The Federal Minimum Wage Essay

1283 words - 5 pages

The selling point that has brought people to the United States for centuries is the American dream: Prosperity, Luxury, Opportunity, and so on. Unfortunately for many, this dream has been squandered by the receding economy of an indebted country. As inflation runs rampant, the value of the U.S. dollar decreases, lowering the value of household and business incomes. This economic recession has led many, especially those who only earn the minimum wage, to poverty. According to the United States Department of Labor, “The federal minimum wage is $7.25 per hour” (“Wage and Hour Division”). Some people believe that a solution to this problem is to raise the minimum wage; however, doing so would ultimately result in a negative effect on the United States economy, businesses, and people.
Two groups are affected directly by a change in the minimum wage: the company and the worker. Those in favor for increasing the minimum wage insist that its increase would suddenly provide the workers of the United States with a better life at the expense of their employer, who would get to reap the benefits of a now-motivated employee. However, it is easy to see that this idealistic scenario is simply fantastical and without credibility; if the minimum wage were to rise overnight, companies and corporations would seek to do what they’ve always done: make a profit. They will decide to fire thousands upon thousands of employees in order to balance costs and income. Even worse still, they may implement technology investments to replace these now too-expensive workers. These would come in the form of automated machines and automatic checkout lanes. In fact, this process is already happening as the economy recedes. As the Wall Street Journal’s Farhad Manjoo put it, “Computers seem to be replacing humans across many industries, and we're all getting very nervous” (Manjoo “Humans 1, Robots 0”). An increase in the minimum wage would push companies to take this route as it becomes more and more profitable to them. The end result of all of this would be a suddenly increased level of unemployment bound to become subsequent with an increase in government-funded welfare expenses, weakening the economy even more.
And while these effects are more on the scale of large corporations, small businesses may yet also feel the effects of the minimum wage. With even fewer resources to rely on, a small business would have a harder time progressing and growing; a small business has only a small selection of workers who may be indispensable, so downsizing may be out of the picture, forcing them to cut back expenses, thus stunting their growth and leaving room for large corporations to take over the local industries. This, of course, presents another problem in today’s society concerning capitalism and a free market economy – when a small business grows weak financially; larger corporations have an opportunity to sweep in and seize hold of the local market for specific goods and services,...

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