should minimum wage be increased essay

September 8, 2024

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No More Lies: The Truth About Raising the Minimum Wage

“I budget and budget, and I still can’t really buy no food,” explained Carolyn Allen, a 58-year-old minimum wage worker at Hartsfield-Jackson Atlanta International Airport. She dreams of paying her medical bill and still being able to afford Pine-Sol or bleach to clean her house. Other minimum wage workers, like Laugudria Screven Jr. , resort to earning income other ways — in Screven’s case, by selling his blood plasma twice a week. The strategy leaves him feeling drowsy and weak, but allows him to afford rent and approximately one meal a day.

The United States has a long, contentious history surrounding the minimum wage. Opponents of raising the minimum wage argue that most minimum wage workers are teens working their first jobs, that raising the minimum wage will kill businesses or jobs or that raising the minimum wage will have no effect at all on purchasing power because of the resulting increase in inflation. However, the arguments against raising the minimum wage range from disingenuous to objectively false. It’s time to raise the minimum wage.

The “Minimum Wage” is More Minimal Today than Ever

The United States minimum wage originated with the Fair Labor Standards Act of 1938 (FLSA), which also set overtime pay and child labor restrictions. The contemporary opposition to the FLSA foreshadowed the current arguments against raising the minimum wage. The FLSA’s opponents claimed that the president was creating a “tyrannical industrial dictatorship” and that businesses would not be able to provide any jobs if they had to cope with “everlastingly multiplying governmental mandates” and “multiplying and hampering Federal bureaucracy.”

These doomsday predictions proved untrue: the minimum wage did indeed impact the nature and distribution of employment, but industries did not buckle. At the time, two of the most low-paying industries in the South were the textile industry and the lumber industry. Southern textile mills did see a slight decrease in employment, but northern textile mills — which had paid slightly more than the southern textile mills prior to the institution of the FLSA — saw an employment increase of approximately equal magnitude . The lumber industry in the South and throughout the U.S. saw an increase in employment after the passage of the FLSA. Notably, other independent variables shifted in both industries: the textile industry had been trending to more automation prior to the bill, while the lumber industry was trending to a more labor-heavy resource base. Overall, the minimum wage leveled no industries and granted many workers a higher wage.

Over time, the minimum wage has slowly crept higher with increased inflation and productivity. However, this growth has not kept pace with other market factors, eroding the real value of the minimum wage.

Today, the real value of the minimum wage is 31 percent less than the real (adjusted for inflation) minimum wage in 1968, and 17 percent less than the real minimum wage in 2009. If minimum wage growth had tracked the growth in workers’ productivity since 1968, the minimum wage would be $18.42 , more than double the federally mandated minimum wage. For comparison, productivity since 1973 has increased 74.4 percent , while average hourly compensation has increased just 9.2 percent . As of 2020, the federally mandated minimum wage of $7.25 for non-exempt workers is not enough to lift a family of two above the poverty line.

The slow growth of wages in comparison to productivity is not universal: the top 1% of workers saw their wages grow 138% since 1979, while the bottom 90% saw their wages grow 15% in the same time period. In 1965, the typical CEO earned 20 times what the typical worker did, while in 2013, the typical CEO earned 296 times the typical worker’s salary.

Increasing the Minimum Wage Would Promote Health and Well-Being

Raising the minimum wage pays social dividends that stretch beyond any debate about the discrepancies between workers’ wages and CEO’s wages.

First, workers who are affected by a minimum wage increase see immediate and significant health benefits for themselves and for society. A study conducted in 2011 found that blue-collar workers in states with higher minimum wage rates are much less likely to have untreated medical needs, as they are better able to afford care. Particularly in a country prone to global pandemics, an individual’s health can quickly become a community’s health: workers who leave illnesses untreated put everyone around them at risk. Additionally, an increased minimum wage corresponds to a lower smoking rate . Low-income workers currently make up 75 percent of smokers, but reducing the stress of poverty allows them to quit. Other studies have found that a higher minimum wage correlates with fewer teen pregnancies and less teenage alcohol consumption .

Second, children disproportionately benefit from increasing the minimum wage. Across the United States, 28.2% of children have a parent affected by increasing the federal minimum wage to $9.80, and even more have a parent who would be affected by a higher minimum wage hike. In 2017, a study conducted by the School of Public Policy at Georgia Institute of Technology found that a minimum wage increase of just $1 would reduce reports of child neglect by 9.6%. “Money matters,” said Lindsey Rose Bullinger , co-author of the study, “when caregivers have a more disposable income, they’re better able to provide a child’s basic needs such as clothing, food, medical care, and a safe home. Policies that increase the income of the working poor can improve children’s welfare, especially younger children, quite substantially.” Bullinger’s study did not have enough data to determine if an even higher minimum wage would result in even fewer cases of child neglect, but Bullinger noted , “our findings point in that direction.” Infants also benefit from increasing the minimum wage: the American Journal of Public Health estimated that between 2,800 and 5,500 premature deaths in New York City alone could have been prevented if the minimum wage was $15 an hour rather than $7 an hour. That figure constitutes approximately 8.33% of all of the premature deaths in New York City.

Opponents of raising the minimum wage frequently argue that minimum wage jobs are intended for teenagers working entry-level jobs, and that a minimum wage raise would needlessly benefit teens living at home and working for pocket money. However, this argument defies reality.

In California, 96 percent of workers who would benefit from the proposed minimum wage increase to $15 are over the age of 20, and 58 percent are over the age of 30. These numbers hold nationwide: the average age of an impacted worker would be 35 , and 51 percent of those affected would be 30 years of age or older. Only 13 percent of those impacted would be 20 or younger. On average, these affected workers earn half of their family’s income, and the majority of them work full time .

Historically marginalized communities are the most likely to benefit from a minimum wage hike: in California, workers earning less than $15 per hour are 55 percent Latino or Latina , while the general population of workers is only 38 percent Latino or Latina . Nationally, about 40 percent of all black workers’ wages would increase, and more than half of workers who would be affected by a minimum wage increase are women. While 19 percent of families nationwide have incomes that are less than twice the national poverty line, 50 percent of workers who would benefit from a minimum wage increase come from these families.

Increasing the Minimum Wage Won’t Decrease Employment

Carry on a conversation about minimum wage for more than twenty minutes, and inevitably, an opponent of raising the minimum wage will inform you, often with a condescending tone, that any Econ 101 student knows that raising the minimum wage will cost jobs. Many introductory economics courses do, in fact, teach a simple theory that raising the minimum wage will reduce employment. According to this theory, as the minimum wage rises, employers will be willing to employ fewer workers, since their salaries will be more expensive.

The argument is far too simplistic to drive real-world policy for the world’s largest economy. The argument incorrectly assumes a fantasy textbook-“perfect” market. A “perfect” market has many buyers and sellers, no market power, no differences between the goods sold by each firm, and perfectly even information for buyers and sellers. (In a labor market, the “buyers” are employers, and the “sellers” are employees who are selling their time and effort.) Unsurprisingly, the US labor market is not a “perfect” market, so the opponents of increasing the minimum wage unwittingly make two huge, unjustified assumptions: first, that the demand for labor is not fixed, and second, that the wage employers pay without government intervention is the equilibrium wage.

The first assumption — that demand for labor is not fixed — describes a phenomenon known as elasticity. When a demand curve is very elastic, the buyers respond to a slight increase in the price of the good —in this case, the wage —by dramatically reducing how much of the good they consume. However, if a demand curve is very inelastic , the buyers will buy the same amount of the good with little regard to how much it costs. The demand for labor in the United States tends to be elastic if and only if: (1) the product being produced has a high price elasticity of demand, meaning that people will buy a lot less of it if it costs slightly more; (2) other factors of production can replace the labor; (3) the supply of other factors of production can be purchased or used at higher levels without their prices rising; (4) if the labor costs are a large percentage of the costs of production. While some industries fall under these categories, many do not and would therefore not be likely to see a large shift in the amount of labor demanded.

The second assumption — that wage employers pay the equilibrium wage — ignores the existence of “labor monopsonies.” A “monopsony” is a market with only one buyer — in terms of employers, it is a market with only one (or very few) employers. In the United States, economics experts have become increasingly worried that the US market has become filled with monopsonies . Rural U.S. localities in particular often have only one or two main, large employers. These employers are free to create a “race to the bottom” on wages — since there are far more workers than jobs, the dominant employer can start a reverse bidding war among job seekers, where desperate people compete with each other for work, and accept lower and lower wages. To keep wages low and desperation for employment high, these companies can limit the number of jobs to perpetuate the competition, ensuring high profit margins for themselves. However, a fixed reasonable minimum wage prevents companies from creating this desperate downward spiral and encourages them to employ a greater number of employees. In other words, monopsonies tend to employ fewer workers and pay them less when left to their own devices than they would if they were required to pay a minimum wage. In monopsony labor markets, a minimum wage would increase employment.

Of course, our Nation is made up of diverse regions, with widely varying local economies. Viewing the U.S. as a whole, would a minimum wage increase result in less employment, more employment or the same amount of employment? Setting aside politically-motivated soundbites and editorials, the economic consensus suggests that a modest increase in the minimum wage likely won’t reduce employment and may even increase it. Some estimates found that increased economic activity from a minimum wage increase to $9.80 hourly would generate 100,000 new jobs . Other economists found no reduction in employment. In 2010, Dube, Lester, and Reich studied the time period between 1990 and 2006 and found no evidence of any job losses due to minimum wage increases in industries identified as “high impact” (predominantly restaurants and retail jobs). In 2013, the same economists conducted a similar study focused on teens, and found no impact on their employment, either. A 2014 study by Hoffman agreed that teen employment was also not impacted . In 2014, Dube and Zipperer conducted a study using a newly created control group approach, and came to the same conclusion . In 2009, Addison, Blackburn, and Cotti conducted yet another study and concluded that if they accounted for general trends, they did not find any evidence of job loss due to the minimum wage in retail or restaurant sectors. Of course, some survey methods have found more significant job losses, so it’s worth looking at what has actually occurred in jurisdictions that did raise their minimum wage. A study conducted by professors at the University of California, Berkeley, and the Center of Wage and Employment Dynamics found that the minimum wage hikes in Chicago, Washington, Oakland, San Francisco, San Jose, and Seattle, had not caused “ significant employment losses ” but had caused “ positive and statistically significant earnings effects. ”

Increasing the Minimum Wage Will Benefit Small Businesses

Opponents to raising the minimum wage frequently invoke small businesses, arguing that raising the minimum wage will kill the local businesses and tip the market in favor of mega-corporations. However, if that’s true, someone forgot to tell the owners of small businesses — a study conducted by the American Sustainable Business Council found that 61 percent of small business owners across the US support raising the minimum wage. In some parts of the country, the number is even higher — it reaches 67 percent in the Northeast — and the lowest support, in the South, still reaches 58 percent . Republican pollster Frank Lutz found that 80 percent of business executives in companies of varying sizes support a minimum wage increase to some degree.

So, why do so many businesses support increasing the minimum wage?

They know that raising the minimum wage offers business a number of benefits. First, employees who are paid a higher wage tend to be more productive due to morale improvements, better health, less absenteeism and reduced “decision fatigue.” The Center for American Progress also found that raising the minimum wage causes reduced employee turnover . Employee turnover is expensive: replacing low-wage workers costs about 16% of the employee’s annual salary.

Second, the worker-productivity benefits center mostly around a given business and the wages it pays its customers. However, business owners also have reason to advocate for a minimum wage increase across the entire market. Consumers who suddenly earn more also spend more, driving up proceeds for businesses. This assertion makes logical sense: people living below or close to the poverty line frequently forgo products they wish they could afford, but with more income, they will likely purchase those products. In practice, past minimum wage increases have indeed resulted in a boost in consumer spending. A minimum wage increase to $5.85 per hour in 2007 generated an additional 1.7 billion dollars in consumer spending and a minimum wage increase in 2008 to $6.55 per hour generated an additional 3.1 billion dollars in consumer spending.

Gina Schaefer, owner of a collection of small hardware stores, notes , “When the minimum wage rises, it puts money in the pockets of those who most need to spend it, from paying the rent to buying more groceries to picking up lightbulbs, tools, and paint from the local hardware store. A higher minimum wage means more money circulating in the economy. It’s a virtuous cycle: our employees shop at other businesses and their employees shop at ours.”

Why then don’t small businesses simply increase wages on their own, without waiting for the Federal Government to intervene? Many do, and they benefit from it. But if a Federally-mandated increase is absent, others fear they will be undercut by competition.

Minimum Wage Does Not Mean Minimum Prices

Finally, opponents of increasing the minimum wage point to their own wallets: I don’t want to pay more for goods and services, so please don’t pay employees more .

But while economists concur that raising the minimum wage will likely cause prices of some goods and services to rise —so long as the raise is moderate, it will impact prices only slightly. And certainly raising the minimum wage will not cause prices to rise so much that the minimum wage hike was “useless,” as some detractors contend.

For example, studies conducted by economists at California State University, San Bernardino, found that prices of impacted goods and services increase only 0.36 percent for every 10 percent increase in the minimum wage. Therefore, raising the minimum wage does indeed allow low-income workers to afford a wider range of purchases, even if the prices have increased very slightly. For example, if a worker for $7.25 an hour receives a 10% pay raise to $7.98 an hour, they can expect a good that cost $7.30 before the minimum wage increase to cost just $7.32 after the minimum wage hike. Even with that slight price increase, the worker is vastly better off.

The United States has a long history of treating the free market as holy and rebelling against any form of government intervention. However, when big businesses and their pocket politicians advocate for keeping the minimum wage below a living wage, they aren’t just swindling their workers and damaging the economy: they’re swindling you, even if you aren’t working for minimum wage. They’re creating a less healthy, less productive, less solvent population and they’re relying on social welfare programs to pay their workers for them. Small businesses don’t benefit; workers don’t benefit. It’s time to stop pretending they do, and time to get serious about raising the federal minimum wage.

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Published in Opinion

economic inequality
economic reform
minimum wage

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Works Cited

Babic, Mary, et al. “6 Simple Reasons We Should Raise the Minimum Wage Right Now”. The Politics of Poverty, 15 Feb. 2019, politicsofpoverty.oxfamamerica.org/2019/02/6-simple-reasons-we-should-raise-the-minimum-wage/.
Doyle, Alison. “Should the Minimum Wage Be Raised?” The Balance Careers, The Balance Careers, 15 July 2019, www.thebalancecareers.com/pros-and-cons-of-raising-the-minimum-wage-2062521.
“Pros and Cons of Raising Minimum Wage”. Toggl, toggl.com/pros-and-cons-of-raising-minimum-wage/.
“Raise the U.S. Minimum Wage”. Los Angeles Times, 18 July 2019. Sirsissuesresearcher, explore.proquest.com/sirsissuesresearcher/document/2285121088?accountid=44669. Accessed 4 Nov. 2019.
Smith, Lisa. “The Minimum Wage: Does It Matter?” Investopedia, Investopedia, 12 Aug. 2019, www.investopedia.com/articles/07/minimum_wage.asp.

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Fact Sheet | Wages, Incomes, and Wealth

Why the U.S. needs a $15 minimum wage : How the Raise the Wage Act would benefit U.S. workers and their families

Fact Sheet • January 26, 2021

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This fact sheet was updated February 19 with a new section on tipped workers .

The federal minimum hourly wage is just $7.25 and Congress has not increased it since 2009. Low wages hurt all workers and are particularly harmful to Black workers and other workers of color, especially women of color, who make up a disproportionate share of workers who are severely underpaid. This is the result of structural racism and sexism, with an economic system rooted in chattel slavery in which workers of color—and especially women of color—have been and continue to be shunted into the most underpaid jobs. 1

This fact sheet was produced in collaboration with the National Employment Law Project .

The Raise the Wage Act of 2021 would gradually raise the federal minimum wage to $15 an hour by 2025 and narrow racial and gender pay gaps. Here is what the Act would do:

Raise the federal minimum wage to $9.50 this year and increase it in steps until it reaches $15 an hour in 2025. 2
After 2025, adjust the minimum wage each year to keep pace with growth in the median wage, a measure of wages for typical workers.
Phase out the egregious subminimum wage for tipped workers, which has been frozen at a meager $2.13 since 1991. 3
Sunset unacceptable subminimum wages for workers with disabilities employed in sheltered workshops and for workers under age 20.

The benefits of gradually phasing in a $15 minimum wage by 2025 would be far-reaching, lifting pay for tens of millions of workers and helping reverse decades of growing pay inequality.

The Raise the Wage Act would have the following benefits: 4

Gradually raising the federal minimum wage to $15 by 2025 would lift pay for 32 million workers—21% of the U.S. workforce .
Affected workers who work year round would earn an extra $3,300 a year —enough to make a tremendous difference in the life of a cashier, home health aide, or fast-food worker who today struggles to get by on less than $25,000 a year.
A majority (59%) of workers whose total family income is below the poverty line would receive a pay increase if the minimum wage were raised to $15 by 2025.
A $15 minimum wage would begin to reverse decades of growing pay inequality between the most underpaid workers and workers receiving close to the median wage, particularly along gender and racial lines. For example, minimum wage increases in the late 1960s explained 20% of the decrease in the Black–white earnings gap in the years that followed, whereas failures to adequately increase the minimum wage after 1979 account for almost half of the increase in inequality between women at the middle and bottom of the wage distribution. 5
A $15 minimum wage by 2025 would generate $107 billion in higher wages for workers and would also benefit communities across the country. Because underpaid workers spend much of their extra earnings, this injection of wages will help stimulate the economy and spur greater business activity and job growth .

Raising the minimum wage to $15 will be particularly significant for workers of color and would help narrow the racial pay gap.

Nearly one-third (31%) of African Americans and one-quarter (26%) of Latinos would get a raise if the federal minimum wage were increased to $15. 6
Almost one in four (23%) of those who would benefit is a Black or Latina woman.
African Americans and Latinos are paid 10%–15% less than white workers with the same characteristics, so The Raise the Wage Act will deliver the largest benefits to Black and Latino workers: about $3,500 annually for a year-round worker. 7
Minimum wage increases in the 1960s Civil Rights Era significantly reduced Black–white earnings inequality and are responsible for more than 20% of the overall reduction in later years. 8

The majority of workers who would benefit are adult women—many of whom have attended college and many of whom have children.

More than half (51%) of workers who would benefit are adults between the ages of 25 and 54; only one in 10 is a teenager.
Nearly six in 10 (59%) are women.
More than half (54%) work full time.
More than four in 10 (43%) have some college experience.
More than a quarter (28%) have children.

The Raise the Wage Act follows the lead of the growing number of states and cities that have adopted significant minimum wage increases in recent years, thanks to the ‘Fight for $15 and a union’ movement led by Black workers and workers of color.

Since the Fight for $15 was launched by striking fast-food workers in 2012, 9 states representing approximately 40% of the U.S. workforce —California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, Virginia, and the District of Columbia— have approved raising their minimum wages to $15 an hour . 10
Additional states—including Washington, Oregon, Colorado, Arizona, New Mexico, Vermont, Missouri, Michigan, and Maine—have approved minimum wages ranging from $12 to $14.75 an hour . 11

Not just on the coasts, but all across the country, workers need at least $15 an hour today .

Today, in all areas across the United States, a single adult without children needs at least $31,200—what a full-time worker making $15 an hour earns annually—to achieve a modest but adequate standard of living. 12 By 2025, workers in these areas and those with children will need even more, according to projections based on the Economic Policy Institute’s Family Budget Calculator . 13
For example, in rural Missouri, a single adult without children will need $39,800 (more than $19 per hour for a full-time worker) by 2025 to cover typical rent, food, transportation, and other basic living costs.
In larger metro areas of the South and Southwest—where the majority of the Southern population live—a single adult without children will also need more than $15 an hour by 2025 to get by: $20.03 in Fort Worth, $21.12 in Phoenix, and $20.95 in Miami.
In more expensive regions of the country, a single adult without children will need far more than $15 an hour by 2025 to cover the basics: $28.70 in New York City, $24.06 in Los Angeles, and $23.94 in Washington, D.C.

Workers in many essential and front-line jobs struggle to get by on less than $15 an hour today and would benefit from a $15 minimum wage.

Essential and front-line workers make up a majority (60%) of those who would benefit from a $15 minimum wage. 14 The median pay is well under $15 an hour for many essential and front-line jobs; examples include substitute teachers ($13.84), nursing assistants ($14.26), and home health aides ($12.15). 15
More than one-third (35%) of those working in residential or nursing care facilities would see their pay increase , in addition to home health aides and other health care support workers.
One in three retail-sector workers (36%) would get a raise, including 42% of workers in grocery stores.
More than four in 10 (43% of) janitors, housekeepers, and other cleaning workers would benefit.
Nearly two-thirds (64%) of servers, cooks, and other food preparation workers would see their earnings rise by $5,800 on a year-round basis.
Ten million workers in health care, education, construction, and manufacturing would see a raise —representing nearly one-third (31%) of the workers who would see a raise.

Phasing out the egregiously low $2.13 minimum wage for tipped workers would lift pay, provide stable paychecks, and reduce poverty for millions of tipped workers.

There are 1.3 million tipped workers throughout the country who are paid as little as $2.13 per hour because Congress has not lifted the federal tipped wage in 30 years. Another 1.8 million tipped workers receive wages above $2.13, but still less than their state’s regular minimum wage. 16
Seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have already eliminated their lower tipped minimum wage . In these “one-fair-wage” states, tipped workers in these states are paid the same minimum wage as everyone else before tips. 17 For restaurant servers and bartenders, take-home pay in one-fair-wage states is 21% higher, on average, than in $2.13 states.
Having a lower minimum wage for tipped jobs results in dramatically higher poverty rates for tipped workers. In states that use the federal $2.13 tipped minimum wage, the poverty rate among servers and bartenders is 13.3%—5.6 percentage points higher than the 7.7% poverty rate among servers and bartenders in one-fair-wage states. 18
Eliminating the lower tipped minimum wage has not harmed growth in the restaurant industry or tipped jobs. From 2011 to 2019, one-fair-wage states had stronger restaurant growth than states that had a lower tipped minimum wage—both in the number of full-service restaurants (17.5% versus 11.1%) and in full-service restaurant employment (23.8% versus 18.7%). 19

Growing numbers of business owners and organizations have backed a $15 minimum wage.

In states that have already approved $15 minimum wages, business organizations representing thousands of small businesses have endorsed a $15 minimum wage.
Business groups that have endorsed a $15 minimum wage include Business for a Fair Minimum Wage, 20 the American Sustainable Business Council, 21 the Patriotic Millionaires, 22 the Greater New York Chamber of Commerce, 23 the Long Island African American Chamber of Commerce, 24 and others.
Growing numbers of employers have responded to pressure from workers and raised their starting pay scales to $15 or higher. These include retail giants Amazon, 25 Whole Foods 26 (owned by Amazon), Target, 27 Walmart, 28 Wayfair, 29 Costco, 30 Hobby Lobby, 31 and Best Buy; 32 employers in the food service and producing industries, such as Chobani, 33 Starbucks, 34 Sanderson Farms (Mississippi), 35 and the Atlanta-area locations of Lidl grocery stores; 36 health care employers including Michigan’s Henry Ford Health System 37 and Trinity Health System, 38 Ohio’s Akron Children’s Hospital 39 and Cincinnati Children’s Hospital Medical Center, 40 Iowa’s Mercy Medical Center and MercyCare Community Physicians, 41 Missouri’s North Kansas City Hospital and Meritas Health, 42 and Maryland’s LifeBridge Health; 43 insurers and banks such as Amalgamated Bank, 44 Allstate, 45 Wells Fargo, 46 and Franklin Savings Bank in New Hampshire 47 ; and tech and communications leaders such as Facebook 48 and Charter Communications. 49

Our economy can more than afford a $15 minimum wage.

Workers earning the current federal minimum wage are paid less per hour in real dollars than their counterparts were paid 50 years ago . 50
Businesses can afford to pay the most underpaid worker in the U.S. today substantially more than what her counterpart was paid half a century ago. 51
The economy has grown dramatically over the past 50 years, and workers are producing more from each hour of work, with productivity nearly doubling since the late 1960s . If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be over $20 an hour today . 52

Research confirms what workers know: Raising wages benefits us all.

High-quality academic scholarship confirms that modest increases in the minimum wage have not led to detectable job losses . 53
After the federal minimum wage was raised to its highest historical peak in 1968, wages grew and racial earnings gaps closed without constricting employment opportunities for underpaid workers overall. 54
Comprehensive research on 138 state-level minimum wage increases shows that all underpaid workers benefit from minimum wage increases, not just teenagers or restaurant workers. 55
Multiple studies conclude that total annual incomes of families at the bottom of the income distribution rise significantly after a minimum wage increase. 56 Workers in low-wage jobs and their families benefit the most from these income increases, reducing poverty and income inequality.
By providing families with higher incomes, minimum wage increases have improved infant health and also reduced child abuse and teenage pregnancy . 57

An immediate increase in the minimum wage is necessary for the health of our economy.

Raising the minimum wage now will tilt the playing field back toward workers who have dangerous jobs and little bargaining power during the pandemic. 58
Providing underpaid workers with more money will directly counter the consumer demand shortfall during this recession. 59
Even the Congressional Budget Office’s 2019 study of the impact of raising the federal minimum wage to $15 by 2025 clearly showed that the policy would raise incomes of underpaid workers overall and significantly reduce the number of families in poverty. 60

Low wages threaten the economic security of workers and their families, who then turn to social benefits programs to make ends meet.

In states without laws to raise the minimum wage to $15, nearly half (47%, or 10.5 million) of families of workers who would benefit from the Act rely on public supports programs in part because they do not earn enough at work. 61
These workers and their families account for nearly one-third of total enrollment in one or more public supports programs. 62
In states without a $15 minimum wage law, public supports programs for underpaid workers and their families make up 42% of total spending on Medicaid and CHIP (the Children’s Health Insurance Program), cash assistance (Temporary Assistance for Needy Families, or TANF), food stamps (Supplemental Nutrition Assistance Program, or SNAP), and the earned income tax credit (EITC), and cost federal and state taxpayers more than $107 billion a year . 63

Notes and Sources

This fact sheet is an update of Why America Needs a $15 Minimum Wage , published by EPI and the National Employment Law Project, February 2019.

Unless otherwise indicated, the figures presented in this fact sheet come from a forthcoming EPI analysis of the 2021 Raise the Wage Act .

1. Kate Bahn and Carmen Sanchez Cumming, “ Four Graphs on U.S. Occupational Segregation by Race, Ethnicity, and Gender ,” Washington Center for Equitable Growth, July 1, 2020.

2. The analysis is based on the 2021 Raise the Wage Act.

3. Sylvia Allegretto and David Cooper, Twenty-Three Years and Still Waiting for Change: Why It’s Time to Give Tipped Workers the Regular Minimum Wage , Economic Policy Institute, July 2014.

4. Estimated effects of the 2021 Raise the Wage Act throughout this fact sheet are from a forthcoming Economic Policy Institute analysis of the legislation and include benefits for both directly affected workers (those who would otherwise earn less than $15 per hour in 2025) and indirectly affected workers (those who would earn just slightly above $15 in 2025).

5. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021); David Autor, Alan Manning, and Christopher L. Smith, “ The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment ,” American Economic Journal: Applied Economics 8, no. 1 (January 2016).

6. See also Laura Huizar and Tsedeye Gebreselassie, What a $15 Minimum Wage Means for Women and Workers of Color , National Employment Law Project, December 2016.

7. For racial/ethnic wage gaps, see Appendix Table 1 of Elise Gould, State of Working America Wages 2019 , Economic Policy Institute, February 2020.

8. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021).

9. Alina Selyukh, “ ‘Gives Me Hope’: How Low-Paid Workers Rose up Against Stagnant Wages ,” National Public Radio’s All Things Considered , February 26, 2020; Kimberly Freeman Brown and Marc Bayard, “ Editorial: The New Face of Labor, Civil Rights is Black & Female ,” NBC News, September 7, 2015; Amy B. Dean, “ Is the Fight for $15 the Next Civil Rights Movement? ” Al Jazeera America , June 22, 2015.

10. Economic Policy Institute calculation using Current Employment Statistics data from the Bureau of Labor Statistics. Values calculated using the listed states’ share of total U.S. nonfarm employment in calendar year 2019 (prior to the COVID-19 pandemic). For recent minimum wage changes, see the Economic Policy Institute Minimum Wage Tracker, https://www.epi.org/minimum-wage-tracker/ . We include the District of Columbia in this list even though it is not a state.

11. Yannet Lathrop, Impact of the Fight for $15: $68 Billion in Raises, 22 Million Workers , National Employment Law Project, November 2018.

12. Based on calculations from the Economic Policy Institute’s Family Budget Calculator , which measures the income a family needs to attain a secure yet modest standard of living in all counties and metro areas across the country.

13. Congressional Budget Office projections for the consumer price index were applied to the Economic Policy Institute’s Family Budget Calculator .

14. Economic Policy Institute analysis of the legislation, forthcoming.

15. Bureau of Labor Statistics, Occupational Employment Statistics, May 2019 National Occupational Employment and Wage Estimates United States (online database).

16. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

17. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

18. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

19. Quarterly Census of Employment and Wages, 2011–2019.

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21. Business for a Fair Minimum Wage, “ Federal Business for a Fair Minimum Wage—$15: Signatories List in Formation ,” accessed January 22, 2021.

22. Patriotic Millionaires, “ Endorsed Bill: The Raise the Wage Act ,” accessed January 22, 2021.

23. Greater New York Chamber of Commerce, “ Celebrating Juneteenth ,” June 18, 2020.

24. Kate King, “ New York Boosts Minimum Wage and Some Businesses Balk ,” Wall Street Journal , January 4, 2021.

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27. Melissa Repko, “ Target Raises Minimum Wage to $15 an Hour Months Before its Deadline ,” CNBC , June 17, 2020.

28. Michael Grothaus, “ Walmart Is Giving 165,000 Employees a Pay Raise Between $15 and $30 per Hour ,” Fast Company , September 18, 2020.

29. Lucia Maffei, “ Wayfair Sets $15 Minimum Wage for All U.S. Workers ,” MassLive , January 8, 2021.

30. Sarah Nassauer and Micah Maidenberg, “ Costco Raises Minimum Wage to $15 an Hour ,” Wall Street Journal , March 6, 2019.

31. Hobby Lobby, “ Hobby Lobby Raises Minimum Wage ” (press release), September 14, 2020.

32. Gillian Friedman, “ Best Buy to Join Retailers Paying a $15 Minimum Wage ,” New York Times , July 22, 2020.

33. Chobani, “ Chobani Increases Employees’ Starting Wage to at Least $15/Hour ,” (PR Newswire release), Vending Marketwatch , October 30, 2020.

