Income Inequality Essay
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Income inequality in America has become a big issue, one that many of us hear every day; whether on the news or from our parents. But normally, we don’t hear the actual phrase used. We hear things like “the top two percent,” or, the “rich vs. the poor.” So, what is income inequality? Income inequality is defined as the difference between individuals or populations in the distribution of their assets, wealth, or income.
So, with that in mind, why would anyone be against raising a minimum wage? At first glance, the plan does seem to be an intelligent fix to a problem that’s stayed dormant for quite a while.
Raising the minimum wage drastically from where it was in 2009 to now would be a blunt and possibly inefficient way of continuing to attempt to give the poor a better way of life. There is one simple fact that many people simply don’t look at: there are more than one group of people working for minimum wage.
There is a myriad of people working for the federal 7.50, from teenagers on their first jobs to older people with second jobs. Jonathon Guryan, an economist at Northwestern University and a neutral observer of the wage debate, said that “It’s not helping as many or as large a portion of the labor market as you probably would like.”
This being said, the workers that will benefit from a minimum wage increase would be so diverse that the group of people we are aiming to help, the poor and desperate, wouldn’t be getting all the help. Now, what of the small businesses and family companies that can hardly handle the current minimum wage? Well, they’d be taking a hit too if a drastic increase such as this were to hit. Businesses that make less money than others in their profits per year are expected to have to cut down on their expenses and lay off their workforce in order to compensate for the loss of funds. So, while the minimum wage would benefit the people in the business lucky enough to not be laid off, those who were fired could be the very people we were attempting to help. Unfortunately, this could mean that a large part of the workforce that handles manual labor could be out of the job. Other businesses would not even be that lucky.
There are much better ways to fight income inequality than just simply raising the federal minimum wage. It’s a very black and white argument for a topic that is not so black and white. To better improve our income equality, and therefore lift people out of poverty, we could be putting more funding into things like education, food stamps and the Earned Income Tax Credit (or the EITC), which is a refundable tax credit targeting people who make a low income. It would be a shame to not only miss a chance to reduce poverty now, but to forget that we’ll all be having this same conversation in a few years if we just raise the minimum wage. That being said, I don’t believe the federal minimum wage should be raised to $10.00 per hour.