failed to keep up with average wages, and—most dramatically—failed to keep up with incomes of the top 1 percent and CEOs, contributing to America’s growing inequality crisis.

As a result, low-wage workers are not benefiting from economic growth and productivity. If the minimum wage had kept pace with productivity increases, it would be around $24/hr according to the Center for Economic and Policy Research. Just 30 years ago, the average pay gap between CEOs and workers was 59 to 1; by 2018, it had soared to 361 to 1 . The average CEO at one of the top 350 firms in the US made $21.3 million in 2019 , 320 times as much as the typical worker; a minimum wage worker still makes $15,080: a gap of 1,400 to 1.

2. It would address longstanding racial and gender inequities

Historically marginalized people, who do more than their fair share of low-wage work, would stand to benefit disproportionately from the bump. (For dramatic illustration of the disparate impact of a raise, refer to Oxfam’s map of low-wage workers in the US.)

According to the data from the Economic Policy Institute, while 27 percent of the total US workforce would benefit from the raise:

• 39 percent of Black and Latina women would benefit (vs. 18 percent of white men);
• 38 percent of African American workers would benefit;
• 33 percent of Latino workers would benefit; and
• 32 percent of women workers would benefit (vs 22 percent of men).

3. It would reduce poverty

The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce— 40 million workers —would see a raise in wages.

The pandemic has made this move even more urgent, as millions have slipped into poverty over the past year, and 11 percent of adults are now facing food insecurity.

4. It would fuel economic growth

The roughly $120 billion extra paid to workers would be pumped back into the economy for necessities such as rent, food, and clothes. Economists have long recognized that boosting purchasing power by putting money in people’s pockets for consumer spending has positive ripple effects on the entire economy.

In one recent poll, 67 percent of small business owners support the minimum wage increase to $15 an hour. They say it would spark consumer demand, which would enable them to retain or hire new employees.

And raising the wage doesn’t seem to compel employers to cut jobs. As states and cities across the country have raised wages, research has found no statistically significant effect on employment .

5. It would save taxpayer money and reduce use of government programs

When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations.  

In 2016, the Economic Policy Institute found that , among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-wage workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”

6. It’s what the vast majority of Americans want

Vast majorities (up to three quarters, including a majority across party lines) support raising the wage. In fact, over half the states have raised their minimum wages to restore basic fairness to the workforce.

All work has dignity and worth. We need to get our economy moving, prioritizing workers and families most impacted by the pandemic, specifically women and people of color. After more than a decade of hard work, low-wage workers deserve a bump to get them and their families out of poverty.

Find out how many people in your state would benefit from raising the minimum wage.

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To Fight Poverty, Raise the Minimum Wage? Or Abolish It?

The minimum wage has stagnated at $7.25 an hour for more than a decade. is increasing it to $15 the best way to fight poverty.

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Today on The Argument, what’s the downside to paying people more? [MUSIC PLAYING] Among the most popular and blunt tools to fight poverty is a minimum wage, but it doesn’t actually do that. Because if you have a full-time job that pays the federal minimum wage of $7.25, you’re only making about $15,000 a year, not enough to rent a one-bedroom apartment in 95% of counties in the United States. Raising the federal minimum to $15 an hour is something progressives have been fighting for for years. They came close this month, but an amendment to raise the minimum wage was ultimately removed from Biden’s COVID relief bill. Is raising the minimum wage or having one at all the right way to battle poverty? I’m Jane Coaston, and I think it’s past time to raise the minimum wage. It’s not a way station for 16-year-olds. For millions of Americans, including parents with small children, it’s how they make ends meet. More people across the political spectrum are beginning to support a higher minimum wage, but it does have opposition. So I’ve invited two guests who are on different sides of the debate. Saru Jayaraman is the president of One Fair Wage and director of the Food Labor Research Center at the University of California Berkeley. Jeff Miron is the head of undergraduate and graduate economic studies at Harvard and head of economics at the Cato Institute. [MUSIC PLAYING]

Hi, Saru. Thanks so much for joining.

Thank you so much for having me.

And hey, Jeff, thanks so much for being here.

My pleasure. Thank you.

Here’s what I want to get out of this conversation. I want to have this conversation in two pieces. First, I want to talk specifically about the $15 minimum wage, hear both of your positions, and then get into what the arguments for and against a wage hike are. And then I want to zoom out and talk about raising the minimum wage as part of an overall suite of policies aimed at lifting people out of poverty. We’re going to go over some other options and talk about what’s actually being considered and what’s actually possible. So Saru, what’s your position on the $15 minimum wage?

So I think it’s important to understand the full scope of what’s being proposed. The Raise the Wage Act not only would raise the minimum wage to $15 an hour over several years, but it would also eliminate the sub-minimum wage for tipped workers, which is literally a legacy of slavery, the sub-minimum wage for workers with disabilities, which is a direct reflection of the valuation of people with disabilities, and youth. The current federal minimum wage is $7.25 for all workers and $2.13 an hour for tipped workers, and it is cents — literally less than $1 — for workers with disabilities. Our position is, of course, that that is not just low, it actually creates severe poverty, economic instability. It has created just horrific suffering during the pandemic. With — in the case of the sub-minimum wage for tipped workers, it’s also been a source of horrific sexual harassment because you have a largely female workforce living off of tips as a portion of their base wage, and that $15 is actually the minimum that’s necessary to live, particularly given that this workforce of minimum wage workers are adults. Median age is in the 30s. They have children, and they are struggling to survive, often working multiple jobs on these poverty wages. So we strongly support phasing in the raise of the minimum wage over time.

Jeff, where do you stand on this issue?

So I’m opposed to raising the minimum wage to $15 an hour. I’m, in fact, opposed to government mandating any minimum wage at all.

You wrote in 2014 that the right minimum wage is not $10.10 or $7.25. It’s zero. Why?

For a bunch of reasons. First of all, the minimum wage is trying, mainly, to tackle an issue of people having low income. But it does not address, the people with the lowest income, namely, people who don’t have jobs in the first place. It’s raising the wage of people who are already employed who may have low or very low income, but they’re not the poorest members of society. In my view, government anti-poverty efforts should be focused exactly on the people who are the worst off. Minimum wage is very poorly targeted for doing that because it starts off by only affecting people who are employed who have jobs. Secondly, it’s going to, in some instances, have a very perverse effect if you’re trying to raise the wages, even if we accept that it’s focused on a group of people that have jobs. It’s going to cause employers to lay off some people or hire fewer people or work more unpleasant hours or cut other benefits or do various things that are going to make those jobs bad for some of the people that you’re trying to help, OK? In the case where it causes employers to hire fewer people, some people go from having a low wage to having a zero wage. That seems a very crude way of trying to alleviate poverty, even if the minimum wage has only a modest effect in reducing employment. There’s a huge, long controversy in economics about that. The bulk of the evidence does suggest there is a negative effect on employment, especially if you were to double the minimum wage, as is being proposed currently. But it may have other negative effects, such as raising the prices of the goods and services that these employers provide. That also is a regressive step, not a progressive step.

I’m just going to cut you off there because I really want to put this to Saru. Last month, the Congressional Budget Office put out a report on the impact of a $15 minimum wage, and it showed that a gradual increase to a $15 minimum wage could add $54 billion to the deficit, if you’re worried about that kind of thing. I know deficit spending — we don’t talk about that anymore. It’s not a thing. I don’t even know who she is. But it could also eliminate 1.4 million jobs because, as Jeff said, that could be added prices for food. That could be added prices in a lot of spaces that low-income people and all-income people might need. What’s your response to that?

You know, the press reported on that Congressional Budget Office report in a way that, I think, caused most people not to actually read the report. The actual CBO report, what it said is that we don’t know what the impact on jobs could be. The impact on jobs could actually be anywhere from 0 to close to 3 million jobs. We have no idea. And that 1.4 million number was an intermediate between zero and close to three. In fact, we looked at the seven states that require what we call one fair wage, a full minimum wage with tips on top, including California, which has passed a $15 minimum wage and full elimination of the sub-minimum wage for tipped workers. Those seven states — and by the way, they’re not all blue states. If you look at those states that have raised the minimum wage, those seven states, in particular for the restaurant industry — we looked at from 2011 to 2016 — we saw that those states actually had higher job growth rates in the restaurant industry. They all actually have the same or higher growth rates in the restaurant industry, in terms of jobs, as the rest of the country. And so it just hasn’t borne out in the seven states that got rid of the sub-minimum wage for tipped workers. It just hasn’t borne out in the evidence. In fact, the states with the highest wages have had the highest job growth rates in the restaurant industry. So what do they do when they get a minimum wage increase? They spend it, the economy is boosted, and more jobs are created. I also want to speak to the menu price issue because we’ve also studied this a lot. Actually, we’ve compared restaurants — the same restaurants, chains — in California compared to all other states, and the menu prices are exactly the same. These are publicly-traded companies. They wouldn’t undercut themselves. They wouldn’t grow in a state like California if they weren’t profitable.

Jeff, what do you think? Because I think that issue of, if you pay people more money, they have more money, they spend more money, that makes sense to me.

My best answer is that money came from some place. But let me also take a step further back, which is if you tell employers they have to pay a higher wage for some of their employees, what are the things that could happen? They could say, OK, that’s fine. I’ll just make less profits, OK? Or they could say, I’m going to reduce that kind of employment and substitute with higher-skilled people. I could substitute machinery for some of the less-skilled labor that I was paying this lower minimum wage at. They could raise their prices. It’s unlikely that they’re just going to do nothing and absorb that profit loss. They’re going to respond in some way, shape, or form, and all of those things make those markets less efficient, OK? It means that you’re distorting the decisions about whether to use, in producing a particular good or service, low-skilled labor or to substitute with a machine. Somebody is paying for it. It’s either reduced profits — OK, but then the business owners are going to respond in ways which try to recoup that, many of which are going to make those workers worse off, or at least undo some of the benefit they got from the higher wages, such as by adjusting their hours in ways that workers don’t like, cutting benefits, and all those sorts of things. So we can’t just give people more money without saying where we’re taking it from and then what the cost of that is and what the effects of that are going to be.

I’m thinking about not necessarily minimum wage jobs, but we’ve all heard of or even had jobs where in exchange for getting paid more, there is an expectation that, like, yes, you make more money, but you’re supposed to work far more hours. The expectations change. If that’s true for jobs I’ve had, this sounds like it would also be true for minimum wage positions. Wouldn’t, as Jeff said, companies just find another way to exploit workers? If they’re paying them more, they could hire fewer people or force them to do different and worse labor.