34. Janine Puhak, “ Starbucks to Raise Minimum Wage to $15 for US Employees over Next Three Years ,” WDRB.com , December 12, 2020.

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36. Kara McIntyre, “ Lidl to Raise Atlanta-Area Starting Pay to $15 An Hour ,” Patch (Atlanta, Ga.), January 5, 2021.

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38. Michael Kransz, “ Michigan Health System with 8 Hospitals Increases Minimum Wage to $15 an Hour ,” MLive.com , October 19, 2020.

39. Betty Lin-Fisher, “ Akron Children’s Hospital to Raise Its Minimum Wage to $15 ,” Akron Beacon Journal , October 3, 2019.

40. Kelly Gooch, “ Ohio Children’s Hospital to Boost Minimum Pay for 3,000 Employees ,” Becker’s Hospital Review , October 3, 2019.

41. Michaela Ramm, “ Mercy Announces Minimum Wage Increase, General Pay ,” The Gazette , December 22, 2020.

42. North Kansas City Hospital, “ North Kansas City Hospital and Meritas Health Raise Minimum Base Wage ,” December 21, 2020.

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45. Amanda Mull, “ Corporations’ Social Crusades Often Leave Out Workers ,” The Atlantic , June 28, 2019.

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47. Scott Souza, “ Franklin Savings Bank Raises Minimum Wage in NH To $15 ,” Patch (Merrimack, N.H.), October 31, 2019.

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49. Charter Communications, “ Charter Statement Regarding Plans to Permanently Raise Minimum Wage to $20/Per Hour over Next Two Years for All Hourly Employees ,” April 6, 2020.

50. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

51. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

52. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

53. Paul J. Wolfson and Dale Belman, “ 15 Years of Research on U.S. Employment and the Minimum Wage ,” Tuck School of Business Working Paper no. 2705499, 2016.

54. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021).

55. Doruk Cengiz, Arindrajit Dube, Attila Lindner, and Ben Zipperer, “The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator,” Quarterly Journal of Economics 134, no. 9 (May 2019).

56. Arindrajit Dube, “ Minimum Wages and the Distribution of Family Incomes ,” American Economic Journal: Applied Economics 11, no. 4 (October 2019); Kevin Rinz and John Voorheis, “ The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data .” U.S. Census Bureau Center for Administrative Records Research and Applications Working Paper 2018-02, 2018.

57. George L. Wehby, Dhaval M. Dave, and Robert Kaestner, “Effects of the Minimum Wage on Infant Health,” Journal of Policy Analysis and Management 39, no. 2 (Spring 2020); Kerri M. Raissian and Lindsey Rose Bullinger, “Money Matters: Does the Minimum Wage Affect Child Maltreatment Rates?” Children and Youth Services Review 72 (January 2017); Lindsey Rose Bullinger, “The Effect of Minimum Wages on Adolescent Fertility: A Nationwide Analysis,” American Journal of Public Health , March 2017.

58. Peter Dorman and Lawrence Mishel, “ A Majority of Workers Are Fearful of Coronavirus Infections at Work, especially Black, Hispanic, and Low- and Middle-income Workers ,” Working Economics Blog (Economic Policy Institute), June 16, 2020.

59. Cristian Alonso, “ Beyond Labor Market Outcomes: The Impact of the Minimum Wage on Nondurable Consumption ,” Journal of Human Resources , forthcoming.

60. Ben Zipperer, “ Low-Wage Workers Will See Huge Gains from Minimum Wage Hike, CBO Finds ,” Working Economics Blog (Economic Policy Institute), July 9, 2019.

61. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

62. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

63. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

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Reasons Why Minimum Wage Should Be Raised Essay: Benefits for Workers, Society, and The Economy

The minimum wage controversy has been among the most discussed and argued issues for many years. Those in favor of raising the minimum wage argue that the increased income would enable low-wage workers to better their lives, reduce poverty and income disparity, as well as bring an economic boost. On the contrary, many opponents of raising the minimum wage contend that it will cause job losses and lead to higher prices.

This essay, written by a custom essay company , can help you understand the topic. By examining the evidence and arguments from both sides of the debate, we can gain a better understanding of the potential impact of raising the minimum wage and make informed decisions about public policy in this area.

My Thoughts on Should Minimum Wage Be Raised Essay

The minimum wage has long been a contentious issue in the United States, with opinions divided on whether it should be increased or left at its current level. Those in favor of increasing the minimum wage argue that it would help to alleviate poverty, reduce income inequality, and stimulate economic growth. However, opponents of a minimum wage hike suggest that it could lead to job losses, inflation, and reduced economic competitiveness.

Nevertheless, by considering the potential benefits and drawbacks of increasing the minimum wage, I would like to to provide a comprehensive analysis of this complex issue and help readers come to an informed opinion.

Reduction of Poverty and Inequality

One of the most compelling reasons for raising minimum wage is the reduction of poverty and inequality. According to the Economic Policy Institute, raising the minimum wage to $15 per hour could lift 1.3 million workers out of poverty and reduce income inequality. This is because low-wage workers, who are often from marginalized communities, rely on minimum wage jobs to support themselves and their families. By increasing the minimum wage, their income would increase, allowing them to meet their basic needs, such as food, housing, and healthcare.

Boost in Consumer Purchasing Power

Increasing the minimum wage would also lead to a boost in consumer purchasing power. When low-wage workers earn more, they are more likely to spend more, which would stimulate the economy. For instance, a report by the National Employment Law Project estimated that raising the minimum wage to $15 per hour would generate an additional $118 billion in economic activity over a five-year period.

Improved Health Outcomes

Low-wage workers often cannot afford basic healthcare services, which can lead to serious health consequences. By raising the minimum wage, workers would have access to better healthcare services, which would lead to improved health outcomes. This is because when low-wage workers have better health, they are more productive, which benefits both the employer and the employee.

Reduced Reliance on Social Services

Low-wage workers often rely on social services such as food stamps, housing subsidies, and Medicaid to make ends meet. By raising the minimum wage, workers would be able to earn enough to support themselves and their families without having to rely on social services. This would reduce the burden on taxpayers and enable the government to allocate resources to other areas of need.

Encourages Workforce Productivity and Loyalty

By paying workers a fair wage, they are more likely to be productive and loyal to their employer. This is because they feel valued and appreciated, which leads to higher job satisfaction and engagement. Additionally, when workers are paid a fair wage, they are less likely to leave their jobs, which can reduce the costs associated with hiring and training new employees.

While there are differing opinions on the impact of raising the minimum wage, there is evidence to support the many benefits that come with increasing it. Raising the minimum wage can help to reduce poverty and income inequality, boost consumer purchasing power, improve health outcomes, and reduce reliance on social services.

Furthermore, paying workers a fair wage can lead to increased productivity, loyalty, and job satisfaction. While there may be some initial costs associated with raising the minimum wage, the long-term benefits can outweigh them. As society moves forward, it is important to consider the potential impact of increasing the minimum wage and work towards a more equitable and just society where all workers are paid a fair wage for their labor.

Through thoughtful policy-making and continued advocacy, we can ensure that the benefits of raising the minimum wage are realized for workers, society, and the economy as a whole.

Tips on Writing Why Should Minimum Wage Be Raised Essay

The issue of minimum wage has become a hotly debated topic in recent years, with advocates calling for an increase in the minimum wage to address issues of poverty and inequality. If you are passionate about this topic and want to share your views, writing an essay on why minimum wage should be raised can be a great way to do so. However, to make your essay stand out, it’s important to approach it with a clear and well-structured argument. Here are some tips on how to write an excellent essay on why minimum wage should be raised, so you can effectively convey your ideas and contribute to the ongoing discussion around this important issue.

Research the Topic

Before you start writing a raising minimum wage essay, it is important to research the topic and gather as much information as possible. This will help you to understand the various arguments and counter-arguments related to the minimum wage. Use reputable sources, such as academic journals, government reports, and news articles, to gather information.

Develop a Strong Thesis Statement

A thesis statement is the backbone of your essays on raising minimum wage and sets the tone for the rest of your writing. Make sure your thesis statement is clear, concise, and reflects your stance on the topic. A strong thesis statement might read: “Raising the minimum wage is necessary to reduce poverty and inequality, boost the economy, and provide workers with a fair living wage.”

Support Your Argument with Evidence

To write an opinion article , you need to support your claims with evidence. Use statistics, data, and examples to illustrate your points and provide evidence for your claims. For example, you might use data to show that raising the minimum wage has led to increased consumer spending in other countries, or you might cite research that shows how low wages can lead to poor health outcomes.

Address Counter-Arguments

When writing about a contentious topic like the minimum wage, it is important to address counter-arguments. Acknowledge the other side’s point of view and provide evidence to counter their claims. This will help you to build a more persuasive argument and show that you have considered all sides of the issue.

Use Clear and Concise Language

Your essay should be easy to read and understand. Use clear and concise language to communicate your ideas effectively. Avoid using jargon or technical language that might confuse your reader. Make sure to proofread your work carefully to catch any spelling or grammar errors that could detract from your argument.

By following these tips, you can develop a compelling argument that supports your position and addresses counter-arguments.

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Understanding the Minimum Wage

Pros of Raising
Cons of Raising

The Bottom Line

Macroeconomics

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

J.B. Maverick is an active trader, commodity futures broker, and stock market analyst 17+ years of experience, in addition to 10+ years of experience as a finance writer and book editor.

The minimum wage is the lowest hourly rate that an employer can pay an employee according to law. Many states have minimum wages in place. But the federal minimum wage hasn't increased since 2009, despite many attempts to do so. The discussion around increasing the minimum wage brings both pros and cons.

As of January 2024, Washington had the highest state minimum wage rate at $16.28 per hour. Washington, D.C. has the highest rate overall at $17.00 an hour.

There's also a federal minimum wage at $7.25 an hour. Employers must pay minimum wage employees whichever rate is higher, so if the federal rate is higher than the state rate, an employee gets the federal minimum wage. The same is true if the state rate is higher.

Minimum wage laws have been in effect in the United States since 1938 when the first federal rate was set at $0.25 per hour. Amendments were made to the Fair Labor Standards Act (FLSA) since then, increasing the base rate of pay for many hourly workers according to inflation.

Key Takeaways

Despite efforts to raise the minimum wage, no bill has successfully passed both chambers of Congress.
Proponents of raising minimum wages argue that changes are needed to help incomes keep pace with increasing costs of living, and a higher minimum wage will lift millions out of poverty.
Opponents of raising the minimum wage believe that higher wages could lead to inflation, make companies less competitive, and result in job losses.

As noted above, the term minimum wage refers to the legally established lowest amount that employers are required to pay their employees for their work. It serves as a baseline wage that is intended to ensure that workers receive fair compensation for their labor, covering basic living expenses and preventing the exploitation of low-wage workers.

The primary purpose of minimum wage is to provide workers with a level of income that allows them to meet their essential needs. It acts as a safeguard against extremely low wages and helps reduce poverty and income inequality within a society. By setting a minimum wage, governments aim to promote decent working conditions and provide a degree of economic security for workers.

National and sub-national government entities analyze several factors when considering whether to raise or maintain the current level of minimum wage. As the general increase in prices over time, inflation can erode purchasing power . Economic conditions such as the state of the economy may call for adjusted labor market dynamics. Social equity considerations may call for more livable wages. Regardless of the consideration, there are various reasons to support and detract from raising the minimum wage.

On Oct. 24, 1938, the first minimum hourly wage was put into effect. The wage rate was $0.25 per hour.

Pros of Raising the Minimum Wage

The primary argument advanced in favor of raising the minimum wage is that higher earnings would improve the overall standard of living for minimum wage workers by providing them with a more appropriate income level to handle the cost of living increases.

A 2022 study by the Congressional Budget Office analyzed the macroeconomic impact of the standard minimum wage reaching $15 per hour in 2027. The data reported that 10.9 million workers would be directly affected, while an additional 9.2 million workers would potentially be affected. The total directly or potentially affected workers by 2032 would surpass 23 million.

While some proponents of raising the minimum wage estimate that a much larger number of individuals and families will move out of poverty if they earn more money, a related potential benefit is a projected reduction in the need for federal and state government expenditures on financial aid for poor and low-income individuals.

Meanwhile, an intangible benefit that could translate into tangible benefits for both companies and employees is improved employee morale resulting from higher wages. Business owners frequently note the challenge of providing sufficient encouragement to spur workers to put maximum effort into their job duties, and that this is particularly problematic with low-wage workers who feel that their job efforts aren't keeping them out of poverty.

Increasing employee morale could easily translate into more tangible benefits, such as increased employee retention and reduced hiring and training costs. Employees who are more inclined to stay with a company longer could benefit from greater advancement and an overall reduction in job-related relocation expenses .

A boost to economic growth is another potential advantage of increasing the minimum wage, as consumer spending typically increases along with wages. A higher minimum wage would put more discretionary dollars in the pockets of millions of workers; money that would then flow to retailers and other businesses.

Lawmakers have tried to raise the federal minimum wage on many occasions. The U.S. House of Representatives passed an amended version of the Raise the Wage Act of 2019 in July of that year to gradually increase the federal minimum wage to $15 an hour by 2025. But the bill died in the Senate. President Joe Biden tried to increase the rate for federal contract workers to $15 per hour, but that motion was blocked by a U.S. district judge in September 2023.

Cons of Raising Minimum Wage

Among the disadvantages of increasing the minimum wage is the probable consequence of businesses increasing prices, thus fueling inflation .

Opponents argue that raising the minimum wage would likely result in wages and salaries increasing across the board, thereby substantially increasing operating expenses for companies that would then increase the prices of products and services to cover their increased labor costs.

Increased prices mean a general increase in the cost of living that could essentially negate any advantage gained by workers having more dollars in their pockets.

Though the current federal minimum wage in the U.S. is $7.25 per hour, 30 states and D.C. have approved higher minimum wages.

Another projected problem resulting from an increased minimum wage is that of potential job losses. Many economists and business executives who point out that labor is a major cost of doing business argue that businesses will be forced to cut jobs to maintain profitability.

The same 2022 study mentioned above by the Congressional Budget Office also analyzed how higher wages may result in the elimination of roles. By 2027, the CBO estimated that up to 1.6 million jobs would be lost. By 2032, this would increase to 1.9 million lost jobs.

One potentially negative impact that is less readily apparent is the possibility that a higher minimum wage would result in increased labor market competition for minimum wage jobs.

The net outcome of an increased minimum wage might be a large number of overqualified workers taking minimum wage positions that would ordinarily go to young or otherwise inexperienced workers. This could impede younger, less experienced entrants to the job market from obtaining work and gaining experience to move their careers forward.

How Does Minimum Wage Affect the Economy?

The impact of minimum wage on the economy is a complex issue. Supporters argue that increasing minimum wage can stimulate consumer spending and boost the overall economy by putting more money in the hands of low-wage workers. Critics, on the other hand, warn that higher labor costs might lead to job cuts, automation, and increased prices for goods and services.

Is Minimum Wage the Same for All Workers?

No, minimum wage laws often take into account different categories of workers. For example, there might be different minimum wage rates for adult workers, minors, or workers in specific industries. Tipped employees, like servers in restaurants, may also have a lower minimum wage due to the expectation of receiving tips .

Does Inflation Impact Minimum Wage?

Yes, inflation can erode the purchasing power of minimum wage over time. To address this, some governments index minimum wage to inflation rates. This means that the minimum wage is adjusted periodically to ensure that its real value remains relatively constant.

