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Increasing the minimum wage: pros and cons


Currently in the United States, the idea of doubling the federal minimum wage from $7.50 an hour to $15 an hour is causing a lot of debate. To some people, this seems like one of the best policies considered during President Biden’s term thus far. However, others see it as dangerous and careless, believing that a $15 minimum wage could potentially set back the economy. As of now, the goal in achieving this $15 federal minimum wage is to make sure that more people have access to a livable wage and are able to support themselves and their families. In order to achieve this, the United States House of Representatives decided to package the $15 federal minimum wage policy alongside the COVID-19 stimulus bill, giving it a better chance of it going through. However, as of March 2, this part of the COVID relief bill will not be allowed inclusion in the bill once it goes to the Senate. Even though the $15 federal minimum wage policy may have faced a hurdle here, there still may be other ways for the bill to go through at some point in time. While this is all happening though, I think it’s worth noting the positives and negatives of increasing the federal minimum wage to $15 an hour, as the country seems to be very divided on this hot topic. 

Although the jump of the federal minimum wage may seem scary, as it’s about to be more than double than what it used to be, there are still plenty of benefits that will be able to help the citizens of the United States live better lives. According to the Economic Policy Institute, there are several ways in which a $15 federal minimum wage will help the United States. First off, an increase in the federal minimum wage can help improve infant health, reduce child abuse, and reduce teenage pregnancies. By improving infant health, the increase in the federal minimum wage would be able to save the lives of the future generation, which in my opinion, seems like a good reason to increase the minimum wage. On top of this, the increase will also allow for the United States as a whole to reduce poverty and income inequality. With poverty being a huge problem within the United States as millions of people are homeless on a daily basis, the increase in the federal minimum wage would allow for those who face the brutalities of poverty to earn enough money to live a livable life. Lastly, another huge advantage of increasing the federal minimum wage is that if we increase it at a moderate rate, then there would be no detectable job losses. One of the biggest arguments for not increasing the minimum wage is due to the fact that inflation would cause many people and jobs to go out of business, but if we decide to raise the minimum wage a little at a time, then this will give inflation the chance to balance out quicker than just doubling it right off the bat. 

Although there may be many positives to increasing the federal minimum wage, there are some side effects that can happen, as well. As Investopedia points out, one of the side effects of an increased federal minimum wage is the fact that an increased cost of living will arise.  This means that when the minimum wage goes up and people start earning more than they used to, the price of commodities within stores will also increase as well, causing people to spend more money than they used to. In addition, if we don’t moderately increase the federal minimum wage, the U.S. could experience a significant loss in jobs available, hence increasing the unemployment rate. If we were to go to a $15 federal minimum wage by 2025, this change would result in approximately 1.3 million jobs being lost, and potentially even more if companies choose to outsource. This essentially means that a raise in the federal minimum wage in the nearby future wouldn’t actually help those who are experiencing poverty or are homeless, and it would create less jobs available within the market. Finally, yet another problem with increasing the minimum wage would be the fact that there would be a large number of overqualified workers taking these minimum wage jobs away from younger, less experienