Effects of Raising the Minimum Wage to $15 an Hour

Published: 2019-06-14 08:47:23
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The minimum wage has been on the course since the great depression in which the federal government agreed on the amount an individual should work for per hour. Recently, there has been an increase of this wage to $10 in some states under the administration of Barack Obama. However, the recent demand to increase the minimum wage to $15 has become hotly debated due to the opposing issue. While the proponents of this issue argue that is one way to reduce poverty by paying workers good salaries, the opponents disagree with their ideologies. Despite certain benefits, this proposal will hurt less-experienced, less- learned Americans, and will increase the rate of unemployment; hence, should not be put in place since it has negative effects on the citizens.

One of the ways in which increasing the minimum wage to $15 is bad for American citizens is that it will increase the rate of unemployment. Remarkably, the basic neoclassical completive market model that has been widely used asserts that increasing the price of a commodity reduces the demand for such item (Holtz-Eakin et al. 111). In this manner, when the government upsurges the price of wages per hour, the employer will demand less labor that in turn will leave most individual with no jobs. A contemporary study by the Heritage Foundation determined that the proposal to raise the federal minimum wage from $7.25 to $10.10 per hour is likely to eradicate approximated 300,000 jobs per year (Tanner 71). On the same note, a study conducted by Carpenter also reveals that employers are willing to reduce the number of working staffs in order to cope up with the amount of money that is used for the salaries of employees (120). This means that a job that should be done by two people will be handled by one individual at a higher salary.

Increasing the wage bill will also deny the less educated people the privilege of getting jobs. In the event that there are few job opportunities as a result of high rate of unemployment, companies will consider individuals with higher qualification locking out people that have only attained high school education. In a recent research by Carpenter, 10 percent rise in the minimum wage drops low-skill employment by about 2 to 4 percent and overall restaurant occupation by 1 to 3 percent (32). This shows that a number of inexperienced individuals who have not attained a certain level of education will not get an opportunity to get jobs. In this regard, Hanson et al. assert that such individuals will resort to criminal activities that may jeopardize the security of the state (121). On the same note, no employers would wish to pay huge wages to workers who have little or no qualifications.

The increase of minimum wage may compel employers to increase the price of items. In order to cope up with a huge amount of salaries that comes after increment, employers can decide to escalate the price of the commodities to generate the income. This comes due some restrictions provided by labor unions not to lay off employees due to the fact that the state has increased the minimum wages (Wessels 229). As such, employers throw the burden back to the states by increasing the price of the products. Particularly, this will heavily affect the middle earners since their wages will not be increased while the prices of the items are increased by the business people.

Lastly, increasing the minimum wage bill will facilitate imbalance of movement that will cause unevenness of populace if it is applied to individual states. First, highly qualified employees will shift to states that offer high price since they possess the bargaining power of good education. This suggests that some cities or states will have qualified employees while some will not. On the same note, employers may source in members from other countries who can work with set wages of the company. Particularly, some countries offer minimum wages as low as $2 per hour (Wessels 229). Therefore, when such individuals get an opportunity to work for anything above what their country gives, they will likely go to the United States to seek a job that they will get since they can accept to take low wages. However, this may be an injustice to the natives who have no jobs.

In conclusion, despite the argument of the proponents that increasing the minimum wage to $ 15 will positively affect the lives of U.S citizens, it has negative effects that make it a bad move for the United States. First, high wages will reduce the number of jobs since the employers will not afford the salaries the come with such increment. Secondly, the employers will favor the highly educated people leaving less learned individuals without jobs that can then result to high rates of criminal activities. Moreover, in order to cater for high wages, employers resort to increasing the prices of the products to get more money. As a result, it is the common citizens that will suffer the high prices. Lastly, it creates an imbalance in the population.

Works Cited

Carpenter, Emily. "The Effects of Raising the Minimum Wage on the Hospitality Industry." Undergraduate Research Journal for the Human Sciences 13.1 (2014).Hanson, Andrew, and Ike Brannon. "Raising Wisconsin's Minimum Wage: Who Would Be Helped? Who Would Be Hurt?." Wisconsin Policy Research Institute (WPRI) Report (2014).

Holtz-Eakin, Douglas, Ben Gitis, and E. J. McMahon. "Higher Pay, Fewer Jobs." (2015).

Tanner, Michael D. "The Pros and Cons of a Guaranteed National Income."Montana (2015).Wessels, WalterJ. "MINIMUM WAGE." Encyclopedia of Contemporary American Social Issues (2010): 229.

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