Now, I would totally agree with Jeff that, yes, this does come from somewhere. This is why I fundamentally cannot agree with the idea that there can’t be a minimum wage. Because employers, corporations, businesses need to pay their fair share of the cost and the value of the labor that they’re profiting from. That is a concept that we, as a country, decided on when we ended slavery in the United States of America. We decided, as a country, morally, that we believe employers should pay for the value of the labor that they are profiting from. Now, in the restaurant industry in particular, at emancipation, the restaurant lobby did not want to pay for the value of their labor, and so they mutated tipping from being an extra or bonus on top of the wage to becoming a replacement for wages, which by the way, before emancipation, waiters were paid a full wage. So the whole idea of employers paying for their labor is something that we, as a nation, have accepted. Now, what happens when the minimum wage goes up in the restaurant industry in California or in the states that have raised wages? They don’t necessarily just reduce jobs. That hasn’t been borne out in the data. They do actually figure out, to your point, Jeff, greater efficiencies. They figure out that when you pay people more, actually, they don’t leave you. They stay. We did a study with Cornell where we interviewed 1,100 restaurant managers, and they told us that when you raise wages, you cut the cost of employee turnover because, guess what? When you pay people more, they don’t have to keep moving and looking for different jobs. They stay with you. That’s less turnover, which costs in terms of the cost of recruitment and hiring and morale and training new people. So it actually pays off to pay people well, and that is part of the overall cost of doing business.

OK, I have to object really strongly to the notion that imposing this minimum wage is going to make businesses more efficient by reducing turnover or encouraging them to substitute capital in an efficient way. If those things were efficient, if they were profitable, the employers would have done them already. If you can reduce turnover by paying a little bit higher wage, then of course, employers will do that. And many employers do do that, precisely for the reasons you explained, but not when they’re forced to do it by the higher minimum wage. Take the example of substituting machinery for a lower-skilled employee. There’s a cost to the machinery. There’s a cost of the employees, of the wages. You make the calculation of which one is more profitable, and you do the one that makes sense. If it made sense to substitute capital, you would have done it already. OK, so I don’t think that argument is the least bit convincing, and it just doesn’t make logical sense that there’s all this profit opportunity that these big public corporations, whose sole objective in life is basically to make profits, that they’re leaving all this money on the table by not paying a wage which would get them to a more profitable outcome.

But isn’t there an argument that part of making more money is the public appearance of being a good corporate citizen? We’ve had a lot of conversations recently about big corporations attempting to position themselves on specific political issues. I’m thinking of Apple getting involved with the Religious Freedom Restoration Act about five or six years ago. Isn’t an element where, yes, there is kind of the brute capitalism, we need to make as much money as possible, but also, it can be a good business maneuver to advertise yourself as having a good corporate culture by having higher wages?

But then again, you don’t need the government to make businesses do it. If it’s good for business to do something which looks socially responsible, whether it has to do with global warming or the wages you pay or the benefits you pay, then businesses will do it on their own because the way you describe it, it’s in the interests of the business. The net effect on profits after taking account of the somewhat higher costs for wages, but having better PR, having more people like your company, et cetera, they’ll take that into account, and they’ll do it on their own.

But I do want to put that question to Saru because I live in DC, where we have a $15 minimum wage. Florida, as you mentioned, has passed one that will go into effect by 2026. New York and Seattle both have a $15 minimum wage. So if you have private businesses that are saying, it’s a good idea for us to look good on this particular front by having a higher minimum wage, if you have cities and states that are making these decisions, why do we need the federal government to set a higher minimum wage for all?

So the truth is that we’re talking about giving people a very basic floor that would allow them to survive, allow them to get off of public assistance, allow them to feed their families when they work full time or more than full time. Look, here’s the problem with the argument Jeff is making of let’s just leave it entirely to the market, let’s have no minimum wage at all. If it were, efficient companies would do it. Well, guess what? There are lots of things companies do that are inefficient, that are based on their biases, their desires, their opinions. Racism and racial discrimination is not actually market efficient. So it is not entirely always efficiency that drives employer choices. And to the point of publicly-traded companies and if it were so great to pay people more, why wouldn’t they do it? I’ll tell you why. It’s because publicly-traded companies look at quarterly returns. And so there are a ton of efficiencies that arise from paying the minimum wage. The problem is that the publicly-traded corporations aren’t able to see it because they are so focused on short-term gains. So the problem with not having a federal minimum wage is that you leave the states with the highest populations of people of color at the lowest wages, and that exacerbates racial inequity in our country.

I want to focus on one thing that Saru said, which is that I’m arguing for leaving everything to the market. I haven’t said this yet, but I want to make clear that the argument against the minimum wage is not an argument against the social safety net. It’s an argument that the minimum wage is a terrible way of trying to have a social safety net. The libertarian view, my view, is that if you want to make poor people less poor, you should give them money via mechanisms like food stamps, housing assistance, universal basic income because those provide people with income without distorting private markets and without having the ancillary negative consequences that the minimum wage has. So they’re separate questions. One question is whether to help people who are not in a good financial position. The other question is how. My position is that the minimum wage is a terrible way in which to do it because it has all these ancillary side effects and because it doesn’t very successfully target the poorest people, whereas a universal basic income does explicitly target the very poorest people.

I do just have to address what Jeff said about leaving it to the market. You’re not saying leave it entirely to the market, but you are saying leave wages to the market, which means —

Yes, I am saying that.

— an employer could pay — meaning an employer could pay zero if they want to.

No, because people wouldn’t work for zero.

Well, people are working for zero right now, Jeff —

If employers have all this power, why don’t they set a zero wage?

Can I finish my point, please?

I apologize.

So actually, there are restaurant owners right now requiring workers to live off of tips. It’s illegal. Workers often don’t complain because they are scared to. They face retaliation. They are very vulnerable. They are women. They are people of color. And during the pandemic, these workers who receive zero dollars an hour could not get a dime of unemployment insurance because they were forced to live off of tips. And here’s the basic problem with having it rely entirely on government programs, social safety nets — some really big problems with that. One, workers want to be able to work and feed their families with their earnings. These workers, as well, want the dignity of being able to work in their profession — and these are professions — and not have to rely on government assistance, which is heavily stigmatized, difficult to access. And they want that dignity of being able to be paid. So you, Jeff, are asking taxpayers to cover these people’s livelihoods. But what I’m saying is that employers have to pay their fair share. They have to cover the value of their labor, of the people who are doing the work that brings them profit. [MUSIC PLAYING]

Hi, Jane. This is Reggie from Brooklyn. And the thing I’ve been arguing about with my friends and employer is whether we should use nuclear power to reach our climate goals. I think nuclear energy is the cleanest, most reliable way to bridge the gap between where we are now and our hopefully zero-carbon future in the time we have left.

What are you arguing about with your family, your friends, your frenemies? Tell me about the big debate you’re having in a voicemail by calling 347-915-4324, and we might play an excerpt of it on a future episode. So Jeff, you’ve said something that really interested me earlier, as a libertarian, is that you talked about the social safety net and the idea that we don’t need to raise the minimum wage. What we do need are better ways to support the poor that aren’t that, so talking about improving welfare programs. But you’ve mentioned two ideas in other work that you’ve done, the negative income tax and expansion of the earned-income tax credit. Now, I think for many people, they may have heard of the earned-income tax credit, but can you explain what the negative income tax would look like?

So a negative income tax, which is, in all important ways, the same as a universal basic income, says that everybody is guaranteed a certain amount of income per quarter or per year, some basis like that. And then they face some tax rate on all income earned. The simplest way to describe it, which doesn’t feel right to many people, is to say we send a check for $5,000 to every single person, including Bill Gates and, you know, Warren Buffett, but we then impose taxes. So if you have no income of your own, you receive that $5,000 per year, and that’s your total net income. If you earn $10,000 and there’s a 30% tax rate, you would get the $5,000 directly from the government plus the $10,000 you’ve earned, minus the $3,000 you would owe in taxes. You never owe any taxes on the universal basic income, on the negative income tax. So the idea is we put a floor on the amount of income that every single person has. And it gradually, as you earn income that didn’t come from the government, you pay taxes on that. But nobody will ever have any income below that floor that the government creates.

So what you’re saying here is that employers who make big profits, whether that’s a Walmart or McDonald’s or even a, like, company that’s doing really well in Washington DC, like a brewery, like the one that is being loud near my apartment, they do not have the responsibility to redistribute money. But the government — the federal government — through this program could redistribute money. They could send out checks for $5,000 to every American. Why do employers not have that responsibility but the government does? That seems — I’m confused.

It’s basically a practical answer that if the government does it in roughly the way I described, it’s consistent. It applies to everyone. It happens sort of year after year after year because it’s a government policy that’s in place and it continues, unless Congress changes its mind. But trying to get private employers to do it ends up mainly enriching private employers or some sectors relative to others. The housing industry gets richer than it would otherwise be because the government is subsidizing the building of housing projects. Certain farmers get richer than they would otherwise be because the government subsidizes food stamps. The transferring income to people approach doesn’t create any special favors for this industry versus that. It doesn’t allow you to go to Washington and lobby them to produce the — more of the goods and services that your industry produces because that’s allegedly helping poor people. It avoids all the inefficiencies created by having a centrally planned — central planner dictate what’s produced and how firms behave. If I could go back to one thing that Saru said, she said several times, we agreed, when we ended slavery, that we owe everyone a fair wage.

I don’t remember — or something like that.

We agreed that employers need to pay for the value of their labor, that they don’t get to —

When did we agree that?

That’s not in the Constitution. That’s not in a federal law.

Because we said —

Who agreed to that?

Because we said that employers should not be able to use free labor. That is what slavery was.

No, they should not be able to coerce free labor.

We agreed, as a country —

Outlawing slavery is not saying that someone can’t offer you a teeny wage and you agree to accept it. It’s saying that you can’t, using physical force, make people work for you for nothing.

And I would argue that because of the forced options that most people in this country on the minimum wage have, they are forced into very low-wage jobs, that their life situations have forced them into low-wage jobs that don’t give them the opportunities. When you’re working two and three jobs, you don’t actually have the time to go to college and get a degree and move up the ladder. So let me just say, one thing you said, Jeffrey, is just plain wrong. The idea that food stamps have not actually created inefficiencies and have not bred an industry or a sector that has profited off of food stamps is just plain wrong. The data shows that, actually, Walmart has profited quite a bit from food stamps. They —

That’s exactly my point.

OK, yeah, so —

I completely agree. That’s what I was saying. I totally agree with it.

Yeah, so Saru, like, the idea would be that you would have something that look kind of like Alaska’s Permanent Fund, which sends everyone in Alaska a check, or a dividend of some sort, which is that if you sent everyone in America a $5,000 check — everyone, every single person — and had that instead of food stamps, which as Jeff said, he argues have massive inefficiencies, you could wipe — use that instead of those programs. I’m interested to see your thoughts on that.

