The Battle Over Minimum Wage in the United States

In the United States, minimum wage laws are a widely debated topic. Advocates of change argue that the minimum wage is too low to meet people’s needs, while others suggest that raising the rate would be detrimental, rather than helpful. Below is a discussion of this controversial issue featuring factual arguments from both sides.

Fast food workers protest for higher minimum wages.

Productivity

A strong argument in favor of an increased minimum wage points to the historical progress of business in the United States. As businesses began enjoying increased financial productivity, every year worker’s wages remained stagnant. Senator Elizabeth Warren noted that the minimum wage would now be nearly $22 had it kept pace with productivity as cited in the International Business Times.

It is this disparity that angers many proponents of a higher minimum wage. While businesses are enjoying heightened productivity, the workers who carry out the production are not paid accordingly. The extra profits from this productivity have gone toward making the rich richer, instead of rewarding those responsible for the work.

Price Spike Myth

One fear regarding an increased minimum wage is that that prices for goods and services would subsequently increase. This is another point that was addressed by Senator Warren and cited in the International Business Times.

She noted that price increases would be extremely minimal and would be offset by the increased wages. In her example, she suggested that a typical fast food meal would increase by a miniscule 4 cents if the minimum wage were raised to $10. If prices would not spike, then people who do not earn minimum wage should not fear a decrease in buying power if it were to be raised.

Who Earns Minimum Wage?

A common argument in favor of an increased minimum wage is that it will help parents struggling to support their families with their minimum wage job. While these examples evoke an emotional response, it is not a situation that is prevalent according to statistics from the Cato Institute.

These statistics suggest that the majority of the people earning minimum wage in the U.S. are not struggling to support families. Rather, large percentages of this group are teenagers who belong to financially stable families and workers who voluntarily work part time. With this in mind, raising the minimum wage would give extra income to many people who are not in financial need.

Impact on Employment

Raising the minimum wage is not a cost-free endeavor, according to the Cato Institute. Research suggests that when the minimum wage rises, employment numbers fall. This is due to the fact that raising the minimum wage puts a strain on employers.

With a higher wage demand and fixed funds, fewer employees can remain on the payroll. Although a higher minimum wage will give some workers a larger income, it may eliminate jobs for many others. DC companies and others simply cannot face this kind of wage hike right now.

Global Comparisons

Another popular argument in favor of a higher minimum wage involves making comparisons with foreign minimum wage laws. The minimum wage in many other countries is much higher than that of the United States, according to an article from The Atlantic. This piece mentions Australia and France, as these countries have a minimum wage of $15 and $12 respectively.

While on the surface it seems outrageous that American workers earn comparatively meager wages, in actuality the American minimum wage actually offers more buying power. This stems from the fact that the expense of living in the major cities of these countries is far higher than that of the United States. In a direct numerical comparison, a higher minimum wage would seem like a necessary move, but in reality, U.S. workers enjoy more buying power.

Minimum wage laws have developed into a controversial topic. This stems from the fact that the current minimum wage benefits many people, while simultaneously placing others at a disadvantage. What do you think? Does the U.S. need to raise the minimum wage? Should there even be a minimum wage? Does the minimum wage do more harm than good? Voice your opinion now.

About Adrienne Erin

Adrienne is a freelance writer and blogger who is always searching for the other side of the story. Look for more of her work by following her on Twitter at @adrienneerin or checking out her blog, Pongra.
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