Many dissatisfied people suffer in the economy due to their incomes and the minimum wages. In an article, under CNN, the story of Kevin Burgos, an employed American father who’s suffering financially in the current state of the economy is used as an example to support the idea of increasing minimum wages. Kevin works full-time as a fast food assistant manager, earns above minimum wage, and brings additional money to his home on the side. However, his salary and extra money doesn’t fully pay off his simple living expenses. In fact, he is $600 short every month, which makes his family of five suffer. His story points out income inequality and how the minimum wages don’t cut it for many. Kevin and many others that can relate, join him on strikes, so lawmakers could bridge the income gaps.
With that article being said, a debate of whether or not the minimum wages should increase occurs. I think the minimum wage shouldn’t rise currently because it would increase chances of structural unemployment, cyclical unemployment, labor costs, and more. I will be stating arguments from both sides as well as their pros and cons. As Amy, Glasmeier, a professor of economic geography at MIT said, “The minimum wage was never meant to be something for people to live on.” 1 Living wages and the minimum wage aren’t parallel together. The economy could deteriorate from increasing minimum wages depending on time.
First thing to look at is how the minimum wage is actually determined. There’s no specific formula for it to be determined. It is determined by a group of lawmakers, business leaders, and economists who consider the current social and economic standings to make an adjustment if needed to.2 Factors that would play a big role in finding the lowest ‘living wage’ include the unemployment rate, inflation rate, and the average incomes families bring to their households. Sometimes there have been attempts to correlate the minimum wage and the annual inflation rate, but it’s not the correct way to go off about it.
Majority of the people paid minimum wage aren’t living in homes beneath the poverty line. Sure, raising the minimum wage would help those who are suffering in the economy, but it would hurt the economy even more. If minimum wage workers get paid more now, employers and businesses will begin to make less profit. With that in mind, price levels begin to increase and a change in employment occurs. The demand curves slope downward based off average humans functioning, so when things become more expensive then less of it will be used. The domino effect of that will cause people who still work minimum wage jobs to be out of work or even have their hours cut. Another applied proposition is the Law of Supply, where the higher the price suppliers receive, the more they will supply. Higher wages increase the number of workers willing to work, but decrease the number of workers employers will hire, which artificially raises wages by governmental law, creating a...