Yeah, my point is that we know, from situations like that, inefficiencies still will occur, even when people are given those checks. Because again, people at the lower end of the income spectrum have to spend those checks to survive on things like rent, which goes to developers, and food, which goes to grocery stores. There still will be inefficiencies. But here’s the bottom line. Employers — by doing that, by just providing everybody with $5,000, you completely remove any responsibility from employers to actually pay for, again, the people that are allowing them to create profit. The people who work for them generate the actual profit. And so employers should have the responsibility, rather than just taxpayers —

So I am saying that the employer should not bear this responsibility. I think it ends up being an incredibly inefficient way to try to accomplish the goal. I completely accept that some people have been forced by the conditions of the market and their luck and misfortunes of whatever their circumstances are to have very few opportunities, and I accept that there are people who have terrible circumstances. But I think the best way to do it is not by trying to make the employers responsible for it but letting their employers be responsible for maximizing efficiency and producing the most. First, that gives you the biggest economic pie available to redistribute to the people who deserve it, and they are not completely absolved because they pay taxes.

Not anymore.

No matter what the structure of the business taxes, they are ultimately paid by people, and the people are paying taxes that supports the transfers to those people who are deemed deserving by society’s judgments.

Saru, I noticed that you laughed a little bit when he talked about big corporations paying taxes. But I want to get at something. We appear to agree that there are, in our current system, a lot of inefficiencies that are bad. And we’re in a situation, and it is a situation, Jeff, as a libertarian, in which you are often in, which is that no one agrees with us and no one listens to us. No Republicans support raising the minimum wage to $15 an hour, so what are some other alternatives that could get us closer to poverty mitigation that could work with what we currently have in Congress, where we’re dealing with Democrats who are saying, we are supportive of raising the minimum wage, but the Republicans who are in Congress are not the people who are interested in thinking about poverty mitigation the same way we’re — you know, they’re not talking about a UBI. They are talking about tax cuts. When you’re thinking about either making the case for raising the minimum wage to Republicans or thinking about other ideas for poverty mitigation, where do you go?

So one thing that, actually, we have been able to agree with on — with some libertarians and Republicans is that we do need to reduce people’s dependence on public assistance, actually. And it is shown that raising the minimum wage reduces people’s dependence on food stamps, on other forms of public assistance. So raising the minimum wage reduces the burden on the taxpayer, on the government by allowing employers to pay their fair share and then reducing people’s dependence on public assistance. That is one area that we have in common with some Republicans.

Let me say a few things. First, I don’t want to leave the impression that libertarians advocate adding a universal basic income on top of the current social safety net. Libertarians think that if we could replace the existing social safety net with the universal income, that is plausibly an improvement. But many libertarians would still have severe qualms about the existing generosity of the current social safety net. They would say there might be — maybe there’s a role for some. It probably shouldn’t be federal. It should be left to states. It should probably be less generous — just so I don’t mislead. But on your question of what other things can be done to help people who are poor, libertarians have a few things that they emphasize quite a bit, which is repeal of regressive regulation. Lots of regulations are especially bad for poor people. This includes land-use regulation, which makes it hard for people to afford housing because you restrict the density of buildings, the heights of buildings, building more in inner cities. That forces people with lower incomes to live farther away, to have longer commutes, to have less access to jobs, to stores, and so on. Similar issues with occupational licensing, has effects of two kinds. One, it keeps relatively poor people from entering certain professions because they have to spend money or spend time getting degrees in order to practice those occupations. At the same time, those licensing restrictions raise the cost of the goods in those occupations of the — being produced by those occupations. And that, of course, has a bigger negative effect on people who are poor. And there are lots of other examples. Childcare regulation is another good one. There’s tons of regulation of childcare. Whom does that harm especially? Poor mothers, OK, who can’t easily afford daycare and be able to hold jobs because of the regulation, which raises costs so much.

Saru, I’m going to guess that you probably don’t think that these ideas should replace the fight for the $15 minimum wage and my efforts to join us all on one side of the argument. Eh, a little quixotic. But what’s your what’s your last point on this particular issue? Because I think that I agree with Jeff, the occupational licensing issue is particularly interesting because of how, in my own personal experience, it hinders African-American business owners. For instance, you can get into a very weird place with the licenses you need to do African hair braiding. But what is it about the $15 minimum wage that makes it your central issue and the central issue for this conversation?

The current debate is how much should the minimum wage be and should it apply equally to everybody in this country. And so therefore, 32 million Americans would get a raise from a $15 minimum wage. And by eliminating sub-minimum wages, we reduce racial inequity, legacies of slavery, and severe gender discrimination and harassment.

I just want to thank both of you so much for joining me. Saru Jayaraman is the president of One Fair Wage, a group that advocates for raising wages and working conditions for restaurant service workers. She’s also director of the Food Labor Research Center at the University of California Berkeley. Thank you so much for joining me.

Jeff Miron is a senior lecturer at Harvard and director of economic studies at the Cato Institute, a libertarian think tank based in Washington DC. Thank you for joining me, Jeff.

My pleasure. Thank you for having me. [MUSIC PLAYING]

If you want to learn more about the minimum wage, I recommend reading the full report from the Congressional Budget Office published in February about what Biden’s bill to raise the minimum wage $15 an hour would actually mean for jobs and the economy. And for the policy wonks — I know who you are — I also recommend the Bureau of Labor Statistics’ February report on the characteristics of minimum wage workers. You can find links to both of these reports in our episode notes. Finally, some of you called in with your own stories about student loan debt after last week’s episode.

Hi, my name is Kendra. I’m an African-American woman who graduated from George Washington University in 1997. My experience has been chronic oppression due to student loan debt accompanied by low to no income over several years. There should be complete forgiveness for those who have suffered such a burden. I’m Janelle from Vermont, and I have over $50,000 of student loans. There’s nothing I can do but continue to pay and hope that when I die, the remaining debt doesn’t carry on to my children.

The Argument is a production of New York Times Opinion. It’s produced by Phoebe Lett, Elisa Guttierez, and Vishakha Darbha, edited by Alison Bruzek and Paula Szuchman with original music and sound design by Isaac Jones and fact-checking by Michele Harris. [MUSIC PLAYING]

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The federal minimum wage of $7.25 an hour hasn’t changed since 2009. Workers in 21 states make the federal floor, which can be even lower for people who make tips. And at $7.25 an hour, a person working full time with a dependent is making below the federal poverty line.

[You can listen to this episode of “The Argument” on Apple , Spotify , Google or wherever you get your podcasts .]

States such as California, Florida, Illinois and Massachusetts have approved gradual minimum wage increases to reach $15 an hour — so is it time to do it at the federal level?

On Wednesday 20 senators from both parties are set to meet to discuss whether to use their influence on minimum wage legislation.

Economists have argued for years about the consequences of the hike, saying employers who bear the costs would be forced to lay off some of the very employees the minimum wage was intended to support. A report by the Congressional Budget Office on a proposal to see $15 by 2025 estimates the increase would move 900,000 people out of poverty — and at the same time cut 1.4 million jobs.

[ Instagram Live : Watch host Jane Coaston and Kara Swisher discuss whether we need to raise the minimum wage .]

On today’s episode, we debate the fight for $15 with two people who see things very differently. Saru Jayaraman is the president of One Fair Wage and the director of the Food Labor Research Center at the University of California, Berkeley. Jeffrey Miron is a senior lecturer in the department of economics at Harvard University and the director of economic studies at the Cato Institute.

Mentioned in this episode:

The Congressional Budget Office’s February 2021 report on the budgetary effects of the Raise the Wage Act of 2021.

The U.S. Bureau of Labor Statistics’ April 2020 report “Characteristics of Minimum Wage Workers.”

(A full transcript of the episode will be available midday on the Times website.)

Thoughts? Email us at [email protected] or leave us a voice mail message at (347) 915-4324. We want to hear what you’re arguing about with your family, your friends and your frenemies. (We may use excerpts from your message in a future episode.)

By leaving us a message, you are agreeing to be governed by our reader submission terms and agreeing that we may use and allow others to use your name, voice and message.

“The Argument” is produced by Phoebe Lett, Elisa Gutierrez and Vishakha Darbha and edited by Alison Bruzek and Paula Szuchman; fact-checking by Michelle Harris; music and sound design by Isaac Jones.

Reasons Why Minimum Wage Should Be Raised Essay: Benefits for Workers, Society, and The Economy

The minimum wage controversy has been among the most discussed and argued issues for many years. Those in favor of raising the minimum wage argue that the increased income would enable low-wage workers to better their lives, reduce poverty and income disparity, as well as bring an economic boost. On the contrary, many opponents of raising the minimum wage contend that it will cause job losses and lead to higher prices.

This essay, written by a custom essay company , can help you understand the topic. By examining the evidence and arguments from both sides of the debate, we can gain a better understanding of the potential impact of raising the minimum wage and make informed decisions about public policy in this area.

My Thoughts on Should Minimum Wage Be Raised Essay

The minimum wage has long been a contentious issue in the United States, with opinions divided on whether it should be increased or left at its current level. Those in favor of increasing the minimum wage argue that it would help to alleviate poverty, reduce income inequality, and stimulate economic growth. However, opponents of a minimum wage hike suggest that it could lead to job losses, inflation, and reduced economic competitiveness.

Nevertheless, by considering the potential benefits and drawbacks of increasing the minimum wage, I would like to to provide a comprehensive analysis of this complex issue and help readers come to an informed opinion.

Reduction of Poverty and Inequality

One of the most compelling reasons for raising minimum wage is the reduction of poverty and inequality. According to the Economic Policy Institute, raising the minimum wage to $15 per hour could lift 1.3 million workers out of poverty and reduce income inequality. This is because low-wage workers, who are often from marginalized communities, rely on minimum wage jobs to support themselves and their families. By increasing the minimum wage, their income would increase, allowing them to meet their basic needs, such as food, housing, and healthcare.

Boost in Consumer Purchasing Power

Increasing the minimum wage would also lead to a boost in consumer purchasing power. When low-wage workers earn more, they are more likely to spend more, which would stimulate the economy. For instance, a report by the National Employment Law Project estimated that raising the minimum wage to $15 per hour would generate an additional $118 billion in economic activity over a five-year period.

Improved Health Outcomes

Low-wage workers often cannot afford basic healthcare services, which can lead to serious health consequences. By raising the minimum wage, workers would have access to better healthcare services, which would lead to improved health outcomes. This is because when low-wage workers have better health, they are more productive, which benefits both the employer and the employee.

Reduced Reliance on Social Services

Low-wage workers often rely on social services such as food stamps, housing subsidies, and Medicaid to make ends meet. By raising the minimum wage, workers would be able to earn enough to support themselves and their families without having to rely on social services. This would reduce the burden on taxpayers and enable the government to allocate resources to other areas of need.

