Why Raising the Federal Minimum Wage is Beneficial?

Having to work a minimum wage paying job drastically affects an individual’s economic status and morale, however, this issue is often overlooked. Today, in the United States, wages in comparison to the cost of living are not realistic. The cost of living is increasing while work wages are staying the same. The cost of housing, goods, gas, and even college tuition is on the rise, yet the government rarely addresses this issue. Although the United States is considered the world’s wealthiest country, millions of workers continue to earn poverty-level wages, putting themselves and their families at lifestyle risks.

Earning poverty-level wages raise health and education concerns including poor nutrition, , unsafe and inadequate housing, lack of access to medical care, and most important challenges to children’s learning abilities and decreased success in school (Aft). Over the past eight years, the economy has rebounded with the longest streak of job growth in history, yet millions of people continue to work for the federal minimum of .

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25 an hour — without a pay raise in sight (Lu).

As indicated by an investigation directed by Arin Dube, an expansion from $7.25 to only $8 in the government the lowest pay permitted by law would diminish neediness levels by 2.4%. Following these numbers, raising the lowest pay permitted by law to $10 would lessen the quantity of Americans living in neediness by 4.6 million. A bring up in the government the lowest pay permitted by law would likewise build the quantity of Americans living in the tenth percentile level of pay (Udine).

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Although working for 40 hours a week should be enough to cover the cost of living, sadly that is not the case. With a starvation wage of $7.25 an hour, many individuals are forced to work long, hard hours and even pick up a second job to make ends meet. Making minimum wage with two jobs sometimes still isn’t enough especially after federal taxes, social security, and Medicare are deducted. Many minimum-wage workers rely on public assistance programs to afford their basic needs. A recent report suggests that if the minimum wage was increased by only 10 percent, it would reduce the food stamp program enrollment between 2.4 and 3.2 percent (Anderson). The Economic Policy Institute assesses that the Raise the Wage Act, which would raise the government the lowest pay permitted by law to $12 every hour by 2020, would result in wage increments totaling more than $79 billion for about 35 million specialists in networks the nation over. Raising the lowest pay permitted by law fortifies the economy without expanding citizen costs. U.S. Census Bureau data show that for 2015, median household income rose 5.2 percent, up to around $56,500, the largest single-year increase since record-keeping began in 1967 (Bushey). Jobs should serve as leverage to lift individuals out of poverty not keep them in it. If the minimum wage stays the same, more individuals will remain in poverty and on public assistance.

Increasing the minimum wage will positively impact work ethic and productivity within businesses. Studies by leading economists, including Nobel laureate George Akerlof of Georgetown University, found that employee morale and work ethic increase when employees believe they are paid a fair wage (Scott). If a business is paying workers minimum wage, then that’s what their work ethics will reflect. Also, if individuals are being paid fairly they are less likely to leave a job which makes for a lower unemployment rate. In 2003, a study done by Berkley showed that staff turnover is much lower when the hourly wages are higher (Anderson). In the study, the San Francisco Airport raised its employees’ hourly wage from $6.45 to $10 per hour by creating a living wage policy (Anderson).

Minimum wage has a significant impact economically and socially. A study by Doug Hall and David Cooper estimated that a $2.55 increase in the minimum wage would increase the earnings of low-wage workers by $40 billion and result in a significant increase in GDP and employment (Scott). Putting money in the hands of people who will spend it helps the growth of the economy (Cap). When workers are making minimum wage, they are less likely to spend money on materialistic things which aren’t good for businesses or the economy. Knowing they will be breaking their pockets if they purchase certain goods or services will discourage them from spending. Minimum wage workers often have social barriers and miss out on social events and time spent with peers. No individual, especially one who is employed, should have to suffer socially because they can’t afford certain things.

On another note, some Americans see increasing the federal minimum wage as a bad idea. Once a new minimum wage law is passed, the cost of producing goods made by unskilled labor will increase (Flows). This means that fewer products will be made and the price of the goods will increase. Once the price of the product increases fewer will be made resulting in fewer workers being hired. Some individuals say that increased labor cost will result in companies relying more heavily on machines versus workers. This isn’t necessarily true since machines malfunction often. Workers will be needed to keep those machines up and running to keep producing products. The assumption that an increased minimum wage will result in job losses is far from the truth and is a simple closed-minded statement. Leading economists have found that increases in the minimum wage have no discernible effect on employment, including employment in high-impact sectors like restaurants and retail (Scott). There is no evidence that suggests that raising the minimum wage would end or reduce jobs.

The Economic Policy Institute assesses that the Raise the Wage Act, which would raise the government the lowest pay permitted by law to $12 every hour by 2020, would result in wage increments totaling more than $79 billion for about 35 million specialists in networks the nation over. Raising the lowest pay permitted by law fortifies the economy without expanding citizen costs. A minimum wage increase would be a win-win situation for both workers and the United States economy. Raising the minimum wage will allow workers and families to keep up with the increasing prices of the cost of living in the United States (Lu). The economy benefits because a minimum wage increase means more money in the pockets of consumers who purchase from businesses that keep the economy functioning. Businesses will be more successful because their employees will stay longer knowing they are being paid fairly. In fact, business executives support a higher minimum wage. A survey conducted by Republican pollster Frank Luntz that was leaked to the Washington Post in April found that 80 percent of business executives supported increasing the minimum wage (Scott). When employees stay longer on jobs businesses spend less time and money in training and hiring new employees. This will cut down on the unemployment rate in the U.S. Most importantly a higher minimum wage will help those who are considered low-income practice self-sufficiency by helping to reduce the reliance on government assistance programs. A minimum wage increase would create more fair wealth distribution throughout the economy.

Most importantly there should be a minimum wage increase because the majority of the American people are for it. According to a 2015 poll done by the Hart Research Associates, 75% of Americans are in support of a federal minimum wage rate increase and are calling for a higher minimum wage (Udine).

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Why Raising the Federal Minimum Wage is Beneficial?. (2021, Mar 09). Retrieved from https://studymoose.com/why-raising-the-federal-minimum-wage-is-beneficial-essay

Why Raising the Federal Minimum Wage is Beneficial?

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