President Barack Obama is proposing a new plan to Congress to raise the federal minimum wage from $7.25 per hour to $9 per hour. Obama says this would increase the earnings of 15 million low-income people, narrow the gap between the rich and poor, and reduce poverty. However, businesses claim this will increase expenses, which will lead to reduced hiring and increased unemployment. Down below are three different perspectives on the minimum wage debate.
Small Business Owner
The small business owner immediately thinks that this is not good for the economy. With all of the regulations, taxes, and insurance, it is often difficult just to keep the business running. They do not need extra expenses on top of everything. This means that they cannot hire as many people, which puts more stress on the business owner to find more efficient ways of doing things or to do more things themselves. Prices will have to be raised to cover payroll, and workers cannot receive as many wages once they are trained, neither of which are good for a recovering economy.
The economist says that minimum wage has a smaller adverse effect on employment than most people think, and also has little impact on income inequality. He disagrees that raising the minimum wage to $9 will be a job killer. It will certainly benefit low wage workers. However, there is a difference between minimum wage worker and worker from a low-income family “Because the minimum wage is not highly targeted at low-income families, raising it probably reduces income inequality by a little but not by very much. Similarly, raising it has very little effect on the poverty rate although it probably has a small beneficial effect.”
Minimum Wage Worker
The minimum wage worker thinks it is a great idea to raise the minimum wage. It is nearly impossible to live off a minimum wage income, and even raising it $1 per hour more will have a huge impact on how someone can afford to live. It will also prevent them from stealing, selling drugs, or selling their body in order to make ends meet. It would definitely help several low wage earners to make progress with their lives.
In the end, I don’t think minimum wage has that much of an impact on the economy. Minimum wage workers make up a small portion of the overall economy. With that being said, I don’t think it’s the right time to raise it. Although it will help low wage workers, it will also harm small businesses by providing extra expenses and increase the unemployment rate that is still pretty high. The minimum wage will be increased eventually due to inflation, but right now I think it is time to focus on bigger issues affecting our economy, such as the federal deficit and the national debt.
Thanks to everyone for reading this. Please like the post, comment if you have feedback, and share with your friends.