How Does Minimum Wage Affect Small Businesses?

The impact of minimum wage increases on small businesses can vary. Some small businesses might struggle to absorb the additional labor costs, potentially leading to layoffs or reduced hours. Others might adapt by increasing prices or finding operational efficiencies to mitigate the impact.

Do All Countries Have Minimum Wage Laws?

While minimum wage laws are prevalent in many countries, not all nations have implemented such legislation. The presence and level of minimum wage often depend on a country's economic structure, labor policies, and social priorities.

Raising the federal minimum wage to $15 an hour is a policy goal for many lawmakers. Increasing the minimum wage is expected to lift individuals out of poverty and improve work ethic, however, it also comes with many possible negative implications, such as inflation and a loss of jobs.

U.S. Department of Labor. " State Minimum Wage Laws ."

U.S. Department of Labor. " Minimum Wage ."

U.S. Department of Labor. " History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938-2009 ."

Congressional Budget Office. " How Increasing the Federal Minimum Wage Could Affect Employment and Family Income ."

The Brookings Institution. " How Family Sustaining Jobs Can Power an Inclusive Recovery in America’s Regional Economies ."

Berkeley Political Review. " No More Lies: The Truth About Raising the Minimum Wage ."

U.S. Congress. " H.R. 582 - Raise the Wage Act ."

Reuters. " Biden's $15 minimum wage for federal contractors blocked by US judge ."

U.S. Department of Labor. " Consolidated Minimum Wage Table ."

Congressional Budget Office. " The Budgetary Effects of the Raise the Wage Act of 2021 ," Page 8.

U.S. Department of Labor. " Questions and Answers About the Minimum Wage ."

Pew Research Center. " The U.S. Differs From Most Other Countries in How it Sets Its Minimum Wage ."

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To Fight Poverty, Raise the Minimum Wage? Or Abolish It?

The minimum wage has stagnated at $7.25 an hour for more than a decade. is increasing it to $15 the best way to fight poverty.

[MUSIC PLAYING]

Today on The Argument, what’s the downside to paying people more? [MUSIC PLAYING] Among the most popular and blunt tools to fight poverty is a minimum wage, but it doesn’t actually do that. Because if you have a full-time job that pays the federal minimum wage of $7.25, you’re only making about $15,000 a year, not enough to rent a one-bedroom apartment in 95% of counties in the United States. Raising the federal minimum to $15 an hour is something progressives have been fighting for for years. They came close this month, but an amendment to raise the minimum wage was ultimately removed from Biden’s COVID relief bill. Is raising the minimum wage or having one at all the right way to battle poverty? I’m Jane Coaston, and I think it’s past time to raise the minimum wage. It’s not a way station for 16-year-olds. For millions of Americans, including parents with small children, it’s how they make ends meet. More people across the political spectrum are beginning to support a higher minimum wage, but it does have opposition. So I’ve invited two guests who are on different sides of the debate. Saru Jayaraman is the president of One Fair Wage and director of the Food Labor Research Center at the University of California Berkeley. Jeff Miron is the head of undergraduate and graduate economic studies at Harvard and head of economics at the Cato Institute. [MUSIC PLAYING]

Hi, Saru. Thanks so much for joining.

Thank you so much for having me.

And hey, Jeff, thanks so much for being here.

My pleasure. Thank you.

Here’s what I want to get out of this conversation. I want to have this conversation in two pieces. First, I want to talk specifically about the $15 minimum wage, hear both of your positions, and then get into what the arguments for and against a wage hike are. And then I want to zoom out and talk about raising the minimum wage as part of an overall suite of policies aimed at lifting people out of poverty. We’re going to go over some other options and talk about what’s actually being considered and what’s actually possible. So Saru, what’s your position on the $15 minimum wage?

So I think it’s important to understand the full scope of what’s being proposed. The Raise the Wage Act not only would raise the minimum wage to $15 an hour over several years, but it would also eliminate the sub-minimum wage for tipped workers, which is literally a legacy of slavery, the sub-minimum wage for workers with disabilities, which is a direct reflection of the valuation of people with disabilities, and youth. The current federal minimum wage is $7.25 for all workers and $2.13 an hour for tipped workers, and it is cents — literally less than $1 — for workers with disabilities. Our position is, of course, that that is not just low, it actually creates severe poverty, economic instability. It has created just horrific suffering during the pandemic. With — in the case of the sub-minimum wage for tipped workers, it’s also been a source of horrific sexual harassment because you have a largely female workforce living off of tips as a portion of their base wage, and that $15 is actually the minimum that’s necessary to live, particularly given that this workforce of minimum wage workers are adults. Median age is in the 30s. They have children, and they are struggling to survive, often working multiple jobs on these poverty wages. So we strongly support phasing in the raise of the minimum wage over time.

Jeff, where do you stand on this issue?

So I’m opposed to raising the minimum wage to $15 an hour. I’m, in fact, opposed to government mandating any minimum wage at all.

You wrote in 2014 that the right minimum wage is not $10.10 or $7.25. It’s zero. Why?

For a bunch of reasons. First of all, the minimum wage is trying, mainly, to tackle an issue of people having low income. But it does not address, the people with the lowest income, namely, people who don’t have jobs in the first place. It’s raising the wage of people who are already employed who may have low or very low income, but they’re not the poorest members of society. In my view, government anti-poverty efforts should be focused exactly on the people who are the worst off. Minimum wage is very poorly targeted for doing that because it starts off by only affecting people who are employed who have jobs. Secondly, it’s going to, in some instances, have a very perverse effect if you’re trying to raise the wages, even if we accept that it’s focused on a group of people that have jobs. It’s going to cause employers to lay off some people or hire fewer people or work more unpleasant hours or cut other benefits or do various things that are going to make those jobs bad for some of the people that you’re trying to help, OK? In the case where it causes employers to hire fewer people, some people go from having a low wage to having a zero wage. That seems a very crude way of trying to alleviate poverty, even if the minimum wage has only a modest effect in reducing employment. There’s a huge, long controversy in economics about that. The bulk of the evidence does suggest there is a negative effect on employment, especially if you were to double the minimum wage, as is being proposed currently. But it may have other negative effects, such as raising the prices of the goods and services that these employers provide. That also is a regressive step, not a progressive step.

I’m just going to cut you off there because I really want to put this to Saru. Last month, the Congressional Budget Office put out a report on the impact of a $15 minimum wage, and it showed that a gradual increase to a $15 minimum wage could add $54 billion to the deficit, if you’re worried about that kind of thing. I know deficit spending — we don’t talk about that anymore. It’s not a thing. I don’t even know who she is. But it could also eliminate 1.4 million jobs because, as Jeff said, that could be added prices for food. That could be added prices in a lot of spaces that low-income people and all-income people might need. What’s your response to that?

You know, the press reported on that Congressional Budget Office report in a way that, I think, caused most people not to actually read the report. The actual CBO report, what it said is that we don’t know what the impact on jobs could be. The impact on jobs could actually be anywhere from 0 to close to 3 million jobs. We have no idea. And that 1.4 million number was an intermediate between zero and close to three. In fact, we looked at the seven states that require what we call one fair wage, a full minimum wage with tips on top, including California, which has passed a $15 minimum wage and full elimination of the sub-minimum wage for tipped workers. Those seven states — and by the way, they’re not all blue states. If you look at those states that have raised the minimum wage, those seven states, in particular for the restaurant industry — we looked at from 2011 to 2016 — we saw that those states actually had higher job growth rates in the restaurant industry. They all actually have the same or higher growth rates in the restaurant industry, in terms of jobs, as the rest of the country. And so it just hasn’t borne out in the seven states that got rid of the sub-minimum wage for tipped workers. It just hasn’t borne out in the evidence. In fact, the states with the highest wages have had the highest job growth rates in the restaurant industry. So what do they do when they get a minimum wage increase? They spend it, the economy is boosted, and more jobs are created. I also want to speak to the menu price issue because we’ve also studied this a lot. Actually, we’ve compared restaurants — the same restaurants, chains — in California compared to all other states, and the menu prices are exactly the same. These are publicly-traded companies. They wouldn’t undercut themselves. They wouldn’t grow in a state like California if they weren’t profitable.

Jeff, what do you think? Because I think that issue of, if you pay people more money, they have more money, they spend more money, that makes sense to me.

My best answer is that money came from some place. But let me also take a step further back, which is if you tell employers they have to pay a higher wage for some of their employees, what are the things that could happen? They could say, OK, that’s fine. I’ll just make less profits, OK? Or they could say, I’m going to reduce that kind of employment and substitute with higher-skilled people. I could substitute machinery for some of the less-skilled labor that I was paying this lower minimum wage at. They could raise their prices. It’s unlikely that they’re just going to do nothing and absorb that profit loss. They’re going to respond in some way, shape, or form, and all of those things make those markets less efficient, OK? It means that you’re distorting the decisions about whether to use, in producing a particular good or service, low-skilled labor or to substitute with a machine. Somebody is paying for it. It’s either reduced profits — OK, but then the business owners are going to respond in ways which try to recoup that, many of which are going to make those workers worse off, or at least undo some of the benefit they got from the higher wages, such as by adjusting their hours in ways that workers don’t like, cutting benefits, and all those sorts of things. So we can’t just give people more money without saying where we’re taking it from and then what the cost of that is and what the effects of that are going to be.

I’m thinking about not necessarily minimum wage jobs, but we’ve all heard of or even had jobs where in exchange for getting paid more, there is an expectation that, like, yes, you make more money, but you’re supposed to work far more hours. The expectations change. If that’s true for jobs I’ve had, this sounds like it would also be true for minimum wage positions. Wouldn’t, as Jeff said, companies just find another way to exploit workers? If they’re paying them more, they could hire fewer people or force them to do different and worse labor.

Now, I would totally agree with Jeff that, yes, this does come from somewhere. This is why I fundamentally cannot agree with the idea that there can’t be a minimum wage. Because employers, corporations, businesses need to pay their fair share of the cost and the value of the labor that they’re profiting from. That is a concept that we, as a country, decided on when we ended slavery in the United States of America. We decided, as a country, morally, that we believe employers should pay for the value of the labor that they are profiting from. Now, in the restaurant industry in particular, at emancipation, the restaurant lobby did not want to pay for the value of their labor, and so they mutated tipping from being an extra or bonus on top of the wage to becoming a replacement for wages, which by the way, before emancipation, waiters were paid a full wage. So the whole idea of employers paying for their labor is something that we, as a nation, have accepted. Now, what happens when the minimum wage goes up in the restaurant industry in California or in the states that have raised wages? They don’t necessarily just reduce jobs. That hasn’t been borne out in the data. They do actually figure out, to your point, Jeff, greater efficiencies. They figure out that when you pay people more, actually, they don’t leave you. They stay. We did a study with Cornell where we interviewed 1,100 restaurant managers, and they told us that when you raise wages, you cut the cost of employee turnover because, guess what? When you pay people more, they don’t have to keep moving and looking for different jobs. They stay with you. That’s less turnover, which costs in terms of the cost of recruitment and hiring and morale and training new people. So it actually pays off to pay people well, and that is part of the overall cost of doing business.

OK, I have to object really strongly to the notion that imposing this minimum wage is going to make businesses more efficient by reducing turnover or encouraging them to substitute capital in an efficient way. If those things were efficient, if they were profitable, the employers would have done them already. If you can reduce turnover by paying a little bit higher wage, then of course, employers will do that. And many employers do do that, precisely for the reasons you explained, but not when they’re forced to do it by the higher minimum wage. Take the example of substituting machinery for a lower-skilled employee. There’s a cost to the machinery. There’s a cost of the employees, of the wages. You make the calculation of which one is more profitable, and you do the one that makes sense. If it made sense to substitute capital, you would have done it already. OK, so I don’t think that argument is the least bit convincing, and it just doesn’t make logical sense that there’s all this profit opportunity that these big public corporations, whose sole objective in life is basically to make profits, that they’re leaving all this money on the table by not paying a wage which would get them to a more profitable outcome.

But isn’t there an argument that part of making more money is the public appearance of being a good corporate citizen? We’ve had a lot of conversations recently about big corporations attempting to position themselves on specific political issues. I’m thinking of Apple getting involved with the Religious Freedom Restoration Act about five or six years ago. Isn’t an element where, yes, there is kind of the brute capitalism, we need to make as much money as possible, but also, it can be a good business maneuver to advertise yourself as having a good corporate culture by having higher wages?

But then again, you don’t need the government to make businesses do it. If it’s good for business to do something which looks socially responsible, whether it has to do with global warming or the wages you pay or the benefits you pay, then businesses will do it on their own because the way you describe it, it’s in the interests of the business. The net effect on profits after taking account of the somewhat higher costs for wages, but having better PR, having more people like your company, et cetera, they’ll take that into account, and they’ll do it on their own.

But I do want to put that question to Saru because I live in DC, where we have a $15 minimum wage. Florida, as you mentioned, has passed one that will go into effect by 2026. New York and Seattle both have a $15 minimum wage. So if you have private businesses that are saying, it’s a good idea for us to look good on this particular front by having a higher minimum wage, if you have cities and states that are making these decisions, why do we need the federal government to set a higher minimum wage for all?

So the truth is that we’re talking about giving people a very basic floor that would allow them to survive, allow them to get off of public assistance, allow them to feed their families when they work full time or more than full time. Look, here’s the problem with the argument Jeff is making of let’s just leave it entirely to the market, let’s have no minimum wage at all. If it were, efficient companies would do it. Well, guess what? There are lots of things companies do that are inefficient, that are based on their biases, their desires, their opinions. Racism and racial discrimination is not actually market efficient. So it is not entirely always efficiency that drives employer choices. And to the point of publicly-traded companies and if it were so great to pay people more, why wouldn’t they do it? I’ll tell you why. It’s because publicly-traded companies look at quarterly returns. And so there are a ton of efficiencies that arise from paying the minimum wage. The problem is that the publicly-traded corporations aren’t able to see it because they are so focused on short-term gains. So the problem with not having a federal minimum wage is that you leave the states with the highest populations of people of color at the lowest wages, and that exacerbates racial inequity in our country.

I want to focus on one thing that Saru said, which is that I’m arguing for leaving everything to the market. I haven’t said this yet, but I want to make clear that the argument against the minimum wage is not an argument against the social safety net. It’s an argument that the minimum wage is a terrible way of trying to have a social safety net. The libertarian view, my view, is that if you want to make poor people less poor, you should give them money via mechanisms like food stamps, housing assistance, universal basic income because those provide people with income without distorting private markets and without having the ancillary negative consequences that the minimum wage has. So they’re separate questions. One question is whether to help people who are not in a good financial position. The other question is how. My position is that the minimum wage is a terrible way in which to do it because it has all these ancillary side effects and because it doesn’t very successfully target the poorest people, whereas a universal basic income does explicitly target the very poorest people.

I do just have to address what Jeff said about leaving it to the market. You’re not saying leave it entirely to the market, but you are saying leave wages to the market, which means —

Yes, I am saying that.

— an employer could pay — meaning an employer could pay zero if they want to.

No, because people wouldn’t work for zero.

Well, people are working for zero right now, Jeff —

If employers have all this power, why don’t they set a zero wage?

Can I finish my point, please?

I apologize.

