Should the government raise the minimum wage pros and cons. The Pros And Cons Of Minimum Wage Increase 2022-10-29
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The issue of whether or not the government should raise the minimum wage is a complex and controversial one, with arguments both for and against such a policy. In this essay, we will explore some of the main pros and cons of raising the minimum wage in order to better understand the implications of this policy.
One of the main arguments in favor of raising the minimum wage is that it can help to reduce poverty and improve the standard of living for low-wage workers. Many minimum wage earners are struggling to make ends meet, and a higher minimum wage would allow them to better afford basic necessities such as housing, food, and healthcare. In addition, research has shown that raising the minimum wage can lead to increased consumer spending, as low-wage workers tend to have a higher propensity to spend any additional income they receive. This, in turn, can stimulate economic growth and create jobs.
On the other hand, opponents of raising the minimum wage argue that it could have negative consequences for both businesses and workers. For businesses, a higher minimum wage could lead to increased labor costs, which could force them to raise prices or cut jobs in order to stay competitive. This could particularly impact small businesses, which may have less flexibility to absorb these costs. Additionally, some argue that a higher minimum wage could lead to automation or offshoring of jobs, as businesses seek to find ways to reduce labor costs.
Another argument against raising the minimum wage is that it could lead to unintended consequences, such as reducing the number of job opportunities available to low-wage workers. Employers may be less likely to hire new employees or give raises to existing ones if they are required to pay a higher minimum wage. This could particularly impact young or inexperienced workers, who may have a harder time finding employment or advancing in their careers.
Overall, the decision of whether or not to raise the minimum wage is a complex one that requires careful consideration of the potential costs and benefits. While raising the minimum wage has the potential to improve the lives of low-wage workers and stimulate economic growth, it also carries the risk of negative consequences for businesses and workers. Policymakers must weigh these factors carefully when making decisions about the minimum wage.
Pros and cons of raising the minimum wage
When adjusted for inflation, the value of the federal minimum wage can be seen as the Businesses can increase profits, consumers can spend more, and the economy can grow as a result of increasing the federal minimum wage. There is evidence that when annual increases in the minimum wage are planned, firms have time to plan — increases in automation, increases in prices and therefore it is easier to absorb the increase. In 1905, the Supreme Court ruled in the case In other words, an agreement between two citizens privately negotiated was legal even if the terms appeared to the advantage of one party over the other. They would raise prices on goods and services in order to maintain profit margins, in effect cancelling out the increased purchasing power that an individual would supposedly have due to a higher minimum wage. Political opposition to minimum wage laws reached absurdity in the 1936 Supreme Court decision The decision was considered so egregious that Republicans repudiated it at their national convention that same year.
Every state has the authority to raise the minimum wage, but there is empirical evidence to support the notion that raising the minimum wage is a good idea. In 1938, Congress passed landmark legislation codifying American worker protections. It Would Decrease the National Wealth Disparity The common perception is that raising the minimum wage will decrease the income disparity in America, which is approaching the levels previously reached during the Those who favor an increased minimum wage assert that government action is needed since workers have lost bargaining power with employers due to the erosion of Since 1992, the Gini Index — a measure of the deviation in the distribution of income or consumption within a population and a perfectly equal distribution — has Research published in the On the other side of the argument, 3. The current wage has not been increased since 2009. With more demand comes more opportunities for local businesses to expand. If the wage was raised to 9. Wages would rise in tandem with consumer spending, which would benefit the economy as a whole.
Many low-income workers pay little, if any, taxes on what they earn each year at the federal level. For Hispanic women, the disparity between what she and a Caucasian male make in the same position is even greater at just 54. Because entry-level jobs are easier to obtain, raising the minimum wage encourages under-employment because it discourages the need to better oneself. There is no clear answer as to what the effects of raising the minimum wage would be, but it is something that is worth considering. Therefore, if minimum wages are too low, they might not have any positive effect at all. Labor laws set the minimum wage rate to protect workers from exploitation by the employer. It is a small decrease in total employment that should be taken into account when determining the increase in average earnings for still-employed workers as a result of higher minimum wages.
As Those who argue for a combination of retraining assistance and a minimum wage sufficient for basic needs say these are necessary to retain the requirement of personal responsibility while providing a helping hand to the economically vulnerable members of society. The actual wage increase costs for raising the minimum wage are somewhat minimal. . Critics of minimum wage legislation claim that by increasing wages, the government is interfering with labor market competition. You can not tell me that with all the corporate executive firepower that exits in this country that a planned faze-in raise of the minimum wage could not be digested successfully in the greatest economy in the world.
Minimum wage pros and cons for workers and small businesses : The Indicator from Planet Money : NPR
Existing businesses close or move away as profit opportunities disappear and crime increases. Then expand that concept to a larger business with 10,000 employees. Friednam feared the introduction of a minimum wage would cause unemployment because in competitive labour markets higher wages lead to less demand. According to them, these policies increase the unemployment rate for low-skilled workers and young people. Articles on Minimum Wage:. Only those persons who have income at or below a specified level are eligible for such assistance as the Determining the Poverty Threshold Economists and government leaders have disagreed over what constitutes poverty ever since the original poverty thresholds — the theoretical amount of income that separates the poor and the non-poor — were initially set in 1965. In that year, the Consumer Price Index CPI rose to 2.
Inflation: The minimum wage rate is raised in order to account for inflation as more workers will get jobs with higher pay to cater for increased prices. With the power of the individual comes an expectation of personal responsibility and accountability. Because the federal minimum wage is not indexed for inflation, its purchasing power the number of goods that can be bought with a unit of currency has dropped considerably since its peak in 1968. The national poverty rate in Australia hovers about 5 percentage points lower than it does in the United States, despite the higher salary. This uneven balance of the distribution of wealth is causing a significant amount of our population to suffer below the poverty line. Individual states are ultimately responsible for deciding how high a minimum wage should be.
It comes at a cost to the employer. In its projections, the CBO assumed that GDP would remain constant, implying that it overstated the number of Americans lifted out of poverty. You will see a lot of families SNAP be reduce and no longer able to afford insurance since they will probably be kick off Medicaid along with other programs. Increase would result in less taxpayer subsidy for corporations whose Consumer spending patterns will be affected if vaccination rates rise due to an increase in consumer spending power, according to a Center for American Progress CAP study. That is why raising the minimum wage causes employers to look for hiring alternatives rather than paying a higher wage for the same positions. There is a lot of research that has been conducted on this topic, and there are a variety of different opinions on it. The provision was removed from the bill after the Senate voted to pass a resolution to do so.
Increasing consumer spending accounts for 70% of the economy, and demand must grow to ensure production and job growth. Meta-analysis, or averaging findings from several studies, is sometimes used to determine conclusions. Many workers who only earn a minimum wage tend to rely on safety net programs to supplement their basic needs. However, they can be rather seen as some kind of political playground instead of a valid tool to fight inequality and poverty. According to the Bureau of Labor Statistics, the median weekly wage or salary for a full-time wage or Clients from this organization are typically impoverished, with a poverty line of 125%. Wage increases can also lead to the displacement of low-skilled workers. Hence, through the introduction of minimum wages, the health conditions of millions of people may be increased significantly.
