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Minimum Wage Essay

1817 words - 8 pages

Poverty in the United States will keep increasing if Congress does not raise the minimum wage as living expenses continue to rise. With expenses such rent and food, millions of people in the US are struggling to afford the necessities to keep them alive. In order to help the working and middle class, President Barack Obama wants Congress to raise the minimum wage from $7.25 an hour to $9.00 an hour by the end of 2015. Unfortunately, CEO’s and the Republican Party in the US are against raising the minimum wage because it will cut into the companies’ profits and claim that it will cause job losses. There are several benefits in raising the minimum wage, as it reduces the number of people in ...view middle of the document...

With necessities such as rent and energy, people are forced to spend their paycheques on rent so that it will prevent one from being evicted. By increasing the minimum wage from $7.25 to $10.10, it would improve the lives of many Americans: “the raise in minimum wage would reduce the poverty rate by as much as 1.7 percentage points”. This would be extremely beneficial to the US economy as the government would not have to send out as many food stamps. In fact, the Federal government spends $668 billion dollars on welfare programs every year, but this number can be significantly reduced if the minimum wage is increased. This would allow the tax dollars to be spent on things such as education and other social services. With the increase in minimum wage, more families would not have to rely on the government to provide one with food stamps which would in turn save the government millions of dollars. Moreover, the Federal government needs to raise the minimum wage or else the poverty rate will keep increasing, as the poverty rate in the US is currently at 15%. Inflation is severely impacting people across America who make minimum wage as many are living from paycheque to paycheque. With Congress continuing to keep the minimum wage at the same level, it is causing the cheques of the working class to decrease in value. Shockingly, 40% of the people who made minimum wage in the US in 2013 earned less than the Federal minimum wage in 1968. “The minimum wage reached its historic high in 1968, when it was raised from $1.40 to $1.60 per hour… that would equate to $10.55 per hour in 2012 dollars.” This helps demonstrate the fact that every year the minimum wage is worth less and less as inflation is causing the American dollar to decrease in value. If Congress does not raise the minimum wage, more and more families will have to rely on food stamps, as the current minimum is not enough to keep one alive. In order for poverty to decrease, Congress needs to raise the minimum wage so that it will provide a living wage which will benefit the American economy.
Similarly, the United States government needs to raise the minimum wage as it creates wage growth which provides people with more money to spend. With the minimum wage being at a very low level, many adults as well as teenagers do not have enough money to spend on additional products such as a new television or even a new laptop. This in turn negatively impacts the economy because businesses have fewer customers, which in turn decrease the company’s profits. By having fewer customers, less people are employed which results in a higher unemployment rate, and forces the government to hand out more welfare cheques. “Mr. Obama says raising the federal minimum wage from $7.25 to $9 an hour is good for…businesses dependent on more consumer power to fuel their growth”. There are several benefits to raising the minimum wage as it provides people with more money to spend on other businesses which results in a...

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