Encourages Workforce Productivity and Loyalty

By paying workers a fair wage, they are more likely to be productive and loyal to their employer. This is because they feel valued and appreciated, which leads to higher job satisfaction and engagement. Additionally, when workers are paid a fair wage, they are less likely to leave their jobs, which can reduce the costs associated with hiring and training new employees.

While there are differing opinions on the impact of raising the minimum wage, there is evidence to support the many benefits that come with increasing it. Raising the minimum wage can help to reduce poverty and income inequality, boost consumer purchasing power, improve health outcomes, and reduce reliance on social services.

Furthermore, paying workers a fair wage can lead to increased productivity, loyalty, and job satisfaction. While there may be some initial costs associated with raising the minimum wage, the long-term benefits can outweigh them. As society moves forward, it is important to consider the potential impact of increasing the minimum wage and work towards a more equitable and just society where all workers are paid a fair wage for their labor.

Through thoughtful policy-making and continued advocacy, we can ensure that the benefits of raising the minimum wage are realized for workers, society, and the economy as a whole.

Tips on Writing Why Should Minimum Wage Be Raised Essay

The issue of minimum wage has become a hotly debated topic in recent years, with advocates calling for an increase in the minimum wage to address issues of poverty and inequality. If you are passionate about this topic and want to share your views, writing an essay on why minimum wage should be raised can be a great way to do so. However, to make your essay stand out, it’s important to approach it with a clear and well-structured argument. Here are some tips on how to write an excellent essay on why minimum wage should be raised, so you can effectively convey your ideas and contribute to the ongoing discussion around this important issue.

Research the Topic

Before you start writing a raising minimum wage essay, it is important to research the topic and gather as much information as possible. This will help you to understand the various arguments and counter-arguments related to the minimum wage. Use reputable sources, such as academic journals, government reports, and news articles, to gather information.

Develop a Strong Thesis Statement

A thesis statement is the backbone of your essays on raising minimum wage and sets the tone for the rest of your writing. Make sure your thesis statement is clear, concise, and reflects your stance on the topic. A strong thesis statement might read: “Raising the minimum wage is necessary to reduce poverty and inequality, boost the economy, and provide workers with a fair living wage.”

Support Your Argument with Evidence

To write an opinion article , you need to support your claims with evidence. Use statistics, data, and examples to illustrate your points and provide evidence for your claims. For example, you might use data to show that raising the minimum wage has led to increased consumer spending in other countries, or you might cite research that shows how low wages can lead to poor health outcomes.

Address Counter-Arguments

When writing about a contentious topic like the minimum wage, it is important to address counter-arguments. Acknowledge the other side’s point of view and provide evidence to counter their claims. This will help you to build a more persuasive argument and show that you have considered all sides of the issue.

Use Clear and Concise Language

Your essay should be easy to read and understand. Use clear and concise language to communicate your ideas effectively. Avoid using jargon or technical language that might confuse your reader. Make sure to proofread your work carefully to catch any spelling or grammar errors that could detract from your argument.

By following these tips, you can develop a compelling argument that supports your position and addresses counter-arguments.

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Should We Raise The Minimum Wage?

Cardiff Garcia

Stacey Vanek Smith

Should We Raise the Minimum Wage?

Burr vs Hamilton. The Celtics vs the Lakers. Godzilla vs King Kong. To this list of famous rivalries you can now add: advocates of raising the minimum wage to 15 dollars an hour... versus opponents of raising it.

We have been watching economists duke it out on social media and in their papers, arguing for and against the idea. This is a topic where things can get heated, but it's also a really important and nuanced debate.

To show what's at stake, Stacey and Cardiff take sides on the minimum wage debate. Get ready for a fight over the minimum wage... with maximum rage!

Articles on Minimum Wage:

Characteristics of minimum wage workers (2019) , from the Bureau of Labor Statistics

How Increasing the Federal Minimum Wage Could Affect Employment and Family Income , from the Congressional Budget Office

Minimum Wages and Racial Inequality (paywall), by Ellora Derenoncourt and Claire Montialoux

Impacts of Minimum Wages: Review of the International Evidence , by Arindrajit Dube

City Limits: What do Local-Area Minimum Wages Do? , by Arindrajit Dube and Attila S. Linder

Racial Inequality and Minimum Wages in Frictional Labor Markets , by Jesse Wursten and Michael Reich

The Disparate Impact of a National $15 Minimum Wage , by Paul H. Kupiec

Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States? , by David Neumark and Peter Shirley

The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data , by Kevin Rinz and John Voorheis

The Economic Impact of a High National Minimum Wage: Evidence from the 1966 Fair Labor Standards Act , by Martha J. Bailey, John DiNardo, and Bryan A. Stuart

History of Changes to the Minimum Wage Law , from the Department of Labor

Why $15 Minimum Wage is Pretty Safe , by Noah Smith

The Minimum Wage Pushback , by Noah Smith

Minimum Wage Tracker , from The Economic Policy Institute

$15 Minimum Wage Subverts Biden Recovery Plan (paywall), by Michael R. Strain

How Can Price Theory Help Us Navigate the Minimum Wage Debate? , by Brian Albrecht

Pay Is Rising Fastest for Low Earners. One Reason? Minimum Wages. , by Ernie Tedeschi

Music by Drop Electric . Find us: Twitter / Facebook / Newsletter .

Subscribe to our show on Apple Podcasts , PocketCasts and NPR One .

• minimum wage

109 Minimum Wage Essay Titles & Examples

🤫 secrets of a powerful minimum wage essay & thesis, 🏆 best minimum wage essay topics & examples, 📌 most interesting minimum wage topics to write about, 👍 good minimum wage research topics, ❓ research questions about minimum wage.

Your argument is the most crucial aspect of your minimum wage essay, whether you are taking a stance for or against raising it. Thus, you will have to cover the unemployment and poverty causes and effects, which create the borderline for people’s bare existence.

However, explaining the mechanism behind the issue is only one of the facets. You will need to pay attention to creating a remarkable minimum wage thesis statement, outline, and more. Here are all the things you need for successful essay writing:

• Structure. Ideally, you should write your outline before you begin writing instead of during the process. It should reflect your argument and allow for the creation of a smooth transition between subtopics. Being coherent and easy to read ensures your readers interest in any topics you may mention.
• Ideas. These may come from your previous research, thoughts, or brainstorming. The more thought you put into your argument, the more minimum wage essay ideas you may gather and present to your readers. Doing so helps you create an excellent essay that is ready to counter-argue any problem.
• Thesis statement. One concise and on-point sentence should embody your whole paper, giving your readers a glimpse of what to expect from your work and what conclusions you hope to draw. If you are not sure of the quality of your thesis statement, then you can read sample sentences online. Continuously ask yourself whether the examples that you have found help the essay writer condense their argument.
• Title. Grabbing your readers’ attention is possible when you have understood how to create well-written minimum wage essay titles. Without them, your essay may be overlooked and forgotten, so do not be afraid to experiment with differently worded titles so you can judge, which may have the best effect on a potential audience.
• Conclusion . Finalizing your work and drawing coherent resolutions from it is the goal of all minimum wage essay questions. Do not reference any of the research you called upon in this paragraph, but instead make obvious the links between your used sources and final verdict. Your conclusion should be most representative of your work and leave a good impression on your audience.

Apart from these structural elements, you should also pay attention to the research aspect of your paper, integrating different credible titles into your bibliography.

This action demonstrates a comprehensive knowledge of minimum wage essay topics, as well as highlights the congruency of your thoughts with the academic community.

You may use different sources, from books and journals, from contemporary poverty speech performances to deportation laws.

You should not confine yourself to your outlined timeline and can mention modern-day implication of minimum wage, especially if it adds to your argument and does not forget your central issue.

Sticking to your argument is an essential aspect of essay writing. Asses each sentence you write and remove it if it does not suit your thesis statement. Your readers will notice all loose-ended and pointless arguments, which are irrelevant to your central theme.

Removing them will only increase the quality of your essay, allowing you to get better marks by being both coherent and comprehensive.

If doing so has dropped your work below your aspired word count, then you should review your outline and look for ways to develop your argument differently.

Do you want to write an essay that is better than merely “excellent”? Check IvyPanda’s essay samples to find out how!

