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Effects Of Increasing Minimum Wage Essay

996 words - 4 pages

The idea of having a federal minimum wage is a good one. The idea is to protect low and unskilled workers and allow workers to earn a living wage. The recent debate on the floor, though, is whether or not to raise the minimum wage from the current $7.25 per hour up to $10.10. President Barack Obama made this proposal during his annual State of the Union Address, and after this there were many hot debates about it. The debates focused not only on the pro side and the con side of increasing the minimum wage, but also alternatives to increasing it.
There are many pros to increasing the minimum wage, most of which are simple enough to understand and make someone think that there is no reason not ...view middle of the document...

This includes states with fairly large populations, like California and New York. If raising the minimum wage would only affect half of the states, and mostly states with lower comparative populations, then why not raise it?
As for everything in life, for every pro there is a con, and this holds true for increasing minimum wage. A big disadvantage to raising the minimum wage is the fear from consumers that the extra cost of raising it would be passed on to them. This is a valid fear, because there are only really two options when faced with a minimum wage increase: not hire (or even lay off) workers or raise the prices of the goods and services. Depending on what good or service the consumer is looking for, the price increase could be mere cents, or it could be as much as a hundred dollars. The flip side of that is that the workers producing the good or providing the service will suffer, the employer could decide to pass the cost on to them by cutting what benefits the worker gets from working at the company, as David R. Henderson points out in “Most of the Benefits of a Minimum Wage Increase Would Not Go to Poor Households.” While a minimum wage was created to protect low and unskilled worker, it can also do just the opposite. With higher and higher minimum wages, employers are less inclined to hire low or unskilled workers because they do not believe that the value that the worker adds is worth the amount that they are paying the worker. Going right off of that point, hiring less low and unskilled workers creates a greater need for social programs because they then have to seek alternative employment and work for what employers think their input is worth. With a higher minimum wage there could also be an...

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