The prospect of raising the minimum wage has generated considerable debate and controversy since the federal rate was last set at $7.25 an hour in 2009.
Conservatives believe that increases in the minimum wage would place a burden on employers, especially small companies, resulting in slower growth and deceased levels of employment. Liberals says that the minimum wage has not kept up with inflation and that many minimum wage workers are impoverished.
Here is a summary of the pros and cons of raising the minimum wage.
Why the Minimum Wage Should Be Raised
An increase in the minimum wage raises the standard of living for impoverished workers. The minimum wage hasn't kept up with inflation consequently the pay of many workers, particularly those with families of 3 or more people, are now well below the poverty level.
Studies show graduated increases in the minimum wage have low impact on unemployment.
Additional income would be spent by consumers and would ripple through the economy if overall budgets for salary were increased under a gradual increase in the minimum wage scenario.
Government expenses for social programs aimed at the poor would be reduced. This might result in slightly lower taxes for other Americans.
Slightly more revenue for the government would be generated from payroll taxes for social security
Why the Minimum Wage Should Not be Raised
Possible Layoffs to workers at employers with a fixed compensation budget.
Employers might hire fewer workers in the entry level jobs needed to begin a career.
Provides an incentive for employers to invest in automated processes, technology and machinery to increase productivity rather than human resources.
Prices might be increased to offset higher labor costs.
For small companies, already stressed owner/operators might take on more responsibility.
Wages for higher paid workers might be suppressed, and salary increases might be lower for those not impacted by a higher minimum wage.
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