• The effects of the introduction of the National Minimum Wage on employment This paper evaluates the theoretical assumptions regarding the effects of the introduction of the National Minimum Wage within the British home care sector.
• Should the US Raise the Minimum Wage to $15 an Hour? While increasing the minimum wage is costly for businesses, not increasing the minimum wage is costly for the United States government.
• The Raising the Minimum Wage Article by Scott Raising the minimum wage: Good for workers, businesses, and the economy. The issue of the federal minimum wage has been long debated as it affects the economic status of the U.S.
• Effects of Minimum Wage Increase The proposed increase will indeed benefit workers by raising their overall living standards by granting minimum wage employees a more appropriate pay level to contend with cost-of-living increases and the supply side of the labor […]
• Effects of an Increasing Minimum Wage A minimum wage increase is beneficial to the company in the long term but expensive in the short term. The rising minimum wage would lead to reduced research and development in purchasing machinery and software, […]
• Definition of the Minimum Wage and Its Aspects An increase in minimum wages will lead to substitution in the market. An increase in wages will be directly proportional to the prices of commodities in the market.
• Researching of Minimum Wage and Living Wage Like any other commodity, labor is determined by supply and demand in the market, and any artificial intervention disrupts the market balance, leading to shortages and gray employment.
• Raising the Minimum Wage and Its Disadvantages The average leftists will try to achieve an increase in the level of salaries with the help of the minimum wage.
• Minimum Wage: Overview and Analysis The pandemic has led to a huge deterioration of the economy, and raising the minimum wage is not something that businesses can handle.
• Minimum Wage Legislation in Texas The key objectives for a lobbyist for the organization would be to emphasize the numerous benefits to the working class while presenting arguments that changes will not be disruptive to the economy or businesses.
• Increasing Minimum Wage in Los Angeles As already mentioned, it may be critical to evaluate the basic needs of the population precisely and provide sufficient minimum wage. Hence it may be needed to increase the minimum wage in the state of […]
• National Minimum Wage Analysis The minimum wage is the legally established wage for the rate fulfilled by the employee. The higher the minimum wage, the higher the taxes.
• Minimum Wage and Government Interventions Coming to the issue of minimum wage, it is the “floor price” of labor that is determined by the federal government to guarantee fair wages to the workers.
• Raising the Minimum Wage: Positive and Negative Aspects Increasing the minimum wage will increase the social efficiency of society, which is determined by the degree of satisfaction of its needs.
• Minimum Wage According to Marxism Analyzing the issue from the Marxist viewpoint, it can be concluded that increases in the minimum wage are beneficial to the working class but not to capitalists.
• Minneapolis Government Trends in Minimum Wage Increases According to the report of Associated Press, the City Council of Minneapolis has passed the ordinance to increase the minimum wages in the city to 15 dollars per hour.
• Addison Ventures Company’s Minimum Wage vs. Ethics The main problem at Addison Ventures arises from the fact that the company is finding t quite challenging to balance between the cost of labor in terms of the minimum wage for its employees and […]
• Minimum Wage Policy in Canada In response, according to Tipton et al, the minimum wage policy was put in place to counter the rising poverty level by ensuring that employees in Canada experienced the basic standards of compensation and employment […]
• Increasing Minimum Wage in the US Restaurant Industry With the growing economy and the overall rise in the cost of life, it becomes evident that the minimum wage is insufficient for people to satisfy their basic needs and ensure an appropriate standard of […]
• Minimum Wage in California and Other States This paper aims to explore the minimum wage in the state of California as well as the significance of independent minimum wages for separate states and the conditions of workers in outsourced companies.
• The Minimum Wage in China: Lee Wang Case The point in this case is that the main purpose of labour inspection is to correct the violation of labour ethics by employers, such as a company underpaying its employees, and to defend the employees’ […]
• Social Policy: Living on a Minimum Wage One of the primary findings is that the minimum wage is not a living wage. Another matter of concern is the fact that minimum living affects children and their prospects in life.
• The Concept of Minimum Wage Moreover, the rise of the minimum wage boosts the economy of the whole country and increases the quality of life. So, if the minimum wage is 10% higher, and that causes the reduction of poverty […]
• Minimum Acceptable Remuneration Regulation A comparison of the minimum wages in Australia and the US shows that adopting policies on minimum wages to reflect levels of training and incorporate economic indicators has positive effects on employment.
• Fixing an Initial Minimum Wage The paper will also determine the reasons why the minimum wage is important to a nation and the reasons why minimum wage rate should not be constituted in a country.
• Long Term Investment Decisions Another policy, which the government may have in the regulation of a market economy is the regulation of the amount of tax levied on products and services.
• Minimum Wage in Saudi Arabia and Other Countries In this respect, the fair wage expands the concepts of the living wage and minimum wage to include the conditions of work.
• Raising Minimum Wage in the US The current economic recession that continues to impact the U.S.economy The main problem with the proposal of President Obama lies in what the article states as the possibility of companies leaving the U.S.due to the […]
• Minimum Wage: Pros and Cons, Effects of Increase Labor union laws and minimum wage laws have contributed a lot to the current trend of structural unemployment in the United States of America.
• Minimum Wages in Different American States These criticizers continue to epic that the minimum wage tends to reduce the demand expected of workers where they argue that this is greatly caused by the reduction in the number of the jobs and […]
• Minimum Wage Effectiveness However, the minimum wage can be a good stimulus for young people to continue their study instead of joining the “labor market”, and this is very good for the development of society since it leads […]
• Minimum Wage Issue: Political Regulation Governments usually impose minimum wage to reduce poverty; indeed, increase in the minimum wage is also said to increase motivation of the workers and hence lead to more productivity. Increase in the minimum wage does […]
• The Minimum Wage in the US: Situation Overview Other people argue that increasing the minimum wage would lead to increase in commodity prices by the employers to cover for the increased costs thereby beating the reason for the increase.
• Issues that affect low wage earners Low earner hardly afford good housing; they live in houses that do not meet the standards of an adequate housing systems, the reason why they opt for such houses is because they have limited funds […]
• The Pros of Raising the Canadian Minimum Wage In turn, the increase in the prices of goods and services will result to the decrease in the company’s profits. The rise in the minimum wage will cause the retrenched employees to join the ranks […]
• The Positive Effects of Minimum Wage on the Economy
• The Political Economy of the National Minimum Wage Institution
• Why the Minimum Wage Matters in the U.S. Industry Economy
• Why The Age Requirement Can Start Working For Minimum Wage Jobs
• When Is A Good Time To Raise The Minimum Wage
• Union Power, Minimum Wage Legislation, Endogenous Labor Supplies and Production
• Work-Related Training and the New National Minimum Wage in Britain
• Welfare Effects of Minimum Wage and Other Government Policies
• What Is Minimum Wage Is Not Ideal And Struggles
• Why the Minimum Wage Orthodoxy Reigns Supreme
• Wage Distribution And Earnings Inequality Impacts Of The Minimum Wage
• The Positive And Negative Effects Of Raising Minimum Wage
• The Social Issue of the Minimum Wage and the Need to Raise the Current Minimum Wage in America
• Using the EITC to Help Poor Families: New Evidence and a Comparison with the Minimum Wage
• United Kingdom: Developing a Progressive Minimum Wage in a Liberal Market Economy
• Unemployment Benefit, Minimum Wage And Average Salary Earnings In Romania
• Why The Minimum Wage Shouldn’t Be Raised
• The Short-Run Effects of the Minimum Wage on Employment and Labor Market Participation: Evidence from an Individual-Level Panel
• The National Minimum Wage and Hours of Work: Implications for Low Paid Women
• The Negative Impact of Raising the Minimum Wage
• The Positive Impacts of Raising the Minimum Wage on the Economy, the Health of the Citizens, and Their Quality of Life
• The Optimum Minimum Wage When Labor Services are Taxed
• Wage Inequality And Raise The Minimum Wage
• Thinking about Minimum Wage Increases in Alberta: Theoretically, Empirically, and Regionally
• Welfare Benefits, Minimum Wage Rate and the Duration of Welfare Spells: Evidence from a Natural Experiment in Canada
• The Productivity‐Enhancing Impacts of the Minimum Wage: Lessons from Denmark and New Zealand
• Why Has the British National Minimum Wage Had Little or No Impact on Employment
• Why Minimum Wage Jobs Pay Their Employees Unfairly
• Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data
• The Rate Of Substitution Between Low Pay Workers and The National Minimum Wage
• The Pros and Cons of Raising the Minimum Wage of Workers
• The Struggle to Fight the Minimum Wage in America in Nickel and Dimed, a Book by Barbara Ehrenreich
• Wage Dispersion and the Minimum Wage Spike in a Search Economy With Wage-Posting
• The Role of Risk Preference in Immigration and Minimum Wage Policies
• Which Age Should Be The Minimum Wage For Drinking
• The Truth Behind the Minimum Wage in America in Nickel and Dimed, a Novel by Barbara Ehrenreich
• Using Local Labor Market Data to Re-Examine the Employment Effects of the Minimum Wage
• The Wage and Employment Dynamics of Minimum Wage Workers
• What Should Be Done About The Minimum Wage
• Understanding Wage Theft: Evasion and Avoidance Responses to Minimum Wage Increases
• The Negative Effects of Raising the Minimum Wage
• The Potential Impact of the Minimum Wage in Rural Areas
• Working Conditions At Minimum Wage Jobs
• The Unexpected Long-Run Impact of the Minimum Wage: An Educational Cascade
• Did the German Minimum Wage Reform Influence Employment Growth in 2015?
• Are Wage and Employment Effects Robust to Alternative Minimum Wage Variables?
• Does the Minimum Wage Bite Into Fast-Food Prices?
• Does the Minimum Wage Cause Inefficient Rationing?
• Are There Long-Run Effects of the Minimum Wage?
• Does Raising the Minimum Wage Help the Poor?
• How Much Would Increasing the Minimum Wage Affect Food Prices?
• Does the German Minimum Wage Help Low Income Households?
• How Raising Minimum Wage Will Hurt the Economy?
• What Are Three Effects of Raising the Federal Minimum Wage?
• Did the National Minimum Wage Affect UK Prices?
• Why Does the Minimum Wage Exist?
• Does the Minimum Wage Affect Employment?
• Should the Minimum Wage Be Abolished?
• How Does the Minimum Wage Affect Employment via On-The-Job Search Intensity?
• Does Increasing Minimum Wage Decrease Poverty?
• How Has Minimum Wage Influenced the United States?
• Can the Minimum Wage Force the Hand of Small Businesses?
• How Does the Minimum Wage Affect Firm Investments in Fixed and Human Capital?
• Can the Minimum Wage Reduce Poverty?
• Does Minimum Wage Affect Workplace Safety?
• Has the National Minimum Wage Reduced UK Wage Inequality?
• Did the Minimum Wage Affect the Incidence of Second Job Holding in Britain?
• Did Minimum Wage Increases Reduce Employment?
• How Is the Minimum Wage Debate Viewed Through a Marxist?
• How Does the Minimum Wage Affect the Employment Statuses of Youths?
• Does the Minimum Wage Affect Welfare Caseloads?
• Should Raising Minimum Wage Have Stronger Job Growth?
• How Many Americans Are Working for Minimum Wage and Living in Poverty?
• Does Increasing the Minimum Wage Reduce Poverty in Developing Countries?
• Chicago (A-D)
• Chicago (N-B)

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Understanding the Minimum Wage

• Pros of Raising
• Cons of Raising

The Bottom Line

• Macroeconomics

What Are the Pros and Cons of Raising the Minimum Wage?

J.B. Maverick is an active trader, commodity futures broker, and stock market analyst 17+ years of experience, in addition to 10+ years of experience as a finance writer and book editor.

The minimum wage is the lowest hourly rate that an employer can pay an employee according to law. Many states have minimum wages in place. But the federal minimum wage hasn't increased since 2009, despite many attempts to do so. The discussion around increasing the minimum wage brings both pros and cons.

As of January 2024, Washington had the highest state minimum wage rate at $16.28 per hour. Washington, D.C. has the highest rate overall at $17.00 an hour.

There's also a federal minimum wage at $7.25 an hour. Employers must pay minimum wage employees whichever rate is higher, so if the federal rate is higher than the state rate, an employee gets the federal minimum wage. The same is true if the state rate is higher.

Minimum wage laws have been in effect in the United States since 1938 when the first federal rate was set at $0.25 per hour. Amendments were made to the Fair Labor Standards Act (FLSA) since then, increasing the base rate of pay for many hourly workers according to inflation.

Key Takeaways

• Despite efforts to raise the minimum wage, no bill has successfully passed both chambers of Congress.
• Proponents of raising minimum wages argue that changes are needed to help incomes keep pace with increasing costs of living, and a higher minimum wage will lift millions out of poverty.
• Opponents of raising the minimum wage believe that higher wages could lead to inflation, make companies less competitive, and result in job losses.

As noted above, the term minimum wage refers to the legally established lowest amount that employers are required to pay their employees for their work. It serves as a baseline wage that is intended to ensure that workers receive fair compensation for their labor, covering basic living expenses and preventing the exploitation of low-wage workers.

The primary purpose of minimum wage is to provide workers with a level of income that allows them to meet their essential needs. It acts as a safeguard against extremely low wages and helps reduce poverty and income inequality within a society. By setting a minimum wage, governments aim to promote decent working conditions and provide a degree of economic security for workers.

