Minimum Wage Arguments

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The Fight on Minimum Wage Minimum wage. The lowest amount of money regulated by the government in which businesses must pay their employees. Minimum wage is slowly on the rise, with dramatic proposals in the last few months. However the raise in minimum wage could cause great harm to the United States economy. The minimum wage should not be raised because it would increase the price for the consumer, it could harm the small businesses of America, and it could cause millions of minimum wage workers to be laid off. If the minimum wage were to increase, consumers could see a rise in prices in their products. A majority of minimum wage workers are in a high competitive market, where the companies make smaller profit. In order for companies to…show more content…
In order to make a profit off of a product a company must make more than they are spending. So when it comes to spending on wages companies cannot be paying them more than their income. If companies were forced to raise the minimum wage many of them would find themselves laying off workers, especially those of the lower skilled employees. As much as a 3% reduction of low skilled workers can be projected with an increase of 10% in the minimum wage (Negative Effects). An American Apparel store in Los Angeles had to lay off 500 workers because of the recent city increase to $15 an hour (Sherk). This number is shocking, and American Apparel responded saying, they cannot start pay at $15, instead wages should increase as the amount of sales increases. This makes since, for a company cannot spend money they are not receiving. After extensive research and studies, economists have concluded that for every 10% increase in minimum wage, the country could see a 7% decrease in unemployment (Sherk). This could cost the United States over 7 million jobs. The relationship between unemployment and minimum wage can best be seen in American Somoa. Here they are required to have a starting wage of $20. After two years of its implication unemployment rate went from 5% to nearly 36% (Sherk). This shows how minimum wage greatly affects employers, and employees alike, because it causes businesses…show more content…
It has been shown that when employers are required to pay their workers more it will force many to put off hiring, cut back the hours, and even lay off employees, just to keep labor costs down. A brewing company in North Carolina pays all of their 44 employees the minimum wage, but the owner estimates that with an increase in the minimum wage their company would have costs of up $40,000 (Quittner). Since costs would increase, small companies would be trying to find ways to compensate that pay. First they would have to cut back on the number of hours someone works, because they would not be able to keep paying the workers to be at work. It is necessary to balance their intake and outtake on money. In a study at New York University it is shown that the lower rated restaurants easily went out of business with the increase in minimum wage
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