Minimum Wage Pros and Cons

Minimum wage started during the Great Depression and at that time, the wage was $0.25 an hour.  It has been periodically raised on twenty-two instances in correlation with inflation rates, the most recent raise being in 2009 when the minimum wage became $7.25 an hour.  And now the time has come to determine whether it is time or not to raise it.  Many different amounts have been thrown out from ten dollars to fifteen dollars.  I want to in this post look at some of the different pros and cons associated with raising the minimum wage.

Pros: The Economic Policy Institute states that raising the minimum wage would stimulate the economy and open more jobs to the people.  It shows that $22.1 billion net would be the result of raising the minimum wage to $10.10.  Increasing the minimum wage would cause a lower poverty rate. in fact it would bring 900,000 people out of poverty.  A higher minimum wage would decrease government welfare spending.  If people could earn a higher wage, they would be less and less dependent on the government to pay for their basic needs.  The Economic Policy Institute found that if the minimum wage was increased to $10.10, 1.7 million Americans would no longer need government support.

Cons: The Congressional Budget Office, in contrast to the Economic Policy Institute, states that the raised minimum wage would only hurt the economy and force business owners to lay off employees in order to afford the wages of others.  Increasing the minimum wage could cause more poverty because more people would be out of work due to budget cuts.  Somewhere, someone will have to pay for the raised income whether it comes from the public taxes, or simply the consumer.  If businesses are to be responsible for compensating the raised wage,  people will lose their jobs and that will send the poverty rates much higher.  A raised wage would hurt businesses and cause many to shut down.  This is especially applicable to small, locally-owned businesses who are struggling enough as it is to pay their employees as well as other costs.

In my opinion, the minimum wage should be raised, but not by much.  not to $10 and not to $15, but possibly to $8.50 or $9.

http://minimum-wage.procon.org/