Minimum Wage-Too Low or Just Right?

Should the USA Raise the Federal Minimum Wage?

Before we dive into the topic of the federal minimum wage, it would be good to know a little bit about it first.

Should We Raise the Federal Minimum Wage? No!

Maintaining the federal minimum wage in the United States would preserve job opportunities, create an incentive for education, and benefit small businesses.

WE THE ECONOMY | Why is the minimum wage important? - Neil Irwin
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The Opposition

Why Would People Want to Raise it?

The minimum wage is currently a hot topic. Many people think that it should be raised, either to $!0, $12, or $15.

At first, raising it seems like a good idea. It would:

  • Help families living paycheck to paycheck with minimum wage jobs get more money to live on.
  • Increase business by putting more money in the pockets of consumers

34% of minimum-wage workers are the head of their family. (High school kids aren't the only ones with these jobs)

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However, the other side (against raising the wage) has many supporting points that are often overlooked.


1. Increased wage = increased cost for employers

Businesses would have to rationally respond to the mandate of a higher minimum wage in order to preserve their net earnings. (TINSTAAFL)

Businesses might choose to fire people so that they don’t lose money since they have to raise wages for their workers

A cut in jobs or even just hours for a job would actually make more people more dependent on government (which is what is trying to be avoided altogether.

A raise to $10.10 would likely reduce unemployment by 500,000 workers.

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2. A higher wage would discourage education.

Workers would be content with earning minimum wage.

Current minimum wage workers often use their jobs as stepping stones to a higher-paying job.

People would be drawn away from professional fields and not pursue them.

Why be an RN with years of post-grad for $13/hr under a doc when you could work at

McD’s out of high school for $15/hr?

America would struggle to have enough doctors, lawyers, etc. Jobs that are much needed!

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3. Small businesses would struggle to stay open.

Wal-mart and other big businesses make enough profit to take on the higher wage, but small non-chain businesses could not without spiking prices (if they don’t fire people and increase unemployment as previously stated)

Small, local businesses would have to raise prices more because it costs more for them to have goods delivered.

Higher prices = fewer customers

Fewer customers = less competition for larger businesses

Less competition = A spike in prices and more money that the consumer must pay

Video Summarizing Both Sides

Economics: Is Raising Minimum Wage A Bad Idea? - Learn Liberty

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