National and sub-national government entities analyze several factors when considering whether to raise or maintain the current level of minimum wage. As the general increase in prices over time, inflation can erode purchasing power . Economic conditions such as the state of the economy may call for adjusted labor market dynamics. Social equity considerations may call for more livable wages. Regardless of the consideration, there are various reasons to support and detract from raising the minimum wage.

On Oct. 24, 1938, the first minimum hourly wage was put into effect. The wage rate was $0.25 per hour.

Pros of Raising the Minimum Wage

The primary argument advanced in favor of raising the minimum wage is that higher earnings would improve the overall standard of living for minimum wage workers by providing them with a more appropriate income level to handle the cost of living increases.

A 2022 study by the Congressional Budget Office analyzed the macroeconomic impact of the standard minimum wage reaching $15 per hour in 2027. The data reported that 10.9 million workers would be directly affected, while an additional 9.2 million workers would potentially be affected. The total directly or potentially affected workers by 2032 would surpass 23 million.

While some proponents of raising the minimum wage estimate that a much larger number of individuals and families will move out of poverty if they earn more money, a related potential benefit is a projected reduction in the need for federal and state government expenditures on financial aid for poor and low-income individuals.

Meanwhile, an intangible benefit that could translate into tangible benefits for both companies and employees is improved employee morale resulting from higher wages. Business owners frequently note the challenge of providing sufficient encouragement to spur workers to put maximum effort into their job duties, and that this is particularly problematic with low-wage workers who feel that their job efforts aren't keeping them out of poverty.

Increasing employee morale could easily translate into more tangible benefits, such as increased employee retention and reduced hiring and training costs. Employees who are more inclined to stay with a company longer could benefit from greater advancement and an overall reduction in job-related relocation expenses .

A boost to economic growth is another potential advantage of increasing the minimum wage, as consumer spending typically increases along with wages. A higher minimum wage would put more discretionary dollars in the pockets of millions of workers; money that would then flow to retailers and other businesses.

Lawmakers have tried to raise the federal minimum wage on many occasions. The U.S. House of Representatives passed an amended version of the Raise the Wage Act of 2019 in July of that year to gradually increase the federal minimum wage to $15 an hour by 2025. But the bill died in the Senate. President Joe Biden tried to increase the rate for federal contract workers to $15 per hour, but that motion was blocked by a U.S. district judge in September 2023.

Cons of Raising Minimum Wage

Among the disadvantages of increasing the minimum wage is the probable consequence of businesses increasing prices, thus fueling inflation .

Opponents argue that raising the minimum wage would likely result in wages and salaries increasing across the board, thereby substantially increasing operating expenses for companies that would then increase the prices of products and services to cover their increased labor costs.

Increased prices mean a general increase in the cost of living that could essentially negate any advantage gained by workers having more dollars in their pockets.

Though the current federal minimum wage in the U.S. is $7.25 per hour, 30 states and D.C. have approved higher minimum wages.

Another projected problem resulting from an increased minimum wage is that of potential job losses. Many economists and business executives who point out that labor is a major cost of doing business argue that businesses will be forced to cut jobs to maintain profitability.

The same 2022 study mentioned above by the Congressional Budget Office also analyzed how higher wages may result in the elimination of roles. By 2027, the CBO estimated that up to 1.6 million jobs would be lost. By 2032, this would increase to 1.9 million lost jobs.

One potentially negative impact that is less readily apparent is the possibility that a higher minimum wage would result in increased labor market competition for minimum wage jobs.

The net outcome of an increased minimum wage might be a large number of overqualified workers taking minimum wage positions that would ordinarily go to young or otherwise inexperienced workers. This could impede younger, less experienced entrants to the job market from obtaining work and gaining experience to move their careers forward.

How Does Minimum Wage Affect the Economy?

The impact of minimum wage on the economy is a complex issue. Supporters argue that increasing minimum wage can stimulate consumer spending and boost the overall economy by putting more money in the hands of low-wage workers. Critics, on the other hand, warn that higher labor costs might lead to job cuts, automation, and increased prices for goods and services.

Is Minimum Wage the Same for All Workers?

No, minimum wage laws often take into account different categories of workers. For example, there might be different minimum wage rates for adult workers, minors, or workers in specific industries. Tipped employees, like servers in restaurants, may also have a lower minimum wage due to the expectation of receiving tips .

Does Inflation Impact Minimum Wage?

Yes, inflation can erode the purchasing power of minimum wage over time. To address this, some governments index minimum wage to inflation rates. This means that the minimum wage is adjusted periodically to ensure that its real value remains relatively constant.

How Does Minimum Wage Affect Small Businesses?

The impact of minimum wage increases on small businesses can vary. Some small businesses might struggle to absorb the additional labor costs, potentially leading to layoffs or reduced hours. Others might adapt by increasing prices or finding operational efficiencies to mitigate the impact.

Do All Countries Have Minimum Wage Laws?

While minimum wage laws are prevalent in many countries, not all nations have implemented such legislation. The presence and level of minimum wage often depend on a country's economic structure, labor policies, and social priorities.

Raising the federal minimum wage to $15 an hour is a policy goal for many lawmakers. Increasing the minimum wage is expected to lift individuals out of poverty and improve work ethic, however, it also comes with many possible negative implications, such as inflation and a loss of jobs.

U.S. Department of Labor. " State Minimum Wage Laws ."

U.S. Department of Labor. " Minimum Wage ."

U.S. Department of Labor. " History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938-2009 ."

Congressional Budget Office. " How Increasing the Federal Minimum Wage Could Affect Employment and Family Income ."

The Brookings Institution. " How Family Sustaining Jobs Can Power an Inclusive Recovery in America’s Regional Economies ."

Berkeley Political Review. " No More Lies: The Truth About Raising the Minimum Wage ."

U.S. Congress. " H.R. 582 - Raise the Wage Act ."

Reuters. " Biden's $15 minimum wage for federal contractors blocked by US judge ."

U.S. Department of Labor. " Consolidated Minimum Wage Table ."

Congressional Budget Office. " The Budgetary Effects of the Raise the Wage Act of 2021 ," Page 8.

U.S. Department of Labor. " Questions and Answers About the Minimum Wage ."

Pew Research Center. " The U.S. Differs From Most Other Countries in How it Sets Its Minimum Wage ."

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Why Minimum Wage should Increase

How it works

Across America, the ranks of the working poor are growing. Since 1938, when the minimum wage was first introduced (at a rate of $0.25 an hour), the federal minimum wage has increased 22 times. Twenty-one states have minimum wages at or below the federal minimum and various other states have minimum wages that are above $7.25 an hour, but still inadequate. Even though some states have higher minimum wage than others it still doesn’t help the workers rise higher than the poverty level because the government increases the taxes and businesses increase their prices.

Most minimum-wage workers aren’t teenagers these days. They’re major breadwinners who need a higher minimum wage in order to keep their families out of poverty. Regarding the wage rate, the government of the United States intervened to maintain a lower limit on the hourly wage rate of a worker’s labor.

A non-profit organization that seeks to help decrease the problem is known as the National Employment Law Project (NELP). NELP is a non – profit organization promoting policies to’ create good jobs, increase access to work and enhance protection and support for low – wage and unemployed workers. For over 45 years, NELP has been seeking to ensure that America upholds its promise of opportunities and economic security through work for all workers. The topic of raising minimum wages is a tough topic and has many sides. With however saying that increasing minimum wage has pros and cons. By increasing the minimum wage, the economy will be lifted, the bond with the government assistance will be broken, and the amount of consumer spending will increase. The increase in the minimum wage would greatly benefit the nation, as all the citizens desperately need financial stability.

Raising minimum wage pay would benefit the economy in various ways. A higher minimum wage not only increases the income of workers which is sorely needed to boost demand and drive the economy but also reduces turnover, cuts the costs imposed on taxpayers by low-road employers and pushes businesses towards a high-road, high-human capital model. Hypothetically, raising the lowest pay permitted by law would mean more cash in the pockets of specialists. In practice, it’s more complex. An author Sylvia Allegretto said, When the minimum wage doesn’t keep pace with inflation, its power erodes, it’s worth, less and less and less. Minimum wage is not the same in every place, so to the place Minimum wage is low its an issue. Even though the federal minimum wage hasn’t expanded since 2009, the dominant part of states has a higher minimum wage permitted by law than required by the government.

Moreover, some nearby regions have started the lowest pay permitted by law increases for their area. For example, San Francisco’s lowest pay permitted by law is higher than the province of California’s minimum wage. In California the minimum wage is $11 and in a high-cost city like Cali that’s barely enough to support a family. The low minimum wage in some places is a result of the unfortunate ethos in America. NELP is an organization that is known which some of its articles get published by higher and most known sources like New York Times, The Atlantic, and CBS News which can be considered a reliable source. It displays various information regarding their research and issues minimum wage. Some issues that are displayed are issues that they are trying to improve the economy such as, leveraging public dollars to create good jobs and removing unfair employment barriers for people with records. With such a background and information, they provided its quite hard to refute their work and reliability.

Raising the minimum wage, most people won’t need assistances from the government. Which in this case will break the bond with the government assistances? By breaking the bond and rising costs of necessities such as child care, housing, and health care gives people the ability to achieve a modest but adequate standard of living requires. Government assists that working full time can help and bring an individual’s income higher. For many workers in certain sectors, wages are so low that even those who work full time must rely heavily on government assistance to make ends meet. This recommends low pay by numerous businesses encouraged by debilitated or lacking work measures, for example, a low the lowest pay permitted by law and obsolete extra time directions is setting outlandish requests on open assets.

Raising wages among low-and center wage workers would all the while lift wages and decrease spending on open help programs. The legislature could then utilize these funds to support hostile to destitution endeavors or make new employment making ventures. Expanding the government, the lowest pay permitted by law is one basic way this could be accomplished however it isn’t the main way. Secondly on the appeal list is logical (logos), which is clearly represented throughout the whole article. As stated before, he claims that he has done a lot of research into the timeline of minimum wage and can predict not fully, but a good idea of how it would affect the economy of the United States. He provides examples as to why twelve dollars is more reasonable by comparing it to other countries like Britain. He uses an example from the past, in 1992 when the minimum wage was increased in New Jersey by a smaller amount, fast-food job growth was just as strong as restaurants in its bordering state Pennsylvania which had New Jersey’s old minimum wage. All his research and examples provide a steady pattern which if continued would help the economy oppose a drastic increase in the national minimum wage increase. He even wraps up his argument with a simple economics principle. Economics is all about understanding trade-offs and risks. The trade-off is likely to become more severe, and the risk greater, if the minimum wage is set beyond the range studied in past research. Something that does not even require a whole lot of logic, he makes it seem like common sense.

