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The Effects Of Minimum Wage Increases

745 words - 3 pages

The current minimum wage is $7.25 which was set on July 24, 2009 according to the United States Department of Labor (U.S. Department of Labor). If a worker is working full time and getting paid the current minimum wage he or she will make around $14,500 a year before taxes, which would put them just over the current poverty line. The potential effects of raising the federal minimum wage are an increased employer cost, increase money consumers have to spend, and increase wages for a portion of the workforce.
With a raise in the minimum wage any employer that employs minimum wage workers would have an increased cost and would have to find a way to make up for that increased cost. Although ...view middle of the document...

According to a report by David Cooper, an economic analyst for the Economic Policy Institute, an increase of the minimum wage to $10.10 would increase the GDP of the United States by $22 billion (Cooper). This increased money in the economy would affect many people and not just the people that are earning higher wages. Since “low-wage workers are more likely than any other income group to spend any additional earnings they receive”, more money will be spent at grocery stores, restaurants, and on paying back debts (Cooper). This increase in cash flow would boost the economy as a whole and be beneficial to the entire country.
Of the workforce 75.3 million workers are paid by the hour and of those 3.6 million were paid at or below the federal minimum wage of $7.25 (Bureau of Labor Statistics ). If the minimum wage was raised to $10.10 these 3.6 million plus any others making under that wage would be directly affected. These people are most likely to spend the extra money they make, as stated above, and will put the money directly into the economy, boosting it slightly. With the growth of the economy, due to the raised...

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