So actually, there are restaurant owners right now requiring workers to live off of tips. It’s illegal. Workers often don’t complain because they are scared to. They face retaliation. They are very vulnerable. They are women. They are people of color. And during the pandemic, these workers who receive zero dollars an hour could not get a dime of unemployment insurance because they were forced to live off of tips. And here’s the basic problem with having it rely entirely on government programs, social safety nets — some really big problems with that. One, workers want to be able to work and feed their families with their earnings. These workers, as well, want the dignity of being able to work in their profession — and these are professions — and not have to rely on government assistance, which is heavily stigmatized, difficult to access. And they want that dignity of being able to be paid. So you, Jeff, are asking taxpayers to cover these people’s livelihoods. But what I’m saying is that employers have to pay their fair share. They have to cover the value of their labor, of the people who are doing the work that brings them profit. [MUSIC PLAYING]

Hi, Jane. This is Reggie from Brooklyn. And the thing I’ve been arguing about with my friends and employer is whether we should use nuclear power to reach our climate goals. I think nuclear energy is the cleanest, most reliable way to bridge the gap between where we are now and our hopefully zero-carbon future in the time we have left.

What are you arguing about with your family, your friends, your frenemies? Tell me about the big debate you’re having in a voicemail by calling 347-915-4324, and we might play an excerpt of it on a future episode. So Jeff, you’ve said something that really interested me earlier, as a libertarian, is that you talked about the social safety net and the idea that we don’t need to raise the minimum wage. What we do need are better ways to support the poor that aren’t that, so talking about improving welfare programs. But you’ve mentioned two ideas in other work that you’ve done, the negative income tax and expansion of the earned-income tax credit. Now, I think for many people, they may have heard of the earned-income tax credit, but can you explain what the negative income tax would look like?

So a negative income tax, which is, in all important ways, the same as a universal basic income, says that everybody is guaranteed a certain amount of income per quarter or per year, some basis like that. And then they face some tax rate on all income earned. The simplest way to describe it, which doesn’t feel right to many people, is to say we send a check for $5,000 to every single person, including Bill Gates and, you know, Warren Buffett, but we then impose taxes. So if you have no income of your own, you receive that $5,000 per year, and that’s your total net income. If you earn $10,000 and there’s a 30% tax rate, you would get the $5,000 directly from the government plus the $10,000 you’ve earned, minus the $3,000 you would owe in taxes. You never owe any taxes on the universal basic income, on the negative income tax. So the idea is we put a floor on the amount of income that every single person has. And it gradually, as you earn income that didn’t come from the government, you pay taxes on that. But nobody will ever have any income below that floor that the government creates.

So what you’re saying here is that employers who make big profits, whether that’s a Walmart or McDonald’s or even a, like, company that’s doing really well in Washington DC, like a brewery, like the one that is being loud near my apartment, they do not have the responsibility to redistribute money. But the government — the federal government — through this program could redistribute money. They could send out checks for $5,000 to every American. Why do employers not have that responsibility but the government does? That seems — I’m confused.

It’s basically a practical answer that if the government does it in roughly the way I described, it’s consistent. It applies to everyone. It happens sort of year after year after year because it’s a government policy that’s in place and it continues, unless Congress changes its mind. But trying to get private employers to do it ends up mainly enriching private employers or some sectors relative to others. The housing industry gets richer than it would otherwise be because the government is subsidizing the building of housing projects. Certain farmers get richer than they would otherwise be because the government subsidizes food stamps. The transferring income to people approach doesn’t create any special favors for this industry versus that. It doesn’t allow you to go to Washington and lobby them to produce the — more of the goods and services that your industry produces because that’s allegedly helping poor people. It avoids all the inefficiencies created by having a centrally planned — central planner dictate what’s produced and how firms behave. If I could go back to one thing that Saru said, she said several times, we agreed, when we ended slavery, that we owe everyone a fair wage.

I don’t remember — or something like that.

We agreed that employers need to pay for the value of their labor, that they don’t get to —

When did we agree that?

That’s not in the Constitution. That’s not in a federal law.

Because we said —

Who agreed to that?

Because we said that employers should not be able to use free labor. That is what slavery was.

No, they should not be able to coerce free labor.

We agreed, as a country —

Outlawing slavery is not saying that someone can’t offer you a teeny wage and you agree to accept it. It’s saying that you can’t, using physical force, make people work for you for nothing.

And I would argue that because of the forced options that most people in this country on the minimum wage have, they are forced into very low-wage jobs, that their life situations have forced them into low-wage jobs that don’t give them the opportunities. When you’re working two and three jobs, you don’t actually have the time to go to college and get a degree and move up the ladder. So let me just say, one thing you said, Jeffrey, is just plain wrong. The idea that food stamps have not actually created inefficiencies and have not bred an industry or a sector that has profited off of food stamps is just plain wrong. The data shows that, actually, Walmart has profited quite a bit from food stamps. They —

That’s exactly my point.

OK, yeah, so —

I completely agree. That’s what I was saying. I totally agree with it.

Yeah, so Saru, like, the idea would be that you would have something that look kind of like Alaska’s Permanent Fund, which sends everyone in Alaska a check, or a dividend of some sort, which is that if you sent everyone in America a $5,000 check — everyone, every single person — and had that instead of food stamps, which as Jeff said, he argues have massive inefficiencies, you could wipe — use that instead of those programs. I’m interested to see your thoughts on that.

Yeah, my point is that we know, from situations like that, inefficiencies still will occur, even when people are given those checks. Because again, people at the lower end of the income spectrum have to spend those checks to survive on things like rent, which goes to developers, and food, which goes to grocery stores. There still will be inefficiencies. But here’s the bottom line. Employers — by doing that, by just providing everybody with $5,000, you completely remove any responsibility from employers to actually pay for, again, the people that are allowing them to create profit. The people who work for them generate the actual profit. And so employers should have the responsibility, rather than just taxpayers —

So I am saying that the employer should not bear this responsibility. I think it ends up being an incredibly inefficient way to try to accomplish the goal. I completely accept that some people have been forced by the conditions of the market and their luck and misfortunes of whatever their circumstances are to have very few opportunities, and I accept that there are people who have terrible circumstances. But I think the best way to do it is not by trying to make the employers responsible for it but letting their employers be responsible for maximizing efficiency and producing the most. First, that gives you the biggest economic pie available to redistribute to the people who deserve it, and they are not completely absolved because they pay taxes.

Not anymore.

No matter what the structure of the business taxes, they are ultimately paid by people, and the people are paying taxes that supports the transfers to those people who are deemed deserving by society’s judgments.

Saru, I noticed that you laughed a little bit when he talked about big corporations paying taxes. But I want to get at something. We appear to agree that there are, in our current system, a lot of inefficiencies that are bad. And we’re in a situation, and it is a situation, Jeff, as a libertarian, in which you are often in, which is that no one agrees with us and no one listens to us. No Republicans support raising the minimum wage to $15 an hour, so what are some other alternatives that could get us closer to poverty mitigation that could work with what we currently have in Congress, where we’re dealing with Democrats who are saying, we are supportive of raising the minimum wage, but the Republicans who are in Congress are not the people who are interested in thinking about poverty mitigation the same way we’re — you know, they’re not talking about a UBI. They are talking about tax cuts. When you’re thinking about either making the case for raising the minimum wage to Republicans or thinking about other ideas for poverty mitigation, where do you go?

So one thing that, actually, we have been able to agree with on — with some libertarians and Republicans is that we do need to reduce people’s dependence on public assistance, actually. And it is shown that raising the minimum wage reduces people’s dependence on food stamps, on other forms of public assistance. So raising the minimum wage reduces the burden on the taxpayer, on the government by allowing employers to pay their fair share and then reducing people’s dependence on public assistance. That is one area that we have in common with some Republicans.

Let me say a few things. First, I don’t want to leave the impression that libertarians advocate adding a universal basic income on top of the current social safety net. Libertarians think that if we could replace the existing social safety net with the universal income, that is plausibly an improvement. But many libertarians would still have severe qualms about the existing generosity of the current social safety net. They would say there might be — maybe there’s a role for some. It probably shouldn’t be federal. It should be left to states. It should probably be less generous — just so I don’t mislead. But on your question of what other things can be done to help people who are poor, libertarians have a few things that they emphasize quite a bit, which is repeal of regressive regulation. Lots of regulations are especially bad for poor people. This includes land-use regulation, which makes it hard for people to afford housing because you restrict the density of buildings, the heights of buildings, building more in inner cities. That forces people with lower incomes to live farther away, to have longer commutes, to have less access to jobs, to stores, and so on. Similar issues with occupational licensing, has effects of two kinds. One, it keeps relatively poor people from entering certain professions because they have to spend money or spend time getting degrees in order to practice those occupations. At the same time, those licensing restrictions raise the cost of the goods in those occupations of the — being produced by those occupations. And that, of course, has a bigger negative effect on people who are poor. And there are lots of other examples. Childcare regulation is another good one. There’s tons of regulation of childcare. Whom does that harm especially? Poor mothers, OK, who can’t easily afford daycare and be able to hold jobs because of the regulation, which raises costs so much.

Saru, I’m going to guess that you probably don’t think that these ideas should replace the fight for the $15 minimum wage and my efforts to join us all on one side of the argument. Eh, a little quixotic. But what’s your what’s your last point on this particular issue? Because I think that I agree with Jeff, the occupational licensing issue is particularly interesting because of how, in my own personal experience, it hinders African-American business owners. For instance, you can get into a very weird place with the licenses you need to do African hair braiding. But what is it about the $15 minimum wage that makes it your central issue and the central issue for this conversation?

The current debate is how much should the minimum wage be and should it apply equally to everybody in this country. And so therefore, 32 million Americans would get a raise from a $15 minimum wage. And by eliminating sub-minimum wages, we reduce racial inequity, legacies of slavery, and severe gender discrimination and harassment.

I just want to thank both of you so much for joining me. Saru Jayaraman is the president of One Fair Wage, a group that advocates for raising wages and working conditions for restaurant service workers. She’s also director of the Food Labor Research Center at the University of California Berkeley. Thank you so much for joining me.

Jeff Miron is a senior lecturer at Harvard and director of economic studies at the Cato Institute, a libertarian think tank based in Washington DC. Thank you for joining me, Jeff.

My pleasure. Thank you for having me. [MUSIC PLAYING]

If you want to learn more about the minimum wage, I recommend reading the full report from the Congressional Budget Office published in February about what Biden’s bill to raise the minimum wage $15 an hour would actually mean for jobs and the economy. And for the policy wonks — I know who you are — I also recommend the Bureau of Labor Statistics’ February report on the characteristics of minimum wage workers. You can find links to both of these reports in our episode notes. Finally, some of you called in with your own stories about student loan debt after last week’s episode.

Hi, my name is Kendra. I’m an African-American woman who graduated from George Washington University in 1997. My experience has been chronic oppression due to student loan debt accompanied by low to no income over several years. There should be complete forgiveness for those who have suffered such a burden. I’m Janelle from Vermont, and I have over $50,000 of student loans. There’s nothing I can do but continue to pay and hope that when I die, the remaining debt doesn’t carry on to my children.

The Argument is a production of New York Times Opinion. It’s produced by Phoebe Lett, Elisa Guttierez, and Vishakha Darbha, edited by Alison Bruzek and Paula Szuchman with original music and sound design by Isaac Jones and fact-checking by Michele Harris. [MUSIC PLAYING]

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The federal minimum wage of $7.25 an hour hasn’t changed since 2009. Workers in 21 states make the federal floor, which can be even lower for people who make tips. And at $7.25 an hour, a person working full time with a dependent is making below the federal poverty line.

[You can listen to this episode of “The Argument” on Apple , Spotify , Google or wherever you get your podcasts .]

States such as California, Florida, Illinois and Massachusetts have approved gradual minimum wage increases to reach $15 an hour — so is it time to do it at the federal level?

On Wednesday 20 senators from both parties are set to meet to discuss whether to use their influence on minimum wage legislation.

Economists have argued for years about the consequences of the hike, saying employers who bear the costs would be forced to lay off some of the very employees the minimum wage was intended to support. A report by the Congressional Budget Office on a proposal to see $15 by 2025 estimates the increase would move 900,000 people out of poverty — and at the same time cut 1.4 million jobs.

[ Instagram Live : Watch host Jane Coaston and Kara Swisher discuss whether we need to raise the minimum wage .]

On today’s episode, we debate the fight for $15 with two people who see things very differently. Saru Jayaraman is the president of One Fair Wage and the director of the Food Labor Research Center at the University of California, Berkeley. Jeffrey Miron is a senior lecturer in the department of economics at Harvard University and the director of economic studies at the Cato Institute.

Mentioned in this episode:

The Congressional Budget Office’s February 2021 report on the budgetary effects of the Raise the Wage Act of 2021.

The U.S. Bureau of Labor Statistics’ April 2020 report “Characteristics of Minimum Wage Workers.”

(A full transcript of the episode will be available midday on the Times website.)

Thoughts? Email us at [email protected] or leave us a voice mail message at (347) 915-4324. We want to hear what you’re arguing about with your family, your friends and your frenemies. (We may use excerpts from your message in a future episode.)

By leaving us a message, you are agreeing to be governed by our reader submission terms and agreeing that we may use and allow others to use your name, voice and message.

“The Argument” is produced by Phoebe Lett, Elisa Gutierrez and Vishakha Darbha and edited by Alison Bruzek and Paula Szuchman; fact-checking by Michelle Harris; music and sound design by Isaac Jones.

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Should We Raise The Minimum Wage?

Cardiff Garcia

Stacey Vanek Smith

Should We Raise the Minimum Wage?

Burr vs Hamilton. The Celtics vs the Lakers. Godzilla vs King Kong. To this list of famous rivalries you can now add: advocates of raising the minimum wage to 15 dollars an hour... versus opponents of raising it.

We have been watching economists duke it out on social media and in their papers, arguing for and against the idea. This is a topic where things can get heated, but it's also a really important and nuanced debate.

To show what's at stake, Stacey and Cardiff take sides on the minimum wage debate. Get ready for a fight over the minimum wage... with maximum rage!

Articles on Minimum Wage:

Characteristics of minimum wage workers (2019) , from the Bureau of Labor Statistics

How Increasing the Federal Minimum Wage Could Affect Employment and Family Income , from the Congressional Budget Office

Minimum Wages and Racial Inequality (paywall), by Ellora Derenoncourt and Claire Montialoux

Impacts of Minimum Wages: Review of the International Evidence , by Arindrajit Dube

City Limits: What do Local-Area Minimum Wages Do? , by Arindrajit Dube and Attila S. Linder

Racial Inequality and Minimum Wages in Frictional Labor Markets , by Jesse Wursten and Michael Reich

The Disparate Impact of a National $15 Minimum Wage , by Paul H. Kupiec

Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States? , by David Neumark and Peter Shirley

The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data , by Kevin Rinz and John Voorheis

The Economic Impact of a High National Minimum Wage: Evidence from the 1966 Fair Labor Standards Act , by Martha J. Bailey, John DiNardo, and Bryan A. Stuart

History of Changes to the Minimum Wage Law , from the Department of Labor

Why $15 Minimum Wage is Pretty Safe , by Noah Smith

The Minimum Wage Pushback , by Noah Smith

Minimum Wage Tracker , from The Economic Policy Institute

$15 Minimum Wage Subverts Biden Recovery Plan (paywall), by Michael R. Strain

How Can Price Theory Help Us Navigate the Minimum Wage Debate? , by Brian Albrecht

Pay Is Rising Fastest for Low Earners. One Reason? Minimum Wages. , by Ernie Tedeschi

Music by Drop Electric . Find us: Twitter / Facebook / Newsletter .

