The Benefits of Increasing the Minimum Wage

Paper Info
Page count 3
Word count 843
Read time 4 min
Topic Economics
Type Essay
Language 🇺🇸 US

The issue of the federal minimum wage has been a topical one since the moment of its introduction in 1938. Since then, Congress has changed the size of the sum on numerous occasions, which eventually led to the current $7.25 an hour. In recent years, the debate on the necessity to increase the minimum wage has started gaining traction, and it is often discussed on television and in newspapers. The lack of agreement concerning this issue is further exacerbated by the partisan dissent between the Democratic and Republican parties, in which members typically adhere to opposing points of view.

The proponents of the idea to raise the pay for workers contend that it is impossible for a person to live on such a small amount of money and not struggle. While those against the increased state that this move would lead to considerable consequences, which will cause the country’s economy to stagnate and will force employers to make thousands of workers redundant. Nevertheless, the advantages of the increase of the federal minimum wage to $15 will offset possible negative consequences since it will more correctly reflect the economy’s development and will help many low-paid workers stop seeking social benefits. It will allow the government to resolve poverty-related problems and prevent U.S. businesses from underpaying their employees.

One of the most common reasons cited by the opponent of the minimum wage increase states that this would lead to layoffs, cut hours, and even closed businesses unable to provide competitive services. For example, research demonstrated that in Oakland, after the local authorities raised the minimum wage to $12.25, a 36% surge in the price of a cup of coffee was registered (Armstrong). This evidence shows that one of the consequences of a raised minimum wage is the employer’s decision to offset the new costs by increasing the prices of goods and services for the consumer.

This may also lead to other scenarios which are all negative, for instance, poor individuals will no longer be able to afford certain products. Additionally, shoppers with average incomes will simply buy fewer goods or pay for services less often than before. This, in turn, will cause the local businesses to lose customers, will decrease their profits, and will put some of them in the position where they will be forced to dismiss some workers. Moreover, the losses can be significant to an extent that their business model will cease to be viable, and they will have to stop their operations. Thus, an increase in the federal minimum wage is a potentially dangerous endeavor that can result in negative effects on the economy.

Nevertheless, the advantages of the increase of the federal minimum wage to $15 will offset possible negative consequences since it will more correctly reflect the economy’s development and will help many low-paid workers stop seeking social benefits. According to Economic Policy Institute, the value of the received salary today is lower than 50 years ago; over this period, the workers’ productivity has doubled, and to match this rate, the minimum wage must be $20 (“Why the U.S.”). This information clearly demonstrates that the current status quo does not represent the factual progress the economy has made over the past decades.

By refraining from the decision to increase the minimum wage, the government allows employers to exploit employees by paying them salaries that are below those which are substantiated by the economic development. Moreover, receiving $7.25 an hour would translate into $15,080 of annual income, which is not enough to cover food, transportation, and housing expenses, as well as support a family, even if no taxes are subtracted (Ornstein). This means that a hard-working person who is unfortunate to be paid a minimum wage will be unable to provide themselves with bare necessities and will be forced to apply for benefits. The government could decrease certain taxes for enterprises and compensate for the lost gains by cutting down on some social programs, especially for the working poor. If the increased minimum wage is approved, this demographic will be able to earn enough money and raise themselves out of poverty.

The increase of the minimum wage to $15 will bring significant benefits to the country by providing a better reflection of the economic progress of the past 50 years and allowing people to escape poverty. It will ensure that the most vulnerable members of society, especially those experiencing financial problems, will receive an opportunity to build their future and live with dignity. This measure will also grant individuals the ability to allocate time for studying to gain a new profession instead of working extra hours to pay for their flat and food.

The increased minimum wage will recognize the efforts of hard-working people who are currently exploited by their employees and whose lives depend on the small remuneration they get for their services. Thus, members of the two parties sitting in Congress have to unite on this issue and make everything in their capacity to ensure that the citizens have a right to be paid fairly for their work.

Works Cited

Why the U.S. Needs a $15 Minimum Wage.” Economic Policy Institute and the National Employment Law Project, 2021. Web.

Armstrong, Ari. “Minimum Wage Laws Are Immoral and Harmful.” Ethics. Ed. Noël Merino. Farmington Hills, MI: Greenhaven Press, 2015. Opposing Viewpoints. Rpt. from “Minimum Wage Laws: Immoral, Crippling, and Nevertheless Supported by Many.” www.theobjectivestandard. Opposing Viewpoints in Context. Web.

Ornstein, Norm. “There Is a Moral and Economic Case for Raising the Minimum Wage.” Ethics. Ed. Noël Merino. Farmington Hills, MI: Greenhaven Press, 2015. Opposing Viewpoints. Rpt. from “The Moral and Economic Case for Raising the Minimum Wage.”www.nationaljournal. Opposing Viewpoints in Context. Web.

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NerdyBro. (2022, June 7). The Benefits of Increasing the Minimum Wage. Retrieved from https://nerdybro.com/the-benefits-of-increasing-the-minimum-wage/

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NerdyBro. (2022, June 7). The Benefits of Increasing the Minimum Wage. https://nerdybro.com/the-benefits-of-increasing-the-minimum-wage/

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"The Benefits of Increasing the Minimum Wage." NerdyBro, 7 June 2022, nerdybro.com/the-benefits-of-increasing-the-minimum-wage/.

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NerdyBro. (2022) 'The Benefits of Increasing the Minimum Wage'. 7 June.

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NerdyBro. 2022. "The Benefits of Increasing the Minimum Wage." June 7, 2022. https://nerdybro.com/the-benefits-of-increasing-the-minimum-wage/.

1. NerdyBro. "The Benefits of Increasing the Minimum Wage." June 7, 2022. https://nerdybro.com/the-benefits-of-increasing-the-minimum-wage/.


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NerdyBro. "The Benefits of Increasing the Minimum Wage." June 7, 2022. https://nerdybro.com/the-benefits-of-increasing-the-minimum-wage/.