The Minimum Wage Debate: Exploring the Pros and Cons

Categories: Raising Minimum Wage

Minimum wage, the legally mandated lowest wage, serves as the entry point for employees into the job market, offering them the opportunity to advance within a company and eventually secure higher pay. In the United States, the average minimum wage typically ranges between $7.25 and $9.00 ( While this wage may barely sustain a family of three, the question arises: what if America were to raise it? Such a move would elicit cheers from employees and jeers from business owners. In this essay, we will examine the advantages and disadvantages of increasing the federal minimum wage.

The Case for Raising the Minimum Wage

Supporters of an increase in the minimum wage, often referred to as the "pros," cite several compelling reasons for their stance. The Congressional Budget Office report provides valuable insights into this perspective. According to the Chicago Tribune, "President Barack Obama identified raising the minimum wage as a key way to address the income gap in America. For proponents, the report estimates that 16.

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5 million low-wage workers could see an increase in their weekly earnings, and 900,000 people could rise above the poverty line" (Chicago Tribune, February 2014).

Furthermore, proponents argue that raising the minimum wage injects more money into the economy, benefiting not only low-wage workers but also businesses. As points out, "Raising the minimum wage means minimum wage workers have more money to expend, which in turn ripples throughout the economy as these employees are able to spend more." Additionally, an increase in the minimum wage can lead to more job opportunities, reduced expenses for social programs, decreased turnover rates, and controlled inflation.

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The Case Against Raising the Minimum Wage

On the flip side, opponents of raising the minimum wage, often referred to as the "cons," present valid arguments based on the Federal Reserve Bank of Chicago study. According to the study, "A 10 percent increase in the minimum wage lowers low-skill employment by 2 to 4 percent and total restaurant employment by 1 to 3 percent. Alternatively, instead of hiring fewer employees, companies may outsource jobs to countries where labor costs are significantly lower than $10.10 per hour, resulting in fewer job opportunities for Americans" (

Moreover, the cons of increasing the minimum wage extend to minority communities. As highlights, "For every 10 percent increase in the minimum wage, estimates show employment may fall as much as 6.6 percent for young black and Hispanic teens aged 16 to 19." Additionally, concerns arise regarding potential layoffs, price hikes, intensified competition, and inconsistent application of minimum wage standards.

The Complex Reality

As we navigate the intricacies of the minimum wage debate, it is essential to recognize that both sides offer valid arguments. It is not a simple matter of choosing one over the other. The reality is far more nuanced.

While proponents argue that raising the minimum wage can bridge income disparities and uplift millions of low-wage workers from poverty, opponents express concerns about potential job losses and the outsourcing of positions to countries with lower labor costs. These fears are not unfounded, as the Federal Reserve Bank of Chicago study suggests a negative impact on low-skill employment and overall employment in certain sectors.

Moreover, the minimum wage debate extends beyond economic considerations. It is a complex issue with social and political dimensions. Supporters contend that it is a crucial step in addressing income inequality, while opponents stress the potential adverse effects on businesses and the overall economy.

It is also important to note that the effectiveness of raising the minimum wage can vary depending on specific circumstances and local economic conditions. While some areas may benefit from an increase, others may face more significant challenges.

The Role of Minimum Wage in Poverty Reduction

One argument against raising the minimum wage is the notion that creating more job opportunities for those in need is a more effective strategy for reducing the national poverty rate. While raising the minimum wage can undoubtedly provide much-needed relief to low-wage workers, it may not address the root causes of poverty. Research indicates that a significant portion of those living in poverty do not have full-time employment or do not work enough hours to support their families (

However, proponents argue that raising the minimum wage can still play a vital role in poverty reduction, particularly for those who rely on low-wage jobs. It can provide immediate relief and improve the financial well-being of millions of individuals and families.

The Fiscal Impact of Raising the Minimum Wage

Increasing the federal minimum wage also has fiscal implications. It directly affects the wages paid by the federal government to hourly employees and indirectly impacts the prices of goods and services purchased by the government. The additional costs incurred by the government would need to be covered by discretionary appropriations, which are currently capped through 2021 under existing law (

A Reflection

As I reflect on the debate surrounding the minimum wage, I find myself in a neutral position. The arguments on both sides are compelling and have merit. While conducting research for this paper, I encountered conflicting information, which only served to highlight the complexity of the issue.

For instance, one source advocated for raising the minimum wage as a means to create jobs, while another source in the same paragraph argued that it could lead to layoffs. The contrasting viewpoints underscore the intricacies of the minimum wage debate.

In light of this complexity, I suggest that a trial approach may be beneficial. By incrementally raising the minimum wage and closely monitoring its effects, policymakers can assess its impact on employment, businesses, and the overall economy. This approach allows for adaptability and responsiveness to changing circumstances.

America's approach to economic matters often reflects a degree of indecision, and this issue is no exception. It is essential to consider the diverse perspectives of consumers, business owners, and policymakers. While I currently lean towards supporting an increase in the minimum wage, I remain open to the possibility of reassessment in the future, especially if I were to become a business owner myself.


As I conclude this exploration of the minimum wage debate, I acknowledge the importance of informed and balanced decision-making. The minimum wage is a multifaceted issue that impacts individuals, families, businesses, and the broader economy. While there may be no definitive answer, a thoughtful and evidence-based approach to policymaking is essential to address the complex challenges surrounding this contentious topic.

Updated: Oct 31, 2023
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The Minimum Wage Debate: Exploring the Pros and Cons. (2021, Dec 13). Retrieved from

The Minimum Wage Debate: Exploring the Pros and Cons essay
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