Brandon Zettlemoyer
Mr. Reuter
Economics
12 Jan 2016
Should we Raise the Minimum Wage?
One hotly debated topic in the United States is whether or not we should raise the federal minimum wage. We should raise the minimum wages as the current minimum wage is not sufficient for workers to support their families as the cost of living on the rise. The current federal minimum wage is $7.25 per hour which is $15,080 for a full-time worker. The value of the minimum wage has fallen over the past four decades. In 1968 the federal minimum wage was $1.60 per hour, which is approximately $10.90 in 2015 dollars.
Currently 89% of all people earning minimum wage are adults and usually are supporting families. Increasing the minimum wage is important as it will increase consumer purchasing power. This will help the economy as 70% of the U.S. economy is based off consumer spending. As people will be earning more money they will have an increased demand for goods and services as they now have more money to spend.
In comparison to other developed countries, the U.S. is behind when it comes to minimum wage. Many countries in Europe have set higher minimum wages and still have strong economies contrary to the argument that increasing minimum wage will do more harm than good. While increasing minimum wage will increase the cost for companies it will also increase the disposable income of the workers. The new income that workers have at their disposal will be spent back into the economy. Also two-thirds of all low-wage workers are employed by large companies rather than small businesses. These companies have large gross profits and are able to pay their employees more. Companies have also been able to pay their employees less over the years as the value of the minimum wage has not kept up with the increase in the cost of goods and services. Studies have also shown that increasing the pay that workers receive increase productivity and reduce worker turnover which will also help save companies money.
The original purpose of the federal minimum wage was to increase consumer purchasing power in order to help the economy during the Great Depression. By reducing poverty and allowing consumers to spend more money into the economy the minimum wage promoted growth and contributed to the economic recovery of the United States. This was shown again in 2009 when the minimum wage rose from $6.55 to $7.25 per hour as a method to combat the Great Recession. If raising the minimum wage really does more damage to the economy than good the government would not continue to raise it during hard economic times. Overall if a minimum wage that is gradually increased over time is implemented it will help reduce poverty, increase consumer spending, and help increase productivity of workers benefiting the economy as a whole.
Work Cited
Scheiber, Noam. "What a $15 Minimum Wage Would Mean for Your City." The New York Times. The New York Times, 12 Aug. 2015. Web. 12 Jan. 2016. http://www.nytimes.com/2015/08/13/upshot/what-a-15-minimum-wage-would-mean-for-your-city.html?_r=1
"Countries with Higher Wages than U.S." CNNMoney. Cable News Network. Web. 12 Jan. 2016. http://money.cnn.com/infographic/economy/countries-with-higher-wages-than-united-states/?iid=SF_River
"Employment and Business Effects of Minimum Wage Increases." Http://www.nelp.org. NELP. Web. 12 Jan. 2016. http://www.nelp.org/content/uploads/Minimum-Wage-Basics-Business-Effects.pdf
"Declining Value of the Federal Minimum Wage Is a Major Factor Driving Inequality." Economic Policy Institute. Web. 12 Jan. 2016.
The majority of people earning minimum wage are part time employees. Increasing minimum wage would have a very small effect on the economy because the people earning that salary are not working enough hours for it to have any major effect.
ReplyDeleteI feel like if the minimum wage is increased, all it would do is make the inflation of the United States rise up more. If you think about it, is if the minimum wage rises, they would have to raise the prices of everything else. Thus balancing back out and making people to want to raise it even higher. It would become a vicious circle and it would cause mass inflation just like what Germany experienced during WWII. If anything raise it to about 8.50 an hour just to match the minimum wages from the past years, but otherwise don't go higher than that, because that would mess up the economy of the US which we do not need at this point in time.
ReplyDeleteAlthough raising the minimum wage seems like a good idea at first, the benefits do not exceed the costs. Even though raising the minimum wage could increase consumer spending for some, I don't think it will reduce poverty by much, if at all nor will productivity increase. Majority of the people living in poverty either work part time or don't work at all, and with that being said, how will increasing the minimum wage help them if they aren't working? For people who work full time while earning minimum wage, I can see how this change would beneficial for them.
