Minimum Wage Increase Essay Essay
Minimum Wage Increase Essay
Most people would agree that raising the minimum wage sounds like a good idea, but arguments arise concerning if this increase would benefit the economy. Jared Bernstein believes that a minimum wage increase would positively affect the American economy. He argues that the economy is driven by consumer spending and lowincome workers are very likely to spend their extra earned money. On the contrary, Douglas HoltzEakin strives to make the point that raising the minimum wage would not be beneficial to the economy. He argues that there would be no reduction in poverty because only a small percent of minimum wage workers are in poverty, while most are unemployed. An examination of raising the minimum wage will reveal why it will benefit American society. According to Jared Bernstein raising the minimum wage would help. Bernstine suggests that the American economy is made up of 70 percent consumer spending. He argues that an extra dollar earned by a wealthy person is less likely to be spent than an extra dollar earned by a lowincome person.
In addition Bernstein points out that this leads to the lowincome worker being much more likely to consume their extra dollar of earnings. Similarly one might argue that a minimum wage increase that directly raises the pay of a relatively small share of the workforce by a small amount is unlikely to be a big deal. Raising the minimum wage is a growth strategy and should be used to try to revive our economy. The wage increase would help families struggling on minimum wage salaries. These families would see these new earni ngs as a chance to spend on new things and will slightly help macroeconomic growth. Helping the economy on the margin while also helping these families make ends meet. One should conclude that raising the minimum wage will help families in need and in terms help the economy. According to Douglas HoltzEakin Raising the federal minimum wage will neither reduce poverty nor boost growth. HoltzEakin suggests that increasing the minimum wage would ensure that millions of Americans got raises that they would presumably turn right around and spend. He argues that unfortunately the money for a raise has to come out of the wallet of another American.
In addition HoltzEakin points out that the minimum wage hike for one lowwage worker comes directly out of the pocket of another. In contrast one might suggest that the wage increase is neither antipoverty nor stimulus. According to Holtzs article companies may not be able to hire as many workers if the wage is increased. The money may not come directly from another working americans pocket but it has to come from somewhere. Businesses may suffer from the increase. Some businesses may not even be able to hire as many employees as necessary, taking away jobs. One should conclude that increasing the wage may harm other americans not directly affected by the increase. According to Jared bernstein the moderate increases in the minimum wage boost the earnings of most lowwage workers without leading to large employment losses. He argues that The increase favored by the president and congressional Democrats, would place the real value of the wage floor back where it was in the late 1960s.
In addition Bernstein suggests that this increase would directly affect about 13 percent of the workforce. He argues a vast majority of low wage families would benefit from the increase. Similarly one might suggest that some families struggling to make ends meet have 2 or 3 minimum wage jobs. These families with multiple minimum wage jobs will greatly benefit from the increase. This research does not put into account that many families struggling on minimum wage have multiple minimum wage jobs. Now these families would have extra earnings to make ends meet and stimulate the economy.
Since minimum wage workers are more likely to spend their extra dollars,the american economy will benefit from extra consumer spending. One should conclude that raising the minimum wage would help lower class families who depend on minimum wage. According to Douglas HoltzEakin the minimum wage is a poor tool to fight poverty because it does not target those in poverty. HoltzEakin suggests that only 2 percent of workers earn the minimum wage, and only 20 percent of those are in poverty. He argues that the reality is that the dividing line between being poor and being nonpoor is having a job. In addition HoltzEakin points out that only 7 percent of those who have a job are in poverty, while more than 27.5 percent of those without jobs are poor.