Most of us have been there, and many of us still are: earning minimum wage, and struggling to make it work. Figuring it out month to month. Unsurprisingly, the role of federal minimum wage comes up a lot in American politics these days — some folks are in favor of raising it, some for keeping it the same, and some for getting rid of it altogether.
Here are some of the pros and cons to raising the federal minimum wage.
People for increasing minimum wage say…
- The minimum wage doesn’t allow for upward mobility. Federal minimum wage is only $7.25/hour for most people. If you work 40 hours a week, that’s only $1,160 a month. Now think about your rent or mortgage payment, and do some quick math. It’s terrifying, frankly.
- States can’t be counted on to raise their own minimum wages. Yes, some states have a higher minimum wage than federal level...but 21 don’t. People in those 21 states rely on the federal minimum wage for a liveable income, and it’s not working.
- It would help whole communities. People with more disposable income will stimulate business growth in their communities. A better living for some of us helps all of us.
- It would reduce the need for public assistance. More than 1.7 million workers would stop relying on food stamps, welfare, subsidized housing and other publicly-funded programs. This has two huge benefits: decreasing the tax dollars needed for these programs and ending the generational cycles of poverty that keep people reliant on government entitlements.
- When you allow for inflation, minimum wage hasn’t increased in years. It’s actually lower than it was in the late 1960s. It’s just time.
People against increasing the minimum wage say…
- It would affect only 2.6 million American workers, half of whom are under 25 (read: mostly teenagers.) That’s just not enough people to warrant restrictive legislation that could hurt businesses.
- It may hurt job prospects for unskilled/lower skilled workers. Some studies suggest that states raising their minimum wage actually force businesses to eliminate jobs in order to make ends meet, and they cut low-skilled jobs first — harming the very people a wage increase is supposed to help.
- It may not actually reduce poverty. A study done by the Employment Policy Institute found that increases in minimum wage have the greatest impact on families living above the poverty line.
- Prices may go up. A higher minimum wage means businesses will have to offset the increased cost of labor somehow — by raising prices, for example.
- It may disproportionately affect small businesses. Almost all businesses in the U.S. employ fewer than 500 people, and small businesses employ half of America. By cramping small business growth, raising the minimum wage may slow job growth.
Tell us in the comments: what do you think? To raise, or not to raise.