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What Are the Pros and Cons of Raising the Minimum Wage?

Categories Minimum Wage, Minimum Wage Increase, Raising Minimum Wage

Essay, Pages 4 (928 words)

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Essay, Pages 4 (928 words)

The topic which was selected is the minimum wage. My position is that the minimum wage should be raised. The current federal minimum wage is too low and not sustainable for a majority of the US citizens.

The premises that support my position are “raising the minimum wage would increase economic activity and spur job growth, increasing the minimum wage would reduce poverty and a higher minimum wage would reduce government welfare spending.”

The premise that raising the minimum wage would increase economic activity and spur economic growth was selected because the economy would be highly boosted due to an increase in the GDP of the country.

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The GDP would increase because households would spend more money, and this would lead to the creation of jobs (Card et al, 2013). If there are more jobs for citizens, more people will be able to contribute to economic growth through the jobs they do.

The pro that increasing the minimum wage would reduce poverty was also selected because most people live below the poverty line because of the low minimum wage.

The low minimum wage enhances poverty since most people are unable to afford even the low standards of living (Card et al, 2013). If the minimum wage was increased, a lot of people would be driven out of poverty, especially the elderly.

The third premise, \”a higher minimum wage would reduce government welfare spending\” was selected because the low-income earners would be less likely to depend on the government for their welfare. A higher minimum wage would ensure that everyone has enough money to support himself/herself on welfare (Gramlich et al, 2016).

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The government would, therefore, not need to fund any welfare programs and would save that money for something else.

The three premises opposing my position are, “increasing the minimum wage would force businesses to lay off employees and raise unemployment levels, raising the minimum wage would increase poverty and a minimum wage increase would hurt businesses and force companies to close.”

The helpful thing in the reason that increasing the minimum wage would force businesses to lay off employees and raise unemployment levels is that businesses would pay fewer employees and save money. If I believed in this view, I would notice that the minimum wage should not be increased. This idea might be true if businesses lack enough funds to pay employees the required minimum wage (Gramlich et al, 2016).

The most important thing in the view that raising the minimum wage would increase poverty is that employers would decrease the working hours and lower employment levels. Although the minimum wage would increase, there would be a decline in income since not all people would be employed, and those employed would not be contented with their jobs.

If I believed in the view that raising the minimum wage would increase poverty, I would notice that there would be an overall decline in the earned income due to the employment declines. I would also notice that the minimum wage should not be increased since it would heighten the costs of production. If production costs are high, the price of goods increases, therefore, purchasing power reduces (Maloney et al, 2010).
This idea that higher minimum wages increase poverty levels would be true when there are higher levels of unemployment. When many people are poor, it would mean that they have been unable to find jobs due to the decrease in levels of employment as employers would be forced to comply with the minimum wage requirement (Maloney et al, 2010). The idea would also be true when lower quantities of goods are produced by manufacturing companies due to the decrease in demand, causing them to lay-off some employees.

The interesting thing about the premise that a minimum wage increase would hurt businesses and force companies to close is that there would be a reduction in the number of companies hence a decrease in the number of employment opportunities available. Businesses would be forced to pay higher wages to their workers, which they might fail to afford (Mincer, 2016).

If I believed in this view, I would notice the negative impact of a decrease in the number of businesses caused by an increase in the minimum wage. The closing companies would also let out a lot of workers. The stores which are yet to open would also fail to open due to the fear of paying high wages to the workers (Mincer, 2016). This idea might be true when businesses are small scale and lack enough funds to stick to the high minimum wages.

The two types of biases likely experienced during the evaluation of the reasons are selection bias and confirmation bias. Selection bias was experienced when choosing the reasons proposed and proposed my point of view (Mincer, 2016). Confirmation bias was also experienced because I chose my own point of view based on what I already knew.

The effects of my own enculturation and group identification are that the reasons chose and the point of view will be influenced by my culture and the group with which I identify myself with. The point of view might also not be correct due to such influences. Group identification might also prevent me from considering other viewpoints which might be correct.

After playing the believing game, my thinking about the topic has changed. Although it is good to increase the minimum wage, it is also advisable to check the cons associated with increasing the minimum wage and weigh the cons versus the pros in order to determine which view to take.

Cite this essay

What Are the Pros and Cons of Raising the Minimum Wage?. (2020, Nov 12). Retrieved from https://studymoose.com/what-are-the-pros-and-cons-of-raising-the-minimum-wage-essay

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