Subscribe to our show on Apple Podcasts , PocketCasts and NPR One .

minimum wage

Home — Essay Samples — Economics — Minimum Wage — Pros and Cons of Minimum Wage

Pros and Cons of Minimum Wage

Categories: Minimum Wage

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Published: Sep 12, 2023

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Introduction, pros of minimum wage, cons of minimum wage, 1. poverty reduction, 2. increased consumer spending, 3. reduced income inequality, 4. improved employee productivity and retention, 1. job loss and unemployment, 2. small business struggles, 3. inflationary pressures, 4. regional disparities.

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Politics of Poverty

6 simple reasons we should raise the minimum wage right now.

Ideas and analysis from Oxfam America's policy experts

supermarket cashier making the minimum wage

The federal minimum wage—just $7.25 an hour—hasn’t been increased in more than a decade.

It’s time to raise the minimum wage. Today, millions of Americans do arduous work in jobs that pay too little and offer too few benefits. They serve food, clean offices, care for the young and elderly, stock shelves, and deliver pizza. They work these jobs year after year while caring for children and parents, trying to save for college, and paying their bills.

But despite their best efforts, these low-wage and essential workers are falling further and further behind. The federal minimum wage of $7.25/hr is locking millions—most notably women of color and single parents—in poverty.

The way we see it, if you work hard, you should earn enough to get by. That’s why efforts to raise the federal minimum wage to $15 to help Americans across the country are so important.

Here are six simple reasons why raising the minimum wage makes sense.

1. it is long overdue.

Since it was last raised in 2009, the minimum wage has failed to keep up with inflation, failed to keep up with average wages, and—most dramatically—failed to keep up with incomes of the top 1 percent and CEOs, contributing to America’s growing inequality crisis.

As a result, low-wage workers are not benefiting from economic growth and productivity. If the minimum wage had kept pace with productivity increases, it would be around $24/hr according to the Center for Economic and Policy Research. Just 30 years ago, the average pay gap between CEOs and workers was 59 to 1; by 2018, it had soared to 361 to 1 . The average CEO at one of the top 350 firms in the US made $21.3 million in 2019 , 320 times as much as the typical worker; a minimum wage worker still makes $15,080: a gap of 1,400 to 1.

2. It would address longstanding racial and gender inequities

Historically marginalized people, who do more than their fair share of low-wage work, would stand to benefit disproportionately from the bump. (For dramatic illustration of the disparate impact of a raise, refer to Oxfam’s map of low-wage workers in the US.)

According to the data from the Economic Policy Institute, while 27 percent of the total US workforce would benefit from the raise:

39 percent of Black and Latina women would benefit (vs. 18 percent of white men);
38 percent of African American workers would benefit;
33 percent of Latino workers would benefit; and
32 percent of women workers would benefit (vs 22 percent of men).

3. It would reduce poverty

The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce— 40 million workers —would see a raise in wages.

The pandemic has made this move even more urgent, as millions have slipped into poverty over the past year, and 11 percent of adults are now facing food insecurity.

4. It would fuel economic growth

The roughly $120 billion extra paid to workers would be pumped back into the economy for necessities such as rent, food, and clothes. Economists have long recognized that boosting purchasing power by putting money in people’s pockets for consumer spending has positive ripple effects on the entire economy.

In one recent poll, 67 percent of small business owners support the minimum wage increase to $15 an hour. They say it would spark consumer demand, which would enable them to retain or hire new employees.

And raising the wage doesn’t seem to compel employers to cut jobs. As states and cities across the country have raised wages, research has found no statistically significant effect on employment .

5. It would save taxpayer money and reduce use of government programs

When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations.

In 2016, the Economic Policy Institute found that , among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-wage workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”

6. It’s what the vast majority of Americans want

Vast majorities (up to three quarters, including a majority across party lines) support raising the wage. In fact, over half the states have raised their minimum wages to restore basic fairness to the workforce.

All work has dignity and worth. We need to get our economy moving, prioritizing workers and families most impacted by the pandemic, specifically women and people of color. After more than a decade of hard work, low-wage workers deserve a bump to get them and their families out of poverty.

Find out how many people in your state would benefit from raising the minimum wage.

Should the Federal Minimum Wage Be Increased?

History of Minimum Wage

The federal minimum wage , introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt, was initially set at $0.25 per hour. The federal minimum wage has been increased by Congress 22 times, most recently in 2009 from $6.55 to $7.25 an hour. Most states plus DC have a minimum wage higher than the federal minimum wage, though several states do not have minimum wage laws (which means workers in those states default to the federal minimum wage). Read more history…

Pro & Con Arguments

Pro 1 Raising the federal minimum wage would not only allow minimum wage workers to afford basic living expenses, but would also reduce income, gender, and racial inequalities. The current minimum wage is not high enough to allow people to afford housing. According to the National Low Income Housing Coalition, “In 2022, a full-time worker needs to earn an hourly wage of $25.82 on average to afford a modest, two-bedroom rental home in the U.S. This… is $18.57 higher than the federal minimum wage of $7.25…. A full-time worker needs to earn an hourly wage of $21.25 on average in order to afford a modest one-bedroom rental home in the U.S.” [ 198 ] Further, 35% of families with full-time year-round employment do not earn enough to pay for essentials including food and childcare. 59% of Hispanic families, 52% of Black families, 25% of white families, and 23% of Asian families that work full-time year-round cannot cover basic needs. Overall, families would need to earn $11 more an hour to cover basic costs, with Black and Hispanic families needing $12 more an hour. [ 199 ] Approximately 91% of workers who would benefit from a raised minimum wage are over 20 years old, with 68% over the age of 25. Most are the primary wage earners for their families, averaging about 52% of their family’s income, and most are women and people of color. The current federal minimum wage prevents these individuals and families from meeting basic needs like shelter and food, as well as creating significant obstacles to healthcare, finances for an emergency, and other expenses such as car upkeep. [ 201 ] Thus, the unaffordability of basic needs drives income, gender, and racial inequality. Workers who have to pinch pennies do not have the money, time, or other resources to invest in more education or job training for themselves and their families, meaning they remain stuck in low-paying jobs with few to no benefits such as sick days, health insurance, or retirement plans. Minimum wage workers are then also subjected to irregular schedules that can make the rest of life, such as picking up kids from school, difficult or impossible. [ 199 ] [ 200 ] [ 201 ] [ 205 ] Increasing the minimum wage would not only bring relief to workers struggling to make ends meet, it would also raise the incomes of people who make slightly more than minimum wage. The Brookings Institution found that increasing the minimum wage would result in higher wages for the 3.7 million people earning minimum wage and up to 35 million workers who make up to 150% of the federal minimum wage. [ 28 ] The White House Council of Economic Advisors (CEA) found that an increase to just $10.10 an hour would raise wages for 28 million Americans–about nine million of those due to the ripple effect. [ 29 ] Read More

Pro 2 Raising the minimum wage to match inflation and productivity would benefit the economy by increasing consumer activity and spurring job growth while lowering the federal deficit. Because the federal minimum wage is not indexed for inflation, its purchasing power (the number of goods that can be bought with a unit of currency) has dropped considerably, hitting the lowest mark since 1956. [ 14 ] [ 15 ] [ 16 ] [ 204 ] As journalist Megan Cerullo summarizes, “The federal minimum wage of $7.25 buys less today than it has at any point over the past 66 years…. The current value of the minimum wage in real dollars is at its lowest level since February 1956, when the lowest U.S. wage was 75 cents — the equivalent of $7.19 in June 2022 dollars.” Raising the minimum wage and indexing it to inflation would ensure that low-wage workers could adopt a standard of living commensurate with the current economy. [ 204 ] Further, while the estimates of how much the minimum wage should be increased vary, many economists agree that if the wage had kept pace with rising productivity and incomes, it would be higher than the current $7.25 an hour. [14] [17] [18] [ 14 ] [ 17 ] [ 18 ] If the minimum wage matched inflation as well as worker productivity and other incomes, worker productivity would increase while employee turnover decreased. Alan Manning, Professor of Economics at the London School of Economics, explains, “As the minimum wage rises and work becomes more attractive, labor turnover rates and absenteeism tend to decline.” [ 30 ] [ 31 ] [ 32 ] [ 33 ] In turn, economic activity would increase, spurring job growth. The Economic Policy Institute stated that a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period. And economists from the Federal Reserve Bank of Chicago predicted that a $1.75 rise in the federal minimum wage would increase aggregate household spending by $48 billion the following year, thus boosting GDP and leading to job growth. [ 1 ] [ 2 ] With an economic boom and more securely employed workers, the federal deficit would decrease. According to James K. Galbraith, Professor of Government at the University of Texas in Austin, “[b]ecause payroll- and income-tax revenues would rise [as a result of an increase in the minimum wage], the federal deficit would come down.” [ 43 ] Further, raising the minimum wage would help reduce the federal budget deficit “by lowering spending on public assistance programs and increasing tax revenue. Since firms are allowed to pay poverty-level wages to 3.6 million people — 5 percent of the workforce — these workers must rely on Federal income support programs. This means that taxpayers have been subsidizing businesses, whose profits have risen to record levels over the past 30 years,” according to Aaron Pacitti, Associate Professor of Economics at Siena College. [ 42 ] Read More

Pro 3 Increasing the minimum wage would have numerous social benefits including reducing poverty and crime, and increasing school attendance and the healthy population. A 2022 Urban Institute study found that “[i]ncreasing the federal minimum wage to $15 an hour would lift 7.6 million people in the United States out of poverty.” A higher minimum wage would also reduce government welfare spending. If low-income workers earned more money, their dependence on, and eligibility for, government benefits would decrease. The Economic Policy Institute determined that by increasing the minimum wage to $10.10, more than 1.7 million Americans would no longer be dependent on government assistance programs. They report the increase would shave $7.6 billion off annual government spending on income-support programs. [ 10 ] [ 206 ] Raising the minimum wage also lifts children out of poverty, increasing their school attendance and decreasing dropout rates. One study found that raising the California minimum wage to $13 an hour would increase the incomes of 7.5 million families, meaning fewer would live in poverty. Teens who live in poverty are twice as likely to miss three or more days of school per month. The study found that “recent experimental studies show that increasing income can improve school performance.” Increasing the minimum wage would also allow teens to work fewer hours for the same amount of pay, giving them more time to study and reducing the likelihood that they would drop out of high school. Alex Smith, Assistant Professor of Economics at the United States Military Academy at West Point, found that “an increase in the minimum wage from $7.25 to $10.10 (39%)… would lead to a 2-4 percentage point decrease in the likelihood that a low-SES [socio-economic status] teen will drop out.” [ 38 ] [ 41 ] Raising the minimum wage would lead to a healthier population and prevent premature deaths. California study found that those earning a higher minimum wage would have enough to eat, be more likely to exercise, less likely to smoke, suffer from fewer emotional and psychological problems, and even prevent 389 premature deaths a year. [38] Because minimum wage workers are more likely to report poor health, suffer from chronic diseases, and be unable to afford balanced meals, “policies that reduce poverty and raise the wages of low-income people can be expected to significantly improve overall health and reduce health inequities.” [ 38 ] [ 39 ] A society with less poverty, fewer school attendance and health issues, and a higher minimum wage correlates to lower crime rates. According to one study, “higher wages for low-income individuals reduce crime by providing viable and sustainable employment… raising the minimum wage to $12 by 2020 would result in a 3 to 5 percent crime decrease (250,000 to 540,000 crimes) and a societal benefit of $8 to $17 billion dollars.” A study of crime rates and the minimum wage in New York City over a 25-year period found that “[i]ncreases in the real minimum wage are found to significantly reduce robberies and murders… a 10 percent increase in the real minimum wage results in a 6.3 to 6.9 percent decrease in murders” and a 3.4 to 3.7 percent decrease in robberies. [ 179 ] [ 181 ] Read More

Con 1 Raising the minimum wage would increase housing and consumer goods costs for everyone and greatly disadvantage minimum wage workers. In a study of minimum wage raises from 2000 to 2009, researchers found that three months after a raise, housing rents increased. Lucas Hall, founder of Landlordology.com, explains, “Raising the minimum wage causes a temporary spike in spending power… [but l]andlords raise rents as tenants are willing and able to pay more.” As a result after “rents went up in response to the increase in income, people still had some additional income compared to before. But it wasn’t as big of a surplus as people would like to think raising the minimum wage leads to,” according to Brent Ambrose, Jason and Julie Borrelli Faculty Chair in Real Estate at Pennsylvania State University. [ 73 ] [ 202 ] Plus that small surplus may end up covering the increased costs of everyday items instead of going into a savings account or paying for additional education. James Sherk, Research Fellow in Labor Economics at the Heritage Foundation, argues, “Most minimum-wage employees work for small firms in competitive markets. These companies have small profit margins. They can only pay higher wages if they raise prices. Customers—not business owners—pay that cost.” For example, NBC News found that the price of a cup of coffee went up by 10 to 20% in Oakland, California, after a 36% minimum wage hike, while coffee prices in Chicago rose 6.7% after the minimum wage rose to $10. [ 54 ] [ 203 ] Raising the minimum wage could decrease employee benefits and increase tax payments, further costing the employees. According to James Sherk, MA, Senior Policy Analyst at the Heritage Foundation, a single mother working full time and earning the federal minimum wage of $7.25 an hour would be over $260 a month worse off if the minimum wage were raised to $10.10: “While her market income rises by $494, she loses $71 in EITC [earned income tax credit] refunds, pays $37 more in payroll taxes and $45 more in state income taxes. She also loses $88 in food stamp benefits and $528 in child-care subsidies.” [ 77 ] Raising the minimum wage also creates more jobs for more skilled workers, disadvantaging teenagers, young adults, and those with less education and experience. If employers have to pay an employee more, they will expect the employee to have a more experienced skill set, essentially removing the job from the tier of jobs available to minimum wage workers. [ 48 ] This dynamic also makes it more difficult for minimum wage workers to gain upward mobility. Don Boudreaux, Adjunct Scholar at the Cato Institute, explains, “the minimum wage cuts off the first rung of the employment ladder, and it’s that first lowest paying rung that provides the skills and experience workers need to reach the next rung and to continue climbing their way to a better life.” Increasing minimum wage decreases entry-level jobs that are the “route to the top” of the job ladder. [ 66 ] [ 166 ] Read More

Con 2 Raising the minimum wage, instead of allowing the free market to determine an appropriate rate, will decrease employee compensation, while forcing businesses to close, use automation, or outsource jobs. Increasing the minimum wage increases costs for businesses. If a business cannot or will not support the increased cost, the first method of cost correction is to cut hours or lay off employees. Researchers found that “For every $1 increase in the minimum wage, …the total number of workers scheduled to work each week increased by 27.7%, while the average number of hours each worker worked per week decreased [sic] by 20.8%. For an average store in California, these changes translated into four extra workers per week and five fewer hours per worker per week — which meant that the total wage compensation of an average minimum wage worker in a California store actually fell by 13.6%.” The decrease in hours also meant erratic schedules that are difficult for employees to maintain and a decrease in eligibility for benefits such as retirement packages and healthcare. [ 205 ] If a business cannot afford to pay an appropriate amount of employees, the business may be forced to close. Jamie Richardson, Vice President of fast food chain White Castle, said that the company would be forced to close almost half its stores and let go thousands of workers if the federal minimum wage were raised to $15. Forbes reported that an increase in the minimum wage has led to the closure of several Wal-Mart stores and the cancellation of promised stores yet to open. [ 51 ] [ 52 ] Businesses that cannot or will not pay a higher minimum wage may also turn to more robots and automated processes to replace service employees. Oxford University researchers explain “robots are already performing many simple service tasks such as vacuuming, mopping, lawn mowing, and gutter cleaning” and that “commercial service robots are now able to perform more complex tasks in food preparation, health care, commercial cleaning, and elderly care.” [ 67 ] Or, businesses may choose to outsource jobs to countries where costs would be lower. According to the Statistic Brain Research Institute, 2,382,000 US jobs were outsourced in 2015 with 44% of companies saying they did so to reduce or control costs. A survey of 400 US Chief Financial Officers (CFOs) found that 70% of CFOs would “increase contracting, outsourcing, or moving actual production outside the United States” if the minimum wage were raised to $10 an hour. [ 78 ] [ 84 ] To avoid all of those problems, the free market should determine minimum wages, not the federal government. 82% of small businesses agreed that “the government should not be setting wage rates.” According to Mark J. Perry of the American Enterprise Institute, government-mandated minimum wages “are always arbitrary and almost never based on any sound economic/cost-benefit analysis… [I]n contrast market-determined wages reflect supply and demand conditions that are specific to local market conditions and vary widely by geographic region and by industry.” Perry said market-determined wages result in more employment opportunities for unskilled workers, increased profits for companies, and lower prices for the consumer. [ 74 ] [ 76 ] Read More