Another benefit of raising the minimum wage pay will increase consumer spending. July 24 marked nine years since the federal minimum wage was last increased. A full-time job shouldn’t mean a life in poverty. The federal minimum wage amounts to just $15,080 a year for full-time work. Holly Sklar a CEO of Business for a Fair Minimum Wage said, Businesses rely on consumer spending and consumer spending depends heavily on wages. The minimum wage sets the floor under worker pay millions of workers have paychecks above the inadequate minimum wage, but still too low to make ends meet. Some businesses, from small and medium-sized operations to major corporations like Ikea, Costco, Facebook, and Amalgamated Bank have taken steps to raise their wages well above the required minimum level. Pathos is used when it comes to how many people would even be helped, and what class would be left to suffer from it. Not only did I do research to back this up, but my own middle-class family was interviewed just to see how I would affect them by asking them about the wage increase. This was one of my emotionally charged approaches, and it worked on her. She started as a minimum wage worker and got capped at $18/hr. after working there since she was 18 years old, and now she is in her early forties. If the minimum wage increases, her wage won’t because she already did the most she can make, which got her to think it would be unfair that others would easily make almost as much who just started their job there.

My second would be people being cut hours or easily fired due to budgets needing to be made. It happens in minimum wage jobs where workers wouldn’t be paid for the same hours, which may cause anger. Imagine being cut hours so you wouldn’t even be paid that much, let alone being laid off over it. This topic is one that I am making partially emotionally charged in order to invoke the part of the audience that DOES work, or people who agree that there would be issues regarding the middle class. I want them to feel angered or sad on the subject despite the factor there are people in poverty, but I want them to do so in a way that they come to understanding our minimum wage shouldn’t be completely set to $15-over 50% of their pay right now without any raises or assistance they may have. Ethically, the debate over the topic is important since there is a portion of workers barely even getting by, and the right thing to do in many other’s minds would be to increase it to meet the costs of living.

The statements above make for good reasons to change the minimum wages. Increasing the minimum wage, the economy will be lifted, the bond with the government assistance will be broken, and the amount of consumer spending will increase. As stated before, minimum wages were not supposed to be a permanent job solution for Americans. There are situations that some of these people have faced that does not give them opportunities to go to college and find better employment. A few reasons could be having a record as a teenager, disabilities, and people being in a situation where they can’t wait for employment, they must take what they can get. To some these might be excuses and they may be, but the point is that they are doing their best to support their families. A person that is putting to work hard at least needs the governments’ help by giving them a chance to make it. NELP is a non – profit organization promoting policies to’ create good jobs, increase access to work and enhance protection and support for low – wage and unemployed workers. To get across their argument and share it with the world they used pathos, ethos, and logos.

The non-profit organization NELP effectively creates their argument using rhetorical appeals and strategies throughout their research and experiments and results in a persuasive piece in favor of raising the minimum wage. Should the minimum wage be raised to $15.00 an hour? That’s excessive. The point is to help the lower-income families get back on their feet, not destroy the economy. A bonus for the government, raising the minimum wage they can get more people off welfare. More people making a living on their own, this must be good for the economy. Raising minimum wage benefits everyone involved; the government, the economy, and the families.

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• Minimum Wage Essays

Should the Federal Minimum Wage Be Raised? Essay

As enshrined in the United States Fair Labor Standards Act, FLSA, the minimum wage policy aims at curbing poverty and minimizing income inequality. Over years, the minimum wage has been reviewed upwards amidst increasing cost of living, with the latest proposal seeking to increase the federal minimum wage to $10.10, up from the current $7.25 per hour. Nonetheless, increasing the minimum wage elicits intense debate from opponents and proponents of the strategy. This paper reviews secondary sources arguing for and against the increase in minimum wage as a way to curb poverty and inequality, and in its conclusion from the findings, arguing that the federal minimum wage should not be raised.

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Introduction

For over a century, the minimum wage remains a critical component of public policy. Neumark and Wascher (2008) trace its back to the 1890s in Australia and New Zealand. It aimed at ensuring fair pay for work done. In the United States, the provisions of the federal minimum wage are enshrined in the Fair Labor Standards Act, FLSA. With its history traced back to 1938 when applied to Virgin Islands and Puerto Rico, the FLSA has undergone numerous amendments to what it is today, covering the whole of the United States. It aims at helping families attain self-sufficiency, thus targeting low-paid occupations. Following amendments to its 2008 predecessor, the 2009 amendments set the federal minimum age at $7.25 per hour as documented by the United States Department of Labor, DOL (2014). Even though there are states with greater employee protection legislations, all states should adhere to both legislations. In cases where the minimum wage set by the federal authorities differ from that set by the state authorities, employees are entitled to the higher minimum wage.

Having not been amended for the past five years, there are calls to have the minimum federal wage increased. The United States President Obama set the momentum for this amendment, having called on the Congress to support the increment of the minimum wage to $10.10 an hour, soon thereafter signing the Executive Order on the same for employees under the new federal service contracts (Executive Office of the President, 2014). Should this Act be enacted, the DOL (2014) notes that federal minimum wage would be raised to $8.20, then to $9.15 and finally to $10.10 an hour on day one of the third month, after one year and after two years respectively. Tipped employees would also have their minimum wage increased to $3.00 per hour. Furthermore, depending on the increase in the Consumer price Index, these amounts would be reviewed by the Secretary of Labor after three years and yearly thereafter. Indeed, cities, counties and businesses have taken action to effect these amendments. However, despite such actions and efforts to have this bill passed, the proposal has been blocked by a majority of Congressional Republicans (Puzzanghera & Hennessey, 2014). These leaders raise critical issues that do not support the raising of the federal minimum wage. As such, the federal minimum wage should not be increased.

Arguments for Increasing the Federal Minimum Wage

The widespread argument is that raising the minimum federal wage would improve the living standards of the people. Adjusting for inflation, the Executive Office of the President (2014) found out that the value of the federal minimum wage has dipped by 33% from its peak, now considered less than it was at the beginning or the administration of Ronald Reagan in 1981. The wage is now approximately 36% of the average wage, this being a more than 50% dip from its peak. This increment would cushion families from the effects of inflation. At present, a family of four, having only one full-time worker who earns the minimum wage of $7.25, lives 17% below the poverty line. Increasing this wage to $10.10 would cause such a family to rise above the poverty line set at $24,100 in 2013 for a family unit of four, lifting about 2 million families in total from poverty (Puzzanghera & Hennessey, 2014). Moreover, the Executive Office of the President (2014) observes that such an increase would disproportionately advantage the working women who account for about 55% of all workers. They make up 72% of those undertaking predominantly tipped occasions and would thus be the beneficiaries of the first ever increase on tipped minimum wage since this was last witnessed over 20 years ago. Only 12% of beneficiaries of this increase are teenagers. With women being the greatest beneficiaries, it is argued that the welfare of many more families would be positively impacted.

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Secondly, raising the minimum federal wage would improve the economy. As documented by DOL (2014), approximately 28 million workers stand to benefit from an increase in the minimum wage. Of these, 19 million who earn less than $10.10 would be direct beneficiaries whereas 9 million low-wage workers would benefit from the associated ripple effect. The increased earning by the low-wage workers would cause them to spend more. According to the Executive Office of the President (2014), increasing the minimum wage would result in an increase in aggregate demand, citing the study by Federal Reserve Bank of Chicago economists which revealed that increasing the minimum wage would cause a 0.3% point growth in the short run. Furthermore, the associated benefits of “improved productivity, lower rates of absenteeism and increased retention” as documented by Puzzanghera and Hennessey (2014), increasing the minimum wage would improve productivity of employees. Consequently, this would foster the performance of the economy.

Increasing the minimum federal wage would attract more productive workers. According to Adams, “higher wages attract more productive workers who tend to be more affluent” (2013). These include spouses not much interested in the work or retirees who also could manage without the work. To such people, quality of work is paramount, thus high productivity. This positively affects the performance of organizations, making production attractive.

Arguments against Increasing the Federal Minimum Wage

On the other hand, increasing the federal minimum wage poses a risk of increasing unemployment rates, thus hurting the low-skilled workers, the people whom it should positively impact. Increasing the minimum wage would result in an increase in wage costs for employers across the country. To cushion themselves, employers would undertake job cuts so as to manage their expenses on wages. More specifically, Puzzanghera and Hennessey (2014) argue that this increment would cause a loss of 500,000 jobs, this being about 0.3% decrease in total employment and about 1.5% drop with regards to the total population of low-wage workers. Evidence from the American Action Forum indicates a slower employment growth in restaurants and retail occupations, these being fields where employers are most likely to be paid the minimum wage, in states that had implemented the raised minimum wages (Morath, 2014). This acknowledges minimum wage as a critical determinant of hiring decisions. Since the 2008 recession, employers have been struggling with production costs, a fact that has even forced them to pay their employees below the minimum wage. Adams (2013) gives examples of a Chinatown restaurant and Upper East Side pizza place in New York as among the many organizations which cannot pay even the current minimum wage. This is attributed to lack of enough wage competition as a result of the recession. Thus, increasing this minimum would cause most of them to close shop, leaving many unemployed. With unemployment being one of the top concerns for America, raising the minimum wage should not be approved as it would destroy instead of create the much needed jobs in the country.

In the same way, prices of commodities would rise, thus creating a null net effect of the increment on the lives of the low-wage workers. Should the increase in minimum wage not affect the employment rate as intended by the Executive Office of the President (2014), the wage bill for these employers would rise. Consequently, employers raise the money needed to pay for the higher wages by increasing prices of their products or services. Reviewing over 20 studies on minimum wage, Neumark and Wascher(2008) observed that in the US, increasing the minimum wage by 10% causes food prices to rise by about 4%. Should Wal-Mart or McDonald’s, for example, be the employers to increase the prices of their commodities as a result of the increased minimum wage, then, disadvantaged families could be further burdened as they are leading customers in these places (Adams, 2013). Therefore, in as much as DOL (2014) argues that the spending of the people would increase, there could be a high likelihood of this not being realized as the wage increment would be consumed by the additional costs of commodities. Therefore, there would be no meaningful net effect of the increased wage due to the increased prices of commodities.

Another critical fact to consider is that raising the federal minimum wage compromises on the development of an economy. Evidence from primary studies conducted by Neumark and Wascher (2008) from the mid-1990s shows that increasing the minimum wage makes such wages attractive to the youth and teenagers who in turn leave school for jobs. Increasing the minimum wage also makes firms shy away from offering training to young workers who are sources of wage growth in future. For these reasons, some states opt to offer the bare minimum wage as dictated by the federal authorities just for compliance. These findings attest to the fact that increasing the federal minimum wage could discourage education among the youth and teenagers and jeopardize the skills of the workforce in various firms thus negatively affecting the development of the economy.

