Minimum Wage

Written by: Karissa Sime 

Anyone who has tried to get a job recently knows that more and more companies and businesses are trying to pay minimum wage so they don’t have to spend as much money. Obviously to many people’s agreement, the government has been talking about potentially raising minimum wage to $9 per hour. The reason they are doing this is because they believe that if they raise the minimum wage one or two dollars, then more young people will be eager to get a job because they think they are getting paid more, thus causing more jobs being created and then making more money, which would potentially stimulate the economy. The reality of this however is that the increase of minimum wage could not help but harm the economy. From the article Hidden Costs of Minnimum Wage Casey B. Mulligan said “Moreover, elevating the wage $2 above the market does more than twice the damage of elevating the wage $1 above the market” . The reason that this would harm the economy more is because the “damage would far outweigh the benefits. Instead of raising the taxes so much that it then outweighs the benefits of raising the minnimum wage rate, we should lower the minnimum wage rate so that the benefits outweigh the damage by far more.  Market wages normally tend to increase over time with inflation and as workers become more productive. “As long as the minimum wage is a fixed dollar amount, the tendency for market wages to increase over time means that economic damage from the minimum wage is shrinking.” What Casey B. Mulligan is saying here is that as long as we continue to keep the minimum wage at a steady rate, the economy will not have to worry as much about the minimum wage having a negative effect on the economy. 

                A huge problem that has been seen recently is that workers who do not have the skills as most others and who are bairly skimming by with the requirements are facing a downfall in their wages. “The least-skilled workers are seeing their wages fall over time, largely because they are out of work and failing to acquire the skills that come with working.” One of the new ideas that has been talked about more and more recently is the idea of not having a minimum wage law. Many people have said the same thing that Casey B. Mulligan talked about in his article. This is what he said. “The minimum wage law restricts flexibility on cash wages, by establishing a floor, but makes no rule on fringe benefits.”  Having flexibility on cash wages based on what kind of education or how qualified a person is for the job would help keep things fair but still would not get rid of the fringe benefits which are extra benefits that supplement an employee’s  salary. Overall, the problems with minimum wage are that we can’t decide on where the perfect place is so that we will still be gaining from the benefits but will still be making enough money.