However, in the long run, many employers will not be able to maintain to stay in business due to the significantly high wages. An increase in minimum wage would cause millions to lose their jobs and put them further in poverty. It would even make it harder for them to obtain jobs after the increase due to the increase of competition in the job market, and most importantly an increase in minimum wage would cause increase in the price level and it will reduce significantly consumption due to the lack of purchasing power that is cause by the higher inflation rate. The minimum wage should not increase because it is unsustainable economically. Another approach of help guide people out of poverty can be a push for an increase in education and knowledge capital instead of continuously increasing the minimum
As the workers earn more money, the product they provide increases in worth. Large companies such as McDonald’s and Walmart charge more money for the products consumers buy due to the increase in labor cost (Hawkins). The consumers will have more money from their minimum wage jobs, but products they wish to purchase will cost more leaving the workers at the same place they started. Due to The United States’ supply and demand economy by raising the minimum wage the dollar will decrease in value. Large corporations will not cut their company’s profit or their own paychecks to pay employees more.
Clearly, there are two sides to this situation, and people may argue these business owners currently have the upper hand as they are allowed to pay their workers as low as $7.25 an hour according to the federal minimum wage policy. That may be true, but it can simply increase if these workers revolt against these business magnates by not working forcing them to increase their salaries. It may cause them not to make money for a few weeks during these riots, but would benefit them in the long run. The essence is, Americans should increase the minimum wage and that it should increase because it would prevent workers living under minimum wage from changing their lifestyle to adapt to the working conditions and would decrease the overall poverty in the
01 Mar. 2016. The American Action Forum believes that raising the minimum wage can do more harm than good and hurt the people it’s supposed to help. Job loss in the millions would happen if the wage was raised from $7.25 to $15. People in poverty before the increase would have trouble finding jobs because companies would have to have less positions to counter the wage raise.
Others are that, it might hurt small businesses and force companies to close, this also means it would lead to inflation by raising the prices of consumer goods anywhere from 4-20%,. Teens and adults would be cut off the working force which really affects because according to Pew Research Centers, teens and adults make up 50.4% of the workforce on minimum wages. And lastly, companies might feel forced to use robots as a replacement of employees if they cannot afford to pay for low skilled employees and also to avoid
If someone wants to make more money they should alter careers to a more difficult job that will pay more money. The concept that the National minimum wage needs to be elevated to $15 an hour hasn’t been completely considered because it would cause inflation for the economy; therefore, the lower class would still be functioning in poverty. A minimum wage job is low paying because it requires low skill; therefore the
The minimum wage has gone up significantly in the history of the United States, as the cost of living has gone up. People demand higher wages to overcome the higher prices of goods and services. On an economic and cultural perspective, we should not increase the minimum wage because it will lay-off workers that are not as skilled, which will make it harder to find employment, and it will cause the lower-classes to go into poverty. Looking at this debate through a cultural perspective shows the negative results of the government deciding to raise the minimum wage. Raising the minimum wage would not help out the poverty problem that we possess today.
Not only will increasing the minimum wage make it pricier for businesses to hire young, inexperienced workers, but it is also not stated in the constitution to allow such a thing for the government to handle. Boosting the minimum wage will not alleviate poverty, and there are plenty of alternatives to decrease the poverty rate. Also, by leaving the amount the minimum wage should be to the government and no the people. America is losing its freedom and changing its economic system. By increasing minimum wage, America would be hurting its people, not helping them.
Families as a whole will argue the point that an increase in minimum wages will allow families the abilities to put more food on their tables, while providing the base necessities need in the family. However, most analyses of the minimum wage focus on its unintended employment consequences. (Freeman, 1996) Some major companies have agreed to increase the minimum wages in some States, nevertheless, the amount that the wages have been increased by is not enough to get a family from beneath poverty. Proven the fact that job markets in some cases are not working in the best interest of their employees. It has been noted that tax cuts and other government cuts can benefit the employees while putting money in the major company’s pocket.
Furthermore, globalization also increases income inequality by favouring wealthy corporations as they have the resources to expand their businesses creating more profits. For instance, if a company moves production of a particular product to an economically disfavoured country, people in industrialised countries tend to lose their jobs, simultaneously creating job opportunities for the people in the developing country. Numerous individuals in this nation work for a menial pay contrasted with those in industrialized nations, henceforth, they frequently stay poor furthermore don't have adequate protection, for example, social and health insurance. While wealthy companies flourish, small businesses do not have the capital to grow globally and cannot compete in the market leading to a big gap in small business profits and big business profits. Also leading to a crowding after effect on small businesses and more income for the already wealthy corporations which exacerbates inequality between the poor and the rich.
I do not believe that it will be beneficial for the United States to pass a minimum wage policy that puts it over the poverty line. Basically, this will dive the prices of products up so companies can manage profits. Additionally, the demand for products will additionally drop because of the rise in prices. Since the demand for products will be dropping, this will lead to less money in the business owner’s packet, which can lead to job losses. Even though the minimum wage workers will have more money on pay day, the rise of goods will cause inflation, and they will still not be able to afford anything.
Yet we have to think about what the outcome would be to each scenario. According to William Dunkelberg, a writer for Forbes magazine, by raising minimum wage there could become less jobs than before. Though the people who have jobs would be making more money, smaller companies wouldn’t be able to pay for their employee’s, and would have to let people go. “Small businesses stay in business
They may save some money for a few weeks and distress producers, but eventually, they start consuming again. Consumption is inevitable. People also argue that by consuming less, stress is reduced. The issue with this is that as a producer’s stress level will dramatically increase, due to a lack of income. If producers are not able to produce goods for people, since they will have no money to do it (since people want to decrease spending), then people may lose high quality goods that are essential to living.
The New York Times states, “Employers do not automatically cope with a higher minimum wage by laying off workers or not hiring new ones. Instead they pay up out of savings from reduced labor turnover, by slower wage increases higher up the scale, modest price increases or other adjustments” (4). It would not make sense for businesses to raise prices for consumers because the possibility of losing sales is very real. That argument, that raising the minimum wage would hurt consumers, just furthers the negative sentiment people have towards this topic. Numerous studies have shown that employment increases from the state and federal level had an overall positive effect on employment (Whitaker et al.
Raising the minimum wage isn 't entirely beneficial. It could potentially lead to more unemployment as some businesses may reduce their number of employees or reduce their hours in order to offset the cost of paying a higher minimum wage. Some may also increase the prices of products or services offered. It can also possibly lead to a decreased interest in college education since minimum wage jobs are paid almost the same or can be more than what jobs requiring college education pay. On the bright side, there is greater purchasing power for workers with the revenue going back to businesses they patronize and products or services they avail of or purchase.