What Are the Pros and Cons of Raising the Minimum Wage?

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raising the minimum wage pros and cons

The minimum wage in some countries like the United States is $7.25 per hour, or $290 per week and $15,080 per year. It affects those who work full-time and live below the poverty level. Many politicians have argued against increasing this, citing groups like Democrats and Labor Unions as supporters of this increase. You can check out the below-mentioned article to learn more about raising the minimum wage pros and cons

The pros of increasing the minimum wage are more money for those who work for it and an increase in the economy. The cons are that it causes prices to go up and jobs will go down. Parliament member Richard Graham (D-PA) has recently proposed a bill, HR 25, to raise the minimum wage to $10.10 per hour and give millions of low-wage workers a raise. Increasing the minimum wage would cause many workers to have a pay increase. 

It would then help those who live below the poverty level and allow them to have more money each week or year. Raising the minimum wage is suitable for employees but bad for businesses who hire people to work there, giving them more money as employees leave their jobs because they make more money at another store or do not want a lot of work.

Understanding the basics of the concept:

The pros of increasing the minimum wage are that it improves the lives of many with low income. It is because if you have a low income, you spend most of your money on necessities like food and necessities for living. Thus you don’t have plenty for luxuries such as insurance or health care. 

With the increase to $9.00 or $10.00 per hour, those with a low income will start to have more money for luxuries, thus allowing them to pay for things like insurance. Another reason to believe this is a pro is that it puts more money in the economy, allowing small businesses to have more money to hire people or invest in their business. 

It will cause more businesses to be opened and jobs to be created. The cons of increasing the minimum wage are the money needed for companies working with low-income people and the need to hire more people. Raising the minimum wage pros and cons include some of the below-mentioned points.

Why should the minimum wage be raised?

President Barack Obama is pushing to raise the minimum wage from $7.25 an hour to $9 and then index it for inflation. He was not the only one because many Democrats on Capitol Hill were joining him, like some Republicans. The push is part of a larger Democratic strategy to paint the GOP as out of touch with working-class voters who care about such issues as education and poverty.

In economics, a higher minimum wage would roughly translate into more money for low-income workers and spending on goods and services. That would stimulate economic activity, increasing demand across the board.

Two reasons why the US should raise the minimum wages are mentioned below:

  • First, the benefit for low-income workers who make less than $9 an hour would nearly double, from about $5,200 to more than $8,700 a year. A worker earning up to $16,600 a year before taxes would jump from about $11,600 to over $15,000 annually.
  • That’s because the federal government currently taxes ordinary income at a higher rate than money earned by most people in the bottom 10 percent of earners (about 10 percent). So a higher minimum wage means workers earning a lower salary would see their earnings rise.

Why raising the minimum wage is good?

The reason why the US should raise its minimum wage is that it will help those with a low income to be able to pay their debts and enable them to pay for insurance so that they can have a better life. If they cannot afford insurance, hospitals will be forced to pay for their treatment, which causes financial problems for the hospitals. 

Raising the minimum wage allows more money into the economy because businesses are more willing to spend on production and employ more people. Raising the minimum wage also makes paying for education easier for low-income families because it allows them to afford books and dorms. Therefore, the government should submit the minimum wage because it promotes more jobs and benefits those living below the poverty line.

Positive effects of raising the minimum wage: 

When people start working, they get paid $5.25 per hour. Since then, their wage has gone up to $7.75 per hour, which is already a very high wage for them. Raising their salary to $9 would help them, even more pay for things they may need, such as insurance and food. 

The second positive effect is that it will allow those who need to buy college books and supplies such as uniform books or pens and pencils to assist them in their higher education. Increasing the minimum wage would allow students that attend college less expensive school supplies, so they can save money in the long run by not having to use their loans all at once.

Raising the minimum wage pros and cons:

Raising the minimum wage is suitable for this country because it will allow those who struggle to get by to have a better life, but it also includes numerous cons. 

Benefits of raising the minimum wage:

The money earned would go directly to transportation, food, and gas. That way, they can also spend more money on things they may need. It will also cause an increase in jobs as well as a tax increase. The way it will benefit them is because it will help them to be able to spend more money on food and other necessities instead of having it go into savings. 

  • Some benefits are that they would be able to spend more money on something they may want to buy. So, for example, if they wanted to buy something expensive or just plain can’t afford it, it would enable them to buy it.
  • The more money in their pocket will allow them to have more money for needed things.
  • An increase in jobs will help people who are struggling with unemployment.
  • A rise in minimum wage will improve their lives in many ways.

Disadvantages of raising the minimum wage

When businesses want to employ more people, they have to hire in low-income areas that don’t pay a lot, which puts them out of business. The jobs will go away from those willing to work for the wages offered, which are usually the lower-paying ones. Since there would be a possible increase in the economy, many businesses would hire people for less than minimum wage and make them work exhausting hours.

  • A lot of workers would be fired and replaced by machines. 
  • Businesses do not have the resources to hire more people and pay them minimum wage; therefore, they won’t get hired.
  • It is against the free market system since doing this interferes with what it is supposed to do.

Arguments against raising the minimum wage:

The main argument is that the prices of food and other necessities will increase. Because their income won’t be enough for their basic needs, they will need to buy things to make up for it. If wages increased, businesses would cut costs by firing part-time employees, putting them on shorter hours, or stopping hiring altogether, so they don’t have to pay. 

The main reason is that there will be a lot of people who will be out of work because companies cannot handle paying higher wages. When the economy does well, it helps those who live below the poverty line, but this isn’t the case.

Conclusion:

The reason why the US should raise the minimum wage is that they want to make sure that those who are struggling can all have a better life. Their benefits and health will also increase since this will boost their spending power and enable them to pay for school supplies, increasing their education. Furthermore, raising the minimum wage would not cause inflation as it would cut spending by a business that generates fewer jobs and more people out of work.