The minimum wage has been a controversial topic in the past few years, with many people on both sides of the debate weighing in. Some feel that increasing the minimum wage is an important step to combat the growing income inequality and poverty rates, while others believe it would only lead to higher unemployment rates. In this post, we’ll consider both sides of the argument and offer our own thoughts on whether increasing the minimum wage would have any effect or not. You might be surprised by what we think about shopdrop: read on to find out!
1. Pros of Increase
Some people feel that by increasing the minimum wage, the country would be able to combat the growing income inequality. Many people have become wealthy from great ideas or hard work; however, a large percentage of these people are not poor. Most successful and wealthy entrepreneurs also have a decent amount of money to give away to charities, which is why they can afford to donate millions of dollars to charities each year. If someone earns less than $30,000 per year and works 40 hours per week, they don’t make enough money to comfortably afford basic needs such as rent, food, and paying bills. This means that many are forced into poverty simply because they can’t pay for living expenses with their salaries alone.
2. Cons of Increase
Many opponents of this movement feel that the decision to increase minimum wage will only lead to higher unemployment rates. Many companies will choose to hire fewer employees, which can result in overall layoffs and less people working full time jobs. Companies and businesses are already struggling to stay afloat, and increasing the minimum wage will only make things worse. If wages go up, then prices will also go up, meaning that businesses could suffer even more if they need to raise their product prices in order to comply with the new minimum wage guidelines.
3. Effects of Increase
The effects of raising or lowering the minimum wage is not an easy task, as many factors come into play when making this decision. Currently, the minimum wage is $7.25 per hour. While this may seem like a large amount of money to some, it is less than half of the average salary for a full-time breadwinner. Since most full-time workers live on less than $30,000 per year and make more than half of their annual income from wages, many in America can barely afford basic living expenses without working extra hours or having to go on public assistance. According to the Economic Policy Institute, it would take minimum wage earners nearly 7 years to earn enough money for the basics and for a little extra spending money if minimum wage was increased by $2.13 (to around $16 dollars per hour), twice what it currently stands at now.
According to the Congressional Budget Office, raising the minimum wage from $7.25 per hour to $10.00 would increase government revenue by roughly 0.5%. If the government were to raise this same minimum wage, then it would cost an estimated 2 million people their jobs, while only leading to 1.3 million of these employees being employed as full-time workers, according to an analysis of data by the CBO in 2011. The issue with this is that there are many other ways in which politicians and leaders can influence economic outcomes.
4. Our Thoughts
It’s hard to tell whether increasing the minimum wage will have positive or negative effects, as there are many factors that come into play. Certainly, raising the minimum wage would mean more people working full time and earning more money each year. But at what cost? It’s all about supply and demand; if you raise the amount that you’re paying for work, then employers may want to hire fewer people or even choose to outsource work to other countries where salaries are lower. This can lead to higher unemployment rates and less people with full time jobs.
The Federal Reserve may be able to control some parts of the economy, but they cannot control how much a company pays its employees or how much it hires workers. In order to figure out the economic impact of raising or lowering the minimum wage, economists would need to know a few things. First, they would need to know how many people are working and earning minimum wage. The next thing they would have to look at is the amount of goods and services that these workers can afford with their wages. It’s important to note that this information needs to be broken down by region, so as not to ignore any possible regional differences that may exist in costs of living. Finally, it’s important to take into account changes in other parts of the economy when trying to make predictions about how raising or lowering minimum wage will affect employment rates, regional workforce wages and regional unemployment rates.
Conclusion
Though there are many arguments for and against increasing minimum wage, the effects of doing so cannot be ignored. When raising the minimum wage is considered, it must be seen in the context of how other factors affect economic growth. Some believe that raising the minimum wage would lead to more job creation and more people working full time breadwinners jobs, while others believe that a higher minimum wage could lead to higher unemployment rates and an even larger push towards a “living wage” initiative.