Con 3 Raising the federal minimum wage would exacerbate income disparities and the cycle of poverty. Cost of living varies wildly in the United States. For example, living in New York, California, and Hawaii costs significantly more than living in Mississippi, Kansas, or Montana. If the federal government raises the minimum wage significantly, the wage will be proportionately much higher in lower income states, meaning employers will not be able to afford the costs of paying employees and residents will not be able to afford the cost of living increases necessary to make up the difference. Small rural communities would especially suffer from the disparity. [ 70 ] [ 71 ] Further, a study from the Federal Reserve Bank of Cleveland found that although low-income workers see wage increases when the minimum wage is raised, “their hours and employment decline, and the combined effect of these changes is a decline in earned income… minimum wages increase the proportion of families that are poor or near-poor.” [ 47 ] [ 48 ] As explained by George Reisman, Professor Emeritus of Economics at Pepperdine University, “The higher wages are, the higher costs of production are. The higher costs of production are, the higher prices are. The higher prices are, the smaller the quantities of goods and services demanded and the number of workers employed in producing them.” Thus, raising the minimum wage would actually increase poverty among minimum wage workers. [ 47 ] [ 48 ] The increase in poverty combined with an increase in minimum wages could entice high school students with limited opportunities to drop out of school to begin earning. Students from impoverished backgrounds may also drop out of school in order to increase their family’s income. As Mark J. Perry, of the American Enterprise Institute, explains, the students are then further disadvantaged: “the attraction to higher wages from minimum wage legislation reduces high school completion rates for some students with limited skills, who are then disadvantaged with lower wages and career opportunities over the long-run if they never finish high school.” [80] [81] [82] [83] [ 80 ] [ 81 ] [ 82 ] [ 83 ] Similarly, raising the minimum wage would increase crime. According to a study by Boston College economists, increasing the minimum wage leads to reduced employment which leads to an increase in thefts, drug sales, and violent crime. Their results indicate that “crime will increase by 1.9 percentage points among 14-30 year-olds as the minimum wage increases.” Researchers found that between 1977 and 2012 increases in the minimum wage resulted in “no significant change” in the rates of violent crime or property crime. [ 182 ] [ 183 ] Read More

Did You Know?
1. America's minimum wage law was signed in 1938. The minimum wage was set at 25 cents, which is equivalent to $5.19 in 2022 dollars. [ ]
2. 44% of minimum wage earners are under 25 years old. [ ]
3. have set minimum wages above the federal minimum of $7.25 an hour. As of Jan. 12, 2023, the highest is DC, at $16.50 an hour, followed by Washington state at $15.74 an hour.
4. The federal minimum wage has been increased by Congress 22 times, most recently in 2009 from $6.55 to $7.25 an hour. [ ]
5. The first state minimum wage laws, introduced between 1912 and the early 1930s, only covered women and minors. The first to cover men was introduced in 1937 in Oklahoma. [ ]

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Research: When a Higher Minimum Wage Leads to Lower Compensation

Qiuping Yu,
Shawn Mankad,
Masha Shunko

A recent study found that one retailer slashed hours, scrambled schedules, and cut benefits after a minimum wage hike.

While proponents of increasing the minimum wage have grown increasingly vocal in the U.S., new research suggests that raising the minimum wage can actually have a significant negative impact on the total compensation of hourly workers. Researchers analyzed a detailed dataset of wage and scheduling data for more than 5,000 employees at a single national retailer, and compared outcomes for workers in California (which had several minimum wage increases during the study period) and Texas (which had zero increases). They found that in the stores that experienced a minimum wage hike, workers on average worked fewer hours per week, were less likely to qualify for benefits, and had less-consistent schedules. These factors corresponded to an average 11.6% decrease in total compensation for every $1 increase in the minimum wage. Based on these findings, the authors argue that policymakers should consider minimum wage hikes with caution, and should be sure to complement them with policies designed to ensure consistent schedules and adequate hours for workers — or risk harming the very people they’re aiming to support.

In the U.S., we’re seeing an increasing number of calls to increase the national minimum wage to $15/hour . Many states and municipalities have already passed minimum wage hikes in the last several years, and a variety of proposals are under consideration at the federal level .

QY Qiuping Yu is an assistant professor of Operations Management and Business Analytics at the Georgia Tech Scheller College of Business. Her research focuses on digital service design, workforce analytics, and socially sustainable operations. She uses and develops a broad range of methods in causal inference and machine learning. See her faculty bio here . Follow her on Twitter: @QiupingYu.
SM Shawn Mankad is an assistant professor of Operations, Technology, and Information Management at Cornell’s SC Johnson College of Business. His research focus is on developing and applying statistical methods for addressing business, economic, and policy issues. See his faculty bio here .
MS Masha Shunko is an expert in supply chain management, service operations and behavioral aspects of operational efficiency. A native of Estonia, Professor Shunko received her PhD in Operations Management from Carnegie Mellon University, and before joining the Foster School in 2015, she taught at Purdue University. She has also consulted for Microsoft, Caterpillar, JD Power, and several medical organizations, including Mayo Clinic. See her faculty bio here .

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Should the US Raise the Minimum Wage to $15 an Hour? Research Paper

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The issue of minimum wage increase has been one of the most debated in the last few years. Low-paid workers have protested against minimum wages which have not been adjusted for inflation for several years. While low-paid workers argued that meager pay practices put them on the verge of poverty, economists argued that such an increase will result in mass layoffs. Although minimum wage increase to $15 per hour may result in a lower number of vacant positions, it should be raised as it will positively affect the United States economy.

Low minimum wages cost the United States government billions of dollars. A lot of discussions are centered on the economic impact of the minimum wage increase. While minimum wage increase will, obviously, require businesses to pay their workers more and will require businesses to find new ways to compensate for increased expenditures, the economy, in general, will benefit from such an increase. While increasing the minimum wage is costly for businesses, not increasing the minimum wage is costly for the United States government.

Individuals who earn less than $18,000 a year cannot meet their basic needs and get compensated by the government (Owens par. 1). In spite of the fact that they are employed, current hourly rates are not enough to allow them to buy food, clothing, medications, and other necessary things. It is the government’s responsibility to provide competition for the poorest populations. Such compensation may come in the form of food-purchasing assistance or medical care coverage (Owens par. 4).

The United States government initiated such programs, as the Supplemental Nutrition Assistance Program (SNAP) to provide benefits for families with low income. A family living on the current minimum wage will be eligible for such program (Owens par. 4). Another issue to consider is health care. Low-income individuals cannot afford health coverage, and many of them do not pay for medical services in full. As a result, the United States government is responsible for covering these expenses. Uninsured individuals cost the United States $49 billion each year (Kennedy par. 2). Companies which pay workers less than $15 an hour simply offload their payroll expenses onto the United States government.

Raising minimum wage will reduce poverty with no significant effect on employment. Those against minimum wage increase argue that if such increase takes place, it will result in higher unemployment due to mass layoffs initiated by businesses to compensate for increased costs. The opponents of the increase argue that businesses will have no choice but to employ fewer workers. However, studies suggest that measured employment effects of minimum wage increase are very small due to a variety of factors in play (Schmitt 1). Businesses can cope with increased minimum wage through “improvements in organizational efficiency; reductions in wages of higher earners (“wage compression”); and small price increases” (Schmitt 1).

This fact means that if the minimum wage is increased, businesses will have to choice but to improve its operational performance and reduce wages of their top managers, who, sometimes, earn millions of dollars annually. While minimum wage increase has no employment response, it does help eliminate poverty. Currently, many employers pay low minimum wages simply because they can. If businesses were allowed to pay even less, some might even pay lower wages. As a result of such practice, many families are struggling financially and cannot afford many things due to the high cost of living in the United States. In order to reduce poverty, it is necessary to increase minimum wages to $15 an hour.

Since companies will be required to pay low-wage workers at least $15 an hour, more of these people will be able to afford better food and clothing, and be able to buy pharmaceuticals and offer some kind of medical coverage. By and large, businesses have no interest in keeping low-paid workers above the poverty line. Low-paid workers are typically people who lack the skills required for better jobs or a struggling financially. As such, they have no choice but to work for the minimum wage. It is the government’s responsibility to oversee the relations between the employer and employees, as it is in the government’s best interests to reduce poverty and improve the well-being of its citizens.

The issue of raising minimum wage level is a complex one and requires careful examination. While the necessity of minimum wage increase is not universally accepted, much of the opposition seems to come from business owners who are interested in keeping their profits high. The United States government has to recognize the needs of its citizens and work towards eliminating poverty and improving the quality of life. Minimum wage increase is a step forward in this direction.

Works Cited

Kennedy, Kelly. Up to $49 billion unpaid by uninsured for hospitalizations. 2011. Web.

Owens, Christine. Wal-Mart CAN afford $15 minimum wage . 2016. Web.

Schmitt, John. Why Does the Minimum Wage Have No Discernible Effect on Employment? 2013. Web.

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Editorial: The federal minimum wage of $7.25 an hour is poverty pay. It’s time to raise it

Activists in front of the U.S. Capitol hold signs calling for a $15 minimum wage

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It’s been 15 years since workers earning the federal minimum wage got a raise. The cost of living has gone up more than 45% since then, with rents and home prices rising faster than incomes in most regions of the country. Yet the nation’s wage floor has stayed stuck at $7.25 an hour.

That is poverty pay, and an increase to the federal minimum wage is long overdue. It’s mind-boggling that Congress has gone so long without making even modest adjustments to help the lowest-paid workers. This is the longest stretch of time without an increase to the federal minimum wage since President Franklin D. Roosevelt signed the Fair Labor Standards Act in 1938, which established the right to a minimum wage.

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May 16, 2024

Certainly there have been some attempts to lift the wage floor. Most recently Democrats floated the Raise the Wage Act of 2023 that would have gradually increased minimum pay to $17 by 2028. Republicans countered with $11 phased in over four years. Neither proposal has moved forward.

As part of her economic plan, Vice President Kamala Harris has called on Congress to send her a bill raising the minimum wage. She supported $15 an hour during the 2020 election, but hasn’t named a number this time.

IRVINE, CA -- WEDNESDAY, APRIL 1, 2020: Jose Secundino, center in blue sweatshirt, joins fellow recently hired Second Harvest Food Bank of Orange County temporary employees, who have been laid off from restaurant jobs due to the coronavirus pandemic, as they pack boxes of food for the needy. Volunteers then picked up the food and delivered it to local senior centers in Orange County. Photo taken at Second Harvest Food Bank at the Orange County Great Park in Irvine, CA, on April 1, 2020. (Allen J. Schaben / Los Angeles Times)

Op-Ed: Why the federal poverty line doesn’t begin to tell the story of poverty in the U.S.

Half of U.S. families struggle to make ends meet, yet their incomes aren’t low enough to meet the official federal poverty threshold.

Sept. 24, 2021

Donald Trump, not surprisingly, has sent conflicting messages on raising the minimum wage over the years. In 2016, he said he wanted to raise the federal rate to at least $10, but later said minimum wage hikes should be left to the states, which is effectively what’s happening now.

Some 30 states and the District of Columbia have enacted higher wage floors, and many cities, including Los Angeles, San Francisco and New York City, have adopted higher base pay than their states in recognition that it is more expensive to live in urban areas. In Seattle and some surrounding cities, the minimum wage is almost $20 an hour.

Still, 20 states, bowing to politics and business lobbying, have kept the federal $7.25 an hour as their pay floor. That’s why Congress needs to act, and the next president should commit to signing a wage hike.

PASADENA CA - JANUARY 28, 2020: Flippy the robot demonstrates its ability to man a fry station at Miso Robotics on January 28, 2020 in Pasadena, California.(Gina Ferazzi/Los AngelesTimes)

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May 1, 2024

The minimum wage is supposed to ensure workers can afford the basic necessities. It’s hard to imagine, even in less expensive regions, how an adult can pay for housing, food, healthcare and transportation on a full-time minimum wage salary of $15,000 a year. That is below the poverty line for a single parent with one child. When working people earn so little that they could qualify for Medicaid and food stamps, taxpayers end up subsidizing their employers.

If the federal minimum wage had kept up with inflation, it would be close to $11 an hour now. An estimated 5 million workers earn less than $11 an hour. And let’s not kid ourselves — while earning $11 an hour working full time would lift a single parent out of poverty, it’s probably not enough to pay the bills and save for a rainy day.

There will always be debate over the correct level at which to set the minimum wage to help the most workers with the fewest negative consequences, which could include businesses cutting low-wage jobs to save money. Yet it should be clear that $7.25 is now woefully low and no longer a fair wage floor. Everyone benefits when working people earn a decent living, and raising the federal minimum wage is essential.

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California Gov. Gavin Newsom signs the fast food bill surrounded by fast food workers at the SEIU Local 721 in Los Angeles, on Thursday, Sept. 28, 2023. Anneisha Williams, right, who works at a Jack in the Box restaurant in Southern California celebrates as she holds up the bill. (AP Photo/Damian Dovarganes)

The fast-food industry claims the California minimum wage law is costing jobs. Its numbers are fake

June 12, 2024

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Other Papers Say: Raise federal minimum wage

The following editorial originally appeared in the Los Angeles Times:

It’s been 15 years since workers earning the federal minimum wage got a raise. The cost of living has gone up more than 45 percent since then, with rents and home prices rising faster than incomes in most regions of the country. Yet the nation’s wage floor has stayed stuck at $7.25 an hour.

As part of her economic plan, Vice President Kamala Harris has called on Congress to send her a bill raising the minimum wage. She supported $15 an hour the 2020 election, but hasn’t named a number this time.

Donald Trump has sent conflicting messages on raising the minimum wage over the years. In 2016, he said he wanted to raise the federal rate to at least $10, but later said minimum wage hikes should be left to the states, which is effectively what’s happening now.

Some 30 states and the District of Columbia have enacted higher wage floors. Still, 20 states, bowing to politics and business lobbying, have kept the federal $7.25 an hour as their pay floor. That’s why Congress needs to act, and the next president should commit to signing a wage hike.

The minimum wage is supposed to ensure workers can afford basic necessities. It’s hard to imagine, even in less expensive regions, how an adult can pay for housing, food, health care and transportation on a full-time minimum wage salary of $15,000 a year. When working people qualify for Medicaid and food stamps, taxpayers end up subsidizing their employers.