ReplyDeleteYou make a good argument but you have to consider things from the business's perspective. The business will maintain their margins. So if the cost of labor increases, two things can happen. Either they will find other ways to reduce costs, or raise their prices. This could mean layoffs or increased prices. Losing a job or having higher food costs certainly wouldn't help those who have families dependent on their minimum wages.
ReplyDeleteIn my opinion, raising minimum wage will not have a very large impact on our economy because although there may be some full time employees getting paid minimum wage, the majority are just part time workers. These part time workers are most likely not working constant hours that would provide them with a shortage or surplus of money to effect the economy.
ReplyDeleteI agree with you that raising the minimum wage would be a good thing. I think people are overthinking the negative effects and that raising the minimum wage by a few dollars will not make things massively expensive or cause massive layoffs. It will allow people that are earning minimum wage to at least support themselves. I think that you are right and that the minimum wage should be increased.
ReplyDeleteI understand that minimum wage hasn't been help up with inflation like everything else, but I always tend towards the argument that minimum wage is not meant to support a lot, such as an entire family as mentioned in the article. So while I do believe that we can afford to raise minimum wage, I believe that the raise should be as small as possible so as not to discourage workers with actual careers.
ReplyDeleteI agree we should raise the minimum wage but, also the people who are getting paid minimum wage are only working part-time jobs. So as I do agree with raising the minimum wage wouldn't have a very big impact on the economy because the people who are getting paid minimum wage are earning the minimum wage due to not working enough hours for raising minimum wage.
ReplyDeleteRaising the minimum wage sounds good in theory, however actually doing it could harm consumers more than they think. Although a majority of people earning minimum wage are older and need to support themselves, the only two options are raising the prices of products that will upset consumers, or the companies will have to lay off workers to still get the same amount of marginal profit. To please the consumers and keep prices low, the option for the companies is to increase the number of those unemployed which would lead to a decrease in consumer spending. It is a good idea and could work, it would just result in some companies making financial sacrifices.
ReplyDeleteThis a very controversial topic right now. It was very interesting to see how much the minimum wage is in other countries and that we are on the low end. I do not think it should be moved up, I believe the jobs that pay minimum wage are not for people to try to live off of. If you are trying to live off of minimum wage, it will be impossible bu someone should not make the same amount of money for flipping burgers as they do for a very laborious job.
ReplyDeleteI feel like raising the minimum wage wouldn't really solve a lot of problems. Yes it would be nice to make more an hour especially if you are a college student. However, for company's and businesses they would be losing money by paying their employees more. Causing either prices to rise or more people to get laid off.
ReplyDeleteYou make a good point when you say why would the government raise it in hard times if it wasn't good for the economy and government? I have been back and fourth on this topic and I feel it should be raised because people couldn't survive off of this pay, but then again this pay isn't and wasn't made for adults trying to support a family and such, therefore I'm still stuck on this topic.
ReplyDeleteOverall, this topic is debated frequently. And the statistics you use really help support the increase of the minimum wage. Especially considering the fact that 89% of minimum wages are earned by adults whom support families. I personally think that the minimum wage should be increased but the biggest problem to be factored into consideration of it is if companies will lay off employees to keep large profits still. But, McDonalds is a perfect example of raising the wage is still OK. However, some smaller businesses might lose some profits; granted a majority of small businesses pay much more than the minimum wage anyways.
ReplyDeleteWe should definitely not raise minimum wage, most people choose their first job at minimum wage and they know what they're getting paid. Most of them are in their 20's and living off of that because they chose to. If these people went to college and got a degree they could get an actual job that pays well above minimum wage. Half the time when you're at a fast food place when you order something they get it wrong half the time anyways, so in my opinion they don't even deserve it.
ReplyDeletePersonally, I feel that we should raise the minimum wage mainly, because of what you said, people simply cannot live off of that little of money. In many cases we can say that minimum wage is fine where it is because we assume that the majority of those who work for minimum wage are minors just trying to find a summer job to earn some money. This, however, is grievously misjudged because the fact is many citizens in the United States work for minimum wage as a part of their career and continue to live in poverty.
ReplyDeleteWe should definitely not raise minimum wage, most people choose their first job at minimum wage and they know what they're getting paid. Most of them are in their 20's and living off of that because they chose to. If these people went to college and got a degree they could get an actual job that pays well above minimum wage. Half the time when you're at a fast food place when you order something they get it wrong half the time anyways, so in my opinion they don't even deserve it.