There are better alternatives to dealing with poverty and inequality than increasing the minimum wage. One of the most fronted alternatives has been the alteration of the earned-income tax credit. Most of the low-wage earning employees struggle to meet their basic living expenses, especially those that have families to support. The government, through the earned-income tax credit initiative, gives payouts to such people with low incomes. This is meant for the poor families and not the relatively affluent spouses, retirees or college students (Morath, 2014). Increasing this credit provides a better alternative to curbing inequality and poverty, the basic reasons on which the argument on increased federal minimum wage is based. In fact, Adams (2013) observes that even conservative groups such as the Employment Policies Institute support this strategy. Moreover, studies show that increasing the minimum wage has no or little effect on poverty reduction. Neumark and Wascher(2008) cite an academic study which documented no change in poverty rates following the federal and state wage increases effected between 2003 and 2007. Therefore, instead of increasing the minimum wage, other more effective alternative strategies to reducing poverty and inequality should be adopted.

The minimum wage policy as documented the United States Fair Labor Standards Act, FLSA seeks to curb poverty and minimize income inequality. The main aim of this policy is to help families attain self-sufficiency and therefore targets workers in low-paid occupations. When the government increases the federal minimum wage, it anticipates improving the living standards of its people, lifting them above the set poverty line. The economy also improves due to increased aggregate demand and also attracts more productive workers for employment. Nonetheless, there being benefits and costs with increasing the minimum wage, its implementation should follow a consideration of the acceptability of the tradeoffs between the benefits and costs. Overwhelming body of evidence argues against increasing the minimum wage as a way to curb inequality or poverty. Increasing the federal minimum wage would almost certainly lead to a reduction in employment opportunities, especially among the entry-level, low-skilled wage earners for whom a job presents the first step on their opportunity ladder. It results in increased cost of commodities thus a null net effect on poverty levels in addition to compromising the development of the economy due to promoting school drop-outs among the youth and teenagers attracted by the higher wages. There exist better alternatives to reducing poverty and minimizing income inequality such as increasing the allocation for earned-income tax credit. As such, the federal minimum wage should not be raised.

Adams, S. (2013, November 11). The minimum wage debate: Who’s right? Forbes. Retrieved 12 November 2014 from http://www.forbes.com

Executive Office of the President. (2014, August). A year of action: Progress report on raising the minimum wage. Washington, D.C.: The White House. Retrieved 11 November 2014 from http://www.whitehouse.gov

Morath, E. (2014, August 31). Labor Day turns attention back to minimum-wage debate. The Wall Street Journal. Retrieved 12 November 2014 from http://blogs.wsj.com

Neumark, D. & Wascher, W. L. (2008). Minimum wages. Cambridge, MA: Massachusetts Institute of Technology.

Puzzanghera, J. & Hennessey, K. B. (2014, February 18). Report on federal minimum Wage of $10.10 heats up debate in Congress. Los Angeles Times. Retrieved 11 November 2014 from http://www.latimes.com

United States Department of Labor. (2014). Minimum wage. Retrieved 11 November 2014 from http://www.dol.gov

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Money Matters: Pros and cons to raising the minimum wage

By lindsey certonio - special to the daily herald | apr 13, 2024.

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Did you know the last time the minimum wage was increased was in 2009? That was when the minimum wage was increased to $7.25 from $6.55 .

Since 2007, the United States has seen significant transformations when it comes to how Americans spend their money, and what on. As a whole, we are spending more money on housing, transportation and food. The question is, does our minimum wage need to change to reflect and support our new economic lifestyles? Let’s delve into the cons and pros of increasing the minimum wage.

While it may seem there is a straightforward solution to poverty, there are several reasons the government and a portion of the U.S. have held back on raising the minimum wage during the last 17 years. A higher minimum wage could affect small businesses, job opportunities and education.

Small businesses

A majority of businesses in the U.S. are considered small businesses . Starting and maintaining a business with minimal investments can be difficult. Small businesses are more likely to have higher production costs , making profit margins small. Increasing the minimum wage would add to the overhead cost of the business, resulting in many being forced to close due to a shortage in profit.

Loss of jobs

As a business, if you see one aspect that is eating up a large portion of your profit, the obvious answer would be to get rid of it, right? Exactly. That’s why raising the minimum wage may cause employers to start automating processes . For example, where you once saw cashiers at a grocery store, you now see self-checkout stations. This will eventually lead to fewer job opportunities.

Furthering your education after primary school has long been considered important to landing a career that brings satisfaction and provides a livable wage. Unfortunately, studies show that when the minimum wage is increased, fewer people pursue a degree. This could be because tuition increased or they are captivated by the initial higher earnings and less education time.

While the cons may seem to outweigh the pros right now, there are some benefits to raising the minimum wage. The positive impacts include income equality, consumer spending and job satisfaction.

Income equality

Income inequality is an important issue our country currently faces. The top 0.1% of Americans have control over more wealth than all of America’s middle class, making the divide between the wealthy and poor even bigger. Raising the minimum wage would aid in closing that gap by giving the lower class a boost to their income.

Consumer spending

Have you ever received a bonus from work and instantly thought of the fun vacation you could go on or the fancy dinner you could have that weekend at your favorite restaurant? Increasing the minimum wage would have a similar effect on Americans. A good portion of Americans’ income goes toward wants. So, if we are bringing home more money, chances are product demand will increase.

Job satisfaction

Who doesn’t love a little extra money added to their paycheck every week? By increasing the minimum wage, employees will feel a sense of pride and appreciation from their employers, causing employees to be more loyal and satisfied with their jobs.

Raising the minimum wage is a controversial subject because there are good arguments for both sides. Should we increase the minimum wage and see the gap between the wealthy and poor shrink, consumer spending multiply and more people satisfied with their jobs? Or should we leave it where it’s at due to possible small businesses going under, loss of jobs and fewer people pursuing an education? Now that you have a better look from both sides, what do you think?

Lindsey Certonio is a project manager at Fullcast, a Silicon Slopes-based, end-to-end RevOps platform that allows companies to design, manage and track the performance of their revenue-generating teams.

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It’s Economic Logic: Increasing the Minimum Wage Creates More Unemployment

Some economists believe that the increase in the minimum wage will boost unemployment, while other economists think otherwise. Hence, they believe that raising the minimum wage would raise the living standards of workers.

For example, in a study conducted in the 1990s, economists David Card and Alan Krueger  examined a minimum-wage rise in New Jersey by comparing fast-food restaurants there and in an adjacent part of Pennsylvania, finding no impact on employment. Other economists, however,  found that the increase in minimum wages increased employment . Given the contradictory results, is there an alternative approach to decide whether an increase in the minimum wage will result in an increase or reduction in employment?

Can Historical Data Inform Us on How the Economy Works?

Note that the so-called data that analysts are looking at is a display of historical information.

According to  Ludwig von Mises , “History cannot teach us any general rule, principle, or law. There is no means to abstract from a historical experience a posteriori any theories or theorems concerning human conduct and policies.”

Also, in The Ultimate Foundation of Economic Science ,  Mises argued ,

What we can “observe” is always only complex phenomena. What economic history, observation, or experience can tell us is facts like these: Over a definite period of the past the miner John in the coal mines of the X company in the village of Y earned p dollars for a working day of n hours. There is no way that would lead from the assemblage of such and similar data to any theory concerning the factors determining the height of wage rates.

Furthermore, “The historian does not simply let the events speak for themselves. He arranges them from the aspect of the ideas underlying the formation of the general notions he uses in their presentation. He does not report facts as they happened, but only relevant facts.”

Contrary to the natural sciences, facts in economics cannot be isolated and broken into their simple elements. The realities of economics are complex historical facts that have emerged from many causal factors.

In the natural sciences, a scientist can isolate facts but not know the laws that govern them. All that he can do is hypothesize regarding the “true law” that governs the behavior of the particles identified. He can never be certain, however, regarding the “true” laws of nature. On this Murray Rothbard  wrote :

The laws may only be hypothecated. Their validity can only be determined by logically deducing consequents from them, which can be verified by appeal to the laboratory facts. Even if the laws explain the facts, however, and their inferences are consistent with them, the laws of physics can never be absolutely established. For some other law may prove more elegant or capable of explaining a wider range of facts. In physics, therefore, postulated explanations have to be hypothecated in such a way that they or their consequents can be empirically tested. Even then, the laws are only tentatively rather than absolutely valid.

In economics, however, we do not need to hypothesize, for in economics we can ascertain the essence and the meaning of people’s conduct. For instance, one can observe that people are engaged in activities, such as manual work, driving cars, walking on the street or dining in restaurants. All these actions are purposeful.

Furthermore, we can establish their meaning. For example, manual work may be a means to earn money, enabling people to achieve various goals like buying food or clothing. Dining in a restaurant can be a means of establishing business relationships, while driving a car will allow one to reach a particular destination.

People operate within a framework of means and ends; they use various means to secure ends. We can also establish from the above that people’s actions are conscious and purposeful.

The knowledge that human action is conscious and purposeful is certain and not tentative. Anyone who objects contradicts himself for he is engaged in a purposeful and conscious action to argue that human actions are not conscious and purposeful .

The conclusions derived from this knowledge of conscious and purposeful action are valid as well. The theory that human action is conscious and purposeful stands on its own regardless of what data might show and does not require statistical verification.

Contrary to natural sciences, we don’t hypothesize in economics, which means we do not have to set a hypothesis and then test it. For instance, we know that all other things being equal, an increase in the demand for bread will result in an increase in its price. We do not require statistical verification for it to be true.

Minimum Wage and Unemployment

Given that everyone’s ultimate goal is improving their own well-being, a businessperson is unlikely to pay a worker more than the value of the product that the worker generates. If a worker generates per hour a value of ten dollars for the business, then the businessperson will not pay more than this amount. Therefore, if the minimum wage is set at fifteen dollars per hour while the worker can only generate a value of ten dollars per hour, the business under the law would be forced to pay a worker above that worker’s value to the company.

Consequently, in such a scenario, the business would be forced to lay off the worker since employing the worker for fifteen dollars per hour is going to undermine the firm’s profitability. It is only through the increase in capital goods that labor could become more productive and earn a higher hourly wage. Thus, one can see that a policy of raising the minimum wage could backfire and likely result in more unemployed individuals.

There is no need for statistical studies based on complex mathematics to determine that an increase in the minimum wage will result in an increase in unemployment. All that is required is a logical discussion that most human beings could follow.

Contrary to the popular way of thinking, we do not test a theory in respect to whether it corresponds to the data, but on the contrary, we assess the data by means of a theory. There is no need for statistical verification to establish the effect of the increase in the minimum wage on employment. A simple logical analysis shows that an increase in the minimum wage will increase unemployment.

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Home — Essay Samples — Economics — Minimum Wage — Argumentative Essay On Minimum Wage

Argumentative Essay on Minimum Wage

• Categories: Income Inequality Minimum Wage

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Published: Mar 5, 2024

Words: 984 | Pages: 2 | 5 min read

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