There will always be debate over the correct level to help the most workers with the fewest negative consequences, which could include businesses cutting low-wage jobs to save money. Yet it should be clear that $7.25 is now woefully low and no longer a fair wage floor. Everyone benefits when working people earn a decent living, and raising the federal minimum wage is essential.

Why Minimum Wage should be Increased?

How it works

Throughout time minimum wage has played a big role on the way Americans make money. It has helped many people provide for themselves and their family, but with the cost of living and the economy constantly increasing it is making it harder for those who depend on a minimum wage job to be able to take care of the responsibilities they have with the little of money they are making. With the economy and cost of living constantly increasing americans are now struggling and at their lowest to make ends meet.

This is the reason why minimum wage should be increased.

Minimum wage is a part of FLSA which stands for Federal Labor Standards Act which establishes not only minimum wage but also overtime, record keeping, youth employment standards and states that people are to be paid at the starting rate of $7.25 an hour and no lower that that (Wage and Hour Division). Minimum wage is the lowest amount of money a person can be paid when working this is determined by both the state and the Federal Labor Standards Act (Jones, Derek). In 1984, New Zealand was the first to pass minimum wage jobs that covered all businesses and industries across the entire country (History of Minimum Wage). In 1938, The first federal minimum wage in America was introduced by Franklin D Roosevelt that set the starting rate at $.25 an hour (History of Minimum Wage). As of 2018 thirty states as well as a small part of wisconsin are seen to have a higher minimum wage than the federal standards, fourteen states and the rest of wisconsin have minimum wage earnings at the federal standard,two states are below the federal standard, and there are five states that minimum wage does not apply(Minimum Wage Laws in the State). The states who minimum wage does not apply to or make lower than the amount is because they are wanting to keep the money invested in the company instead of the people who work for them, as long as there is no state minimum they are allowed to make up the starting rates of those who work for them (Tritch, Theresa). As of July 2017, Washington was recognized to have the highest minimum wage rate of $12.50 and is predicted to increase to $13.25 (Jones, Derek). As of 2015, 2,561,000 workers the age of sixteen and above either earn the federal minimum wage or are making lower than $7.25 an hour(Should Minimum Wage be Increase?). In 2014, The Minimum Wage Fairness Act was passed for the third time allowing for minimum wage to be raised to $10.10 and was being supported by obama but did not pass by four votes.

Minimum Wage should be increased for many of reason it would help those provide for their families, decrease the rate of poverty and will allow for the economy to grow. In the United States the poverty level is 12.7% which is about 43 million Americans and will continue to increase due to the cost of living and people not being able to pay the bills needed in order to have a home to live in. Federal minimum wages are not enough to support a family or even those who are single parents. It is said that with both parents working a minimum wage job they would have to work a minimum of 4 hourly wage jobs or a total of 76 hours per parent, but for those who are single parents they would have to work twice that to make at least a normal living wage. Minimum wage workers are known to save and are always on a tight budget because of the fact they are living from paycheck to paycheck to secure their place they live in and to be able to have a meal everyday. If minimum wage was to be increased many of these people who live paycheck to paycheck and are very tight with their money would no longer have to worry and would be able to go out and enjoy the money they work hard for not only that they would be able to breath and live at ease with knowing they are going to be able to pay for their things without any problem. Also, If minimum wage was to be increased it would change how middle class and the lower paid workers were seen they would all be seen as equal and it would also change the inequality that makes them different. A $15 minimum wage would begin to reverse decades of growing pay inequality between the lowest-paid workers and the middle class (Why America Needs a $15 Minimum Wage). Also, According to a 2014 Congressional Budget Office report, increasing the minimum wage to $9 would lift 300,000 people out of poverty, and an increase to $10.10 would lift 900,000 people out of poverty (ProCon). Just raising the minimum wage to two dollars would help make a change in the economy and helps those who are in poverty that are trying to make ends meet and want to have a better living situation not only for themselves but for their family as well.

If both republicans and employers are not for increasing minimum wages it is to be believed that job opportunities and the economy would get worse before it gets better. We will begin to live in a society with lazy people or also allowing technology to run the jobs humans once did just to decrease the amount of money the company has to come out to pay the workers. You order at a kiosk and pick up your food at the counter, or scan and bag your own items. (Wolfram). With technology increasing and minimum wage workers wanting to be paid more this will affect not only the workers but the many job opportunities we once had and the amount of people being hired will all decrease within time. In the Maine house they have held of the republican bid to slow down increasing minimum wage because the dollar increasing is to be unreasonable and should instead take the $.50 increase (Mistler). Republicans has chosen to slow down increasing minimum wages because they are trying to create and help the small business and the rural area to make them look good and show that they are helping the community when in reality they are really doing this for themselves and not the actual people they are trying to keep as much as they can for themselves. By not increasing the minimum wage just a dollar people are out there continuing to 2 or more jobs just to be able to make it by they are not being helped or worried about because republicans believe in selfish and is unreasonable when people are out struggling not because they want to but because they are not making enough.

Minimum wage plays a huge role on how people live and the amount of people in poverty because of the minimum wage not increasing. Minimum wage should be increased to allow people who are tight with money and are constantly worrying on how they are going to pay their bill can finally be at ease, but not only that it would also help decrease the amount of people in poverty and it would also better our economy.

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Opinion Columnists | Voters should reject the increase to the…

Opinion Columnists

Opinion columnists | voters should reject the increase to the minimum wage and demand real solutions.

The measure would push the minimum wage from $15 per hour to $18 per hour by 2026. If this happened in a vacuum, it might make sense. But it isn’t happening in a vacuum, doesn’t make sense and the unintended consequences make it simply bad policy.

Increases in the minimum wage can lead to higher prices for consumers and reduced hours and job loss for minimum wage workers – all of which undercut the modest wage gains.

Seattle, for example, passed a minimum wage increase in 2014 that University of Washington researchers determined led to a 9% reduction in hours, which cost workers a loss of $125 per month. The study also found a reduction in the rate these workers were hired.

This alone should give anyone pause.

Supporters of an increase in the minimum wage often dismiss the effect compulsory wage increases have on businesses by saying big companies can afford it. But the vast majority of private sector jobs come from small businesses, many of which operate on tight margins.

If a small business makes more money, it can afford to give its workers more money. But driving up labor costs while revenue stays stagnant leads to consequences that harm the very people minimum wage increases were supposed to help.

The private sector in California is hurting. In the past 18 months, California’s private sector jobs declined by 46,000. We should be supporting job creation, not finding new ways to make it collapse.

Supporters act as if minimum wage workers would not get a raise any other way. But minimum wage workers aren’t condemned to a lifetime of minimum wage work. I had many minimum-wage jobs when I was younger — In fact, I remember thinking everything would be alright if I could just get a job that paid $10 per hour.

I am happy to say I don’t work for the minimum wage today, thanks largely to upskilling, and it required no government intervention to get there.

My story is not uncommon. According to research published by the Legislative Analyst’s Office, the largest cohort of low-wage workers are those younger than 25. But as these workers age, the number of them working for the minimum wage drops significantly.

One troubling trend in LAO’s research is the persistence of those who don’t age out of the minimum wage. The second largest cohort of low-wage workers are those 50 years old or older.

Regardless of whoever they are, upward mobility is essential. Do they need upskilling? Language assistance? Determining precisely what challenges they face and then connecting them with the resources they need seems to be a much better use of time and energy than hurting them with the higher prices, job loss or reduced hours that come from the minimum wage.

On top of that, California lawmakers should focus on reducing the cost of living. It’s not so much that wages are too low as it is that expenses have grown too high. Build some housing or bring down energy costs. A nominal raise is fine but it does little to offset California’s exorbitant cost of living.

Voters should reject this proposal and demand real solutions.

Matt Fleming is an opinion columnist for the Southern California News Group and CEO of Sower Strategies, a digital marketing and public affairs firm.

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Instead of our regular Saturday long read, we've published our first ever Money blog spin off - a student finance special.

In it you'll find:

All the best student discounts - food, clothes, beer and more
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By Jimmy Rice , Money blog editor

Away from Oasis ticket prices, the news agenda in Money this week was dominated by pensions.

We learned on Wednesday that the state pension looks set to rise by just below 4% next April - equalling around £400 extra per year for those on the full state pension.

Pre-2016 retirees who may be eligible for the secondary state pension could see a £300 per year increase.

Because of the triple lock, each year the state pension rises by whatever is highest from inflation, average wage growth or 2.5%.

Officials did nothing to downplay a BBC report, apparently based on internal Treasury figures, that average wage growth would be the highest of these this year.

The figures that would be used to set next April's rise are released next week but the OBR forecast is for 3.7% - which would take the full state pension to around £12,000.

Whether or not pensioners would view this as good news is up for debate (see our last post), but there was definite bad news for older Britons earlier in the week, as Chancellor Rachel Reeves refused to rule out heavier taxation on pensions in the October budget.

How could pensions be taxed further? We had a look here...

Ms Reeves also confirmed on Tuesday that she'd impose a cap on corporation tax.

She said the tax would be capped at its current level of 25% to "give business the confidence to grow".

A final piece of news from Money this week that could have consequences for your bank balance was confirmation that the Household Support Fund would be extended until April.

Councils decide how to dish out their share of the fund but it's often via cash grants or vouchers. Many councils also use the cash to work with local charities and community groups to provide residents with key appliances, school uniforms, cookery classes and items to improve energy efficiency in the home.

People should contact their local council for details on how to apply for the Household Support Fund - they can find their council here .

On the Oasis ticket price story, which continued to make headlines through the week including today, a post in Money appeared to help prompt a U-turn from official reseller Twickets.

The company told us it would be lowering its fees after criticism online...

Unofficial resellers were also in the spotlight and, on an episode of the Daily podcast, Niall Paterson spoke to Viagogo - eliciting an admission that things need to change...

Here in Money, we published a few explainers that are well worth checking out...

We'll be back with live updates on Monday - but do check out our Money blog spin-off tomorrow, a student finance special.

Have a good weekend.

We start this week's round up of your comments with Virgin Media O2's decision to axe its weekly free Greggs perk...

Customers on social media claimed they'd review whether they remained with O2 - while one Money blog reader asked what his rights were if he wanted to cancel...

I signed a new O2 contract on 16 August based largely on the advertised promise of the Greggs priority offer. I'm angry that I have been mis-sold my new contract and I will not be able to enjoy the benefit that I signed it for. I want to end it early, what are my rights? Phil

We looked at O2 Priority's T&Cs - and they clearly set out that they can make any change to the terms of the agreement and service without giving you a right to cancel.

Therefore, if you want to cancel you'll have to pay an early termination charge.

There is one exception - but only if you're in the first two weeks of your contract.

Consumer champion Scott Dixon says: "When you enter into a phone contract with a mobile phone provider online, it is classed as a distance sale and is covered by legislation.

"This legislation binds traders to provide key information at the point of sale including right to cancel information. This gives you a 14-day cooling-off period to leave without paying any termination fees, although you would have to pay for what you have used such as calls, texts and data.

"If you entered into the contract in-store, this would not apply."

This probably isn't what Phil wants to hear - but we did look at other ways he and others might be able to get free or discount Greggs...

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How to eat Greggs on the cheap?! Give me strength... Pork Pie Percy

Another topic that elicited a strong response from readers was a campaign group's call for the chancellor to impose a pay-per-mile tax on electric vehicles.

EV drivers obviously don't pay fuel duty - and the pay-per-mile proposal would make up for lost revenue to the Treasury as more people ditch petrol and diesel cars.

The Campaign for Better Transport group proposing the tax says the public would be on board - but our LinkedIn poll suggests this isn't the case...

Readers said...

I wonder how many people realise that an introduction of pay per mile, I guess by means of a tracker type of device, will actually allow big brother to watch your every move when travelling in your car, your speed on any given road, accident data etc... our freedom is diminishing. Big Ian

EVs need electricity to work, the cost of electricity in the UK is mad. I pay higher electricity bills because I don't have a diesel anymore. Why should I be charged pence per mile just by having an EV? It's money and NOT pollution targets the government are looking at. A Grant

The proposed introduction of pay per mile for ZEV will clearly by necessary to compensate for the taxes lost from the sale of petroleum based fuels. This was always going to happen. EU4ME

Only a matter of time before they came for the electric clan. I wonder if sales of electric will now suffer? Chappers2013

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The “Minimum Wage” is More Minimal Today than Ever

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Minimum Wage Does Not Mean Minimum Prices

Reasons Why the Minimum Wage Should Be Raised: An Essay

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Why the U.S. needs a $15 minimum wage : How the Raise the Wage Act would benefit U.S. workers and their families

The Raise the Wage Act of 2021 would gradually raise the federal minimum wage to $15 an hour by 2025 and narrow racial and gender pay gaps. Here is what the Act would do:

The benefits of gradually phasing in a $15 minimum wage by 2025 would be far-reaching, lifting pay for tens of millions of workers and helping reverse decades of growing pay inequality.

Raising the minimum wage to $15 will be particularly significant for workers of color and would help narrow the racial pay gap.

The majority of workers who would benefit are adult women—many of whom have attended college and many of whom have children.

The Raise the Wage Act follows the lead of the growing number of states and cities that have adopted significant minimum wage increases in recent years, thanks to the ‘Fight for $15 and a union’ movement led by Black workers and workers of color.

Not just on the coasts, but all across the country, workers need at least $15 an hour today .

Workers in many essential and front-line jobs struggle to get by on less than $15 an hour today and would benefit from a $15 minimum wage.

Phasing out the egregiously low $2.13 minimum wage for tipped workers would lift pay, provide stable paychecks, and reduce poverty for millions of tipped workers.

Growing numbers of business owners and organizations have backed a $15 minimum wage.

Our economy can more than afford a $15 minimum wage.

Research confirms what workers know: Raising wages benefits us all.

An immediate increase in the minimum wage is necessary for the health of our economy.

Low wages threaten the economic security of workers and their families, who then turn to social benefits programs to make ends meet.

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Reasons Why Minimum Wage Should Be Raised Essay: Benefits for Workers, Society, and The Economy

My Thoughts on Should Minimum Wage Be Raised Essay

Reduction of Poverty and Inequality

Boost in Consumer Purchasing Power

Improved Health Outcomes

Reduced Reliance on Social Services

Encourages Workforce Productivity and Loyalty

Tips on Writing Why Should Minimum Wage Be Raised Essay

Research the Topic

Develop a Strong Thesis Statement

Support Your Argument with Evidence

Address Counter-Arguments

Use Clear and Concise Language

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Understanding the Minimum Wage

The Bottom Line

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

Key Takeaways

Pros of Raising the Minimum Wage

Cons of Raising Minimum Wage

How Does Minimum Wage Affect the Economy?

Is Minimum Wage the Same for All Workers?

Does Inflation Impact Minimum Wage?

How Does Minimum Wage Affect Small Businesses?

Do All Countries Have Minimum Wage Laws?

To Fight Poverty, Raise the Minimum Wage? Or Abolish It?

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Should We Raise The Minimum Wage?

Should We Raise the Minimum Wage?

Pros and Cons of Minimum Wage

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Politics of Poverty

Here are six simple reasons why raising the minimum wage makes sense.

2. It would address longstanding racial and gender inequities

3. It would reduce poverty

4. It would fuel economic growth

5. It would save taxpayer money and reduce use of government programs

6. It’s what the vast majority of Americans want

Should the Federal Minimum Wage Be Increased?

Pro & Con Arguments

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