ReplyDeleteIt is not a good idea to raise minimum wage because if we raised minimum wage, the cost of all the goods would raise also because the workers are getting paid more. Many of the people that earn minimum wage are not in dire need of more money they are working to get money for themselves so they can go and do what they want with the money. Most jobs that pay minimum wage are very simple jobs that don't require much work.
ReplyDeleteI think that raising the minimum wage would be a big mistake considering that there is not only small businesses who will need to cut jobs in order to stay a float because doubling their workers pay would be a massive hit, but there is also a number of large corporations who are not only moving jobs over seas, but resorting to automation. All of these contributing factors make it nearly impossible for raising the minimum wage to a family supporting level without seeing a record amount of jobs being lost. The 1930's was a much different time then it is now.
ReplyDeleteI both agree and disagree with raising minimum wage. I agree mainly because of all of the topics that your brought up; not all minimum wage jobs consist of people working in a fast food joint, a lot of them work hard for their minimal amount of money, and in some cases they deserve more than they are getting. One reason that I don't agree is the dollar power. By raising minimum wage, a company is going to have to raise all of the wages; simply because, minimum wage workers should not be making the same amount as a manager or someone higher up on the working spectrum. As all of those wages rise, prices in the economy will rise, meaning it will basically be the same as it is now (barely getting by) or the dollar power will go down and these people making minimum wage will be worse off.
ReplyDeleteI understand the pro's of raising minimum wage but I do not agree 100% with what you are saying. I believe that if minimum wage were to be raised it would do more harm than good. Although your research was able to prove that there would be pro's, you did not address the fact that if minimum wage is increased companies would most likely have to lay off workers to compensate for having to pay the workers more. In doing this, they are eliminating someones income by 100% I would rather be getting $7.25 than getting laid off. I think that you made very valid points but I do not agree.
ReplyDeleteI agree with the fact that they should raise the minimum wage, however, they should not raise it past $10.90 which is, like you said, the minimum wage from 1968 adjusted for inflation. If we put a minimum wage in place that is higher than that, companies might start to fail and inflation will rise faster. Companies won't be able to adjust to the constantly rising consts of goods and services and the higher pay for the employees. If people are only making minimum wage, they should not be trying to support a family. Caring for children are far more costly than even $10.90 would be able to support effectively. Also studies have shown that if the minimum wage was increased, companies would more than likely fire less educated individuals and invest in the more educated individuals already making a higher wage.
ReplyDeleteI think raising the minimum wage is something that should be done, it is totally unfair that there are people who work hard to earn a living and yet what they get payed is not enough. I understand the fear some people might have about raising the minimum wage but there is evidence of other countries that have a higher wage and also a strong economy.
ReplyDeleteI'm sure all of the people that work and make minimum wage would love the idea of minimum wage being increased but it wouldn't help with the poverty problem. The majority of the people that deal with poverty work part time or don't work at all. Raising minimum wage will not help the people who are not working so why increase the price and potentially tax the people who are working full time. Although the increase price in minimum wage could potentially help the people who are working full time and making minimum wage.
ReplyDeleteI don't think the answer to poverty is increasing the minimum wage. Although it may appeal to those who are currently making minimum wage it would only provide brief relief. Overall an increase in minimum wage would cause inflation in the costs of most goods so the standard of living associated with minimum wage would stay the same and would only cause those who are unemployed to become more impoverished as prices increase. Minimum wage should not be a living wage but merely a stepping stone in the workforce for teenagers and hard workers to get their foot in the door and move upwards.
ReplyDeleteMinimal wage is extremely low, and raising it will change the economy, but keeping it how it is is unreasonable living standards. Many people without a college degree have to settle for minimum wage and that's basically an unlivable state. I think minimum wage should depend on your age and effort put into the work. If you're giving it you're all and you have a family but no degree, you should get more than the minor working for a summer job.
ReplyDeleteUnfortunately I believe that raising the minimum range would hurt more than help. Because everything is connected business will either have to raise their prices, or cut employees. This would also hurt the small businesses. Some of these businesses can't afford the new wage. Although many minimum wage workers would love to have a pay raise, they fail to realize the possible consequences after.
