Minimum wage is defined as the lowest wage permitted by law or by special agreements, such as one with a labor union. The federal minimum wage was introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt. The minimum wage originally started off at $0.25 per hour. Over the years, the minimum wage has been increased by congress over twenty five times. Over the past several years, there has been a huge fight for minimum wages to be increased for several reasons. Workers have protested and gone on strike for higher wages.
There are many pros to raising minimum wage, while there are also many cons. Lets first go over the reasons that raising minimum wage would be beneficial to the citizens of the United States, and the government as well. Raising minimum wage would increase economic activity and create new jobs. According to ncpolicywatch.org, recent studies have indicated that raising minimum wage to $10 would increase paychecks for workers in the state of North Carolina by $2 billion dollars per year.
That extra $2 billion dollars would increase consumer spending at local businesses, creating more than 5,000 new jobs. Increasing wages reduces absenteeism and turnover within companies. Turnover requires managers time to review applications, interview potential applicants and provide training and supervision for new workers. Higher wage persuades workers to stay employed longer, which reduces the need and cost of constant training of new employees.
The next benefit of raising minimum wage is that it could reduce poverty. According to a 2014 Congressional Budget Office Report, increasing the minimum wage to $10.10 would lift 900,000 people out of poverty. Poverty is harmful to our society. It weakens families, trap individuals by decreasing mobility making it difficult to escape poverty, and it weakens our democracy.
Increasing minimum wage would reduce government welfare spending. The government runs certain programs to assist low income families or people living in poverty with free or reduced cost food, healthcare, education and housing assistance. All of these programs have income limits. Most of the programs require recepients to be a citizen of the United States and other requirements such as family size. It is reported that the increase would shave around $7.6 billion off annual government spending on these types of programs.
Raising minimum wage would significantly reduce crime rates. According to studies completed by Ohio State University, “researchers examined national crime rates between 1979 and 1997 and found that much of the increase in crime during that period can be explained by falling wages and rising unemployment among men without college educations (Ohio State News, 2002). The strongest finding in the study was the link between dropping wages and property and violent crimes including burglary, assault and robbery all of which are typically crimes where money is the motive. What is interesting about these studies is that while crimes like burglary and robbery are increased when wages are lower, rape and murder charge rates are not effected. This provides good evidence that many criminals are motivated by poor economic conditions to turn to crime.
Raising minimum wage will increase school attendance and decrease high school drop out rates. In many areas, specifically low income areas, children who are still attending school are also required to work to help support their families. Raising wages would help these families so that their children may not have to work therefore they could spend more time focusing on school. In the circumstances where it is necessary for these children to still maintain school and a job, the children may be able to work less hours and spend more time in school, or studying and doing homework. Work can be a big cause of stress and when one is stressed out about work, it can negatively effect their performance in school.
Raising the minimum wage will lead to a healthier population and help prevent premature deaths. Studies find that those who earn higher wages are more likely to exercise and consume healthier meals, less likely to smoke and less likely to suffer from emotional and psychological problems.
Some people believe that raising minimum wage will also greatly increase the prices of the things we consume in life such as food and gas. According to many studies, this is simply not the case. In a new Upjohn institute working paper, Daniel MacDonald and Eric Nilsson of California State University, advance the literature on price effects of minimum wage increases. These studies show that for every ten percent increase in wages, the prices of everything else only rise 0.36%. This is not enough of a rise to create a significant difference in anything, and if the raises were increased by that much- the slight prices increase is really not an issue.
The current minimum wage is not high enough to allow people to afford everyday essentials and live properly. According to a 2013 poll by Oxfam American, 66% of US workers are earning just enough amount of money to “just meet” their basic living expenses. Many of these people are unable to obtain any extras, while some are at the point where they have to skip necessities to make ends meet like skipping meals and medicines.
Everyone likes more money, but there is a reason that it is not so easy to raise minimum wage. Now that we have gone into depth about the pros of raising minimum wage, let us discuss a few of the cons. Raising wages could hurt many businesses and force companies to close. According to a Gallop poll done in 2013, 60% of small business owners agree that raising minimum wage would hurt small business owners and their companies. Most small companies do not have the financial means to pay their employees higher amounts of money.
Raising minimum wage will increase the price of consumer goods. If minimum wage is increased, companies may use more robots or automated processes to replace service employees. This could cause many employees to lose their jobs, and also could replace certain jobs together. If a robot could mop, vacuum and clean surface tops for example- the cleaning service industry could be completely wiped out. According to the Washington Post, many restaurant chains are already at work looking for ways to take humans out of the picture which is a huge threat in an industry that employs 2.4 million wait staff, nearly 3 million cooks and many of the nations 3.3 million cashiers.
The rise of minimum wage requires raises for other employees, as well. When wages are raised, suddenly entry level employees are making the same amount of money as someone in the same position who has more experience than them, and additional education such as college degrees. I am sure you can imagine the rage this would cause if people with experience and education were making the same amount of money as less experienced employees.
I personally believe that the minimum wages in the United States need to be increased. After weighing the pros and cons, it only seems logical that at this time, the best solution is raising wages. This is a very controversial topic, because as I have stated, some people believe an entry level job, one that may require no education past a high school diploma and no special skills should be getting the same pay has some one who has more education and skills. I agree with this, and think that if minimum wage goes up there also needs to be an increase in wages other professions.
If the government is able to cut back on federal assistance in things like welfare and other financial assistance, giving employees higher wages seems very possible. I am sure that it can take a toll on someones pride, when they need the governments assistance to take care of their family, and raising the wages and cutting back on the assistance could really help this issue. I believe that every working human should be able to afford basic human rights such as shelter, food, and being able to financially support their families.