ReplyDeleteIf minimum wage is heightened, businesses will most likely have to reduce their staff or raise prices of their products. If staff is reduced, the companies will have to reconstruct their marginal product of labor per person to make sure that each person is more efficient considering they are being paid more. Because of this, less people would be hired, causing a rise in unemployment. Otherwise, if products become more expensive at each company, it won't matter that those who make minimum wage make a little more because if everything is raised in price, it will follow the same income-spending ratio.
ReplyDeleteIf the minimum wage is increased it might seem great at first but it might just come back around in the long run. If all minimum wage workers are able to buy more things spending more money the companies selling those things will make more money and the rich will also get richer which might just drive inflation right back up and make it so that minimum wage isn't enough to support a family on again. Which isn't as bad as people say because minimum wage isn't designed for people who need to support a family it's simply some money for high school and college kids or just someone who wants a part time job for the extra cash.
ReplyDeleteAs much as the large companies could afford to pay higher wages, they won't. I'd be worried that people would start losing jobs because of the pay increases. So what I was thinking that for people that are full time the minimum wage could be increased because they are the ones most likely supporting families while people that work part time like high school student just trying earn some money on the side, the minimum wage would stay the same. The only issue is for the people that want to full time job but can't get one that are supporting a family. Otherwise I think this could help those supporting a family while not creating to too much job loss.
ReplyDeleteIf the minimum wage is raised there would only be negative consequences to this decision. Yes, I totally agree that minimum wage is not livable, but if it was raised all that would happen would inflation would increase making the price of things increase then it would basically have no change because they would be right back where they started. Raising it would be pretty much like an illusion making people think that they are being helped. Also what could happen is less people would be hired into lower skilled jobs and younger people would not be hired as often.
ReplyDeleteIf the economy decided to raise minimum wage it would negatively impact the economy. Even if we raised minimum wage to $15 an hour the purchasing power would be the same. After a raise in minimum wage all the companies would raise their prices to be able to make the same amount of profit, and would have a major impact on the small business. Small businesses would end up going out of business due to the fact most of them can't afford to pay $15 an hour and still make a profit. People always say to raise minimum wage because they want more money, when in reality raising minimum wage wouldn't do anything. Also minimum wage is meant for teenagers, not for someone supporting a family.
ReplyDeleteMinimum wage shouldn't be raised. There's a reason it's called "minimum wage." It's a stepping stone in your career path, it's not something you should be at for the rest of your life. Minimum wage paying jobs are for younger people who are in high school, or college. Its a way people who don't need big income make a little extra spending money for whatever they want/need. Also if minimum wage is increased no jobs will be offered, and companies will have to cut the amount of employee's they have. Overall I stand on keeping minimum wage at what it is.
ReplyDeleteWhile you made some great points, it should clarify what the minimum wage should we raised to. While I might support a raise in the minimum wage to $8.50, I don't support a raise in the minimum wage to $10. A minimum wage job isn't supposed to act as a full time job. People are supposed to be able to start at minimum wage jobs then work up in the company. Also, if the minimum wage was raised, a lot of companies would need to let people go because they couldn't afford to keep the workers and pay them higher. Because people would get fired, this would raise the unemployment level and people would not have more money in their pockets, thus it would not increase consumer purchasing power.
ReplyDeleteI really like this post because I have been so confused to why raising minimum wage. If we raised the price then stocks and priced goods go up correct? i always believed if that happened then we wouldn't be making a change because if we get more money we spend more money which doesn't put much money in anyone's pocket if it's how it is now. People will go out and buy better things because they have money but if that helps the government then I'm all for it but then again I think it's outrageous to go from 7.25 to 15 an hour. i feel it should take it's time building up to that.
ReplyDeleteAs a part-time worker making a little more than minimum wage, raising the wage amount sounds like a good idea; however, this would slightly affect the prices of products. If the minimum wage was increased, inflation would occur causing consumers to become angry. In my opinion, raising the minimum wage wouldn't necessarily help with poverty and the amount one makes should really be based off of their living standards and age. One who is supporting a family with this wage should make more than a teenager who is just working to work.
ReplyDeleteI think society will reach a point where they have no other choice but to wage the minimum wage, too many people are living below the poverty line but if the minimum wage were to increase, several lives could be changed drastically. The minimum wage was suited for the standard of living over two decades ago, it is deemed fit for a change. Overall I felt you choose a very relevant, time worthy topic that related significantly to economics.
ReplyDeleteIt is crazy to think that 89% of workers earning minimum wage are adults supporting their families. You did have good, valid points about about minimum wage however I feel that raising it would just increase the price on others goods. As for those families trying to live off of minimum wage, that is their decision based on the resources they had. Minimum wage jobs are young adults to start getting into the work businesses. It isn't meant to be a full time job.
ReplyDeleteI think that this would have a huge impact on our economy. All the small business will suffer because they on't be able to afford their workers. I think that minimum wage is fair because they are a low entry job for mostly high school and college students. Also the prices for the consumers will also rise making low quality food cost more than it should. Therefore the wages should not rise with concern that it may hurt the economy more than help.
ReplyDeleteIt's interesting to see that so many people who receive minimum wage are adults who support families. Although a greater minimum wage would decrease the amount of workers demanded by companies, those who are able to work will be able to better support themselves and their family. I think that a greater minimum wage could be a good thing for our economy, and I'd definitely appreciate getting a bigger paycheck working in a summer job. I'd also like to point out, however, that an increase of minimum wage to something unreasonably high would cause more harm than good, where less workers get hired, and a higher cost of products produced by the workers.
ReplyDeleteThe purpose of having a lower minimum wage is to serve as an incentive for individuals to seek out higher education and advance in employment, and work for a higher wage. If minimum wage is high enough that someone can live comfortably on there would be no reason for them to want to improve, and work for a better pay. However, considering that many people do depend on minimum wage to support themselves and their family, it may be reasonable to increase the minimum wage enough to decrease the poverty rate. A slightly higher minimum wage may also encourage employees to work more efficiently and would in turn benefit the employer.
ReplyDeleteIf the minimum wage were to raise, it would cause conflicts within the business. However, the unemployment rate would decrease since more people would be more motive to get a job and get money since they would be getting paid more. In the short-run, businesses will experience hardships with cutting staff and losing profits, but in the long run, they will earn profits and the economy will be in the economy recovery stage. So outputs will be increasing and then the U.S will be at the same level with the other countries
ReplyDeleteGood discussions of the issue of whether or not to raise the minimum wage, the graphs and statistics you included in your discussion were helpful and well placed.
ReplyDeleteRaising the minimum wage may actually have the effect of putting an upwards pressure on all wages. Currently, many firms are incentivized to pay above the industry wage or minimum wage to incentivize workers to stay with their company and work harder, this phenomenon in known as efficiency wages. With an increase in the minimum wage, firms which pay their workers efficiency wages which are currently near the level the new minimum wage would be set at would actually have to increase the wages they pay their employees in order to maintain efficiency wages. So while the argument that a change in minimum wage would not really effect the income of many full time employees is accurate when only considering direct impact, in reality a minimum wage change would effect the wages many employees receive indirectly.
Although many people disagree with raising minimum wage, I think that it is a great idea if it is put into action correctly. Many other people will argue that it is just a starting job and you should work your way up; however, many people clearly can't work their way up because they can't afford college to get the promotion, they start a job that they never had the chance to be promoted in, or can no longer afford to move if they are even offered a better position. As you stated, 89% of minimum wage workers not only work for themselves, but for families they are trying to support. If big corporations aren't allowed to keep increasing the prices of goods and increase the gap between the rich and the poor, then the situation will only get worse. If a cap between the lowest paid employee and the highest paid employee was created to a reasonable amount, and the markup prices on goods was capped, then the gap would have to be closed.
ReplyDeleteDoing something like raising minimum wage could have many benefits to our country. For those who are working at 7.25/hr and raising a family, or have to pay for their own bills, this amount is just simply not enough. If the 7.25 was raised even one more dollar it might help someone who is still in school while trying to support their family, stay in school. With so many people dropping out of high school so they can work full time to survive, something as simple as raising the starting pay wage, could stop the increase of high school or college drop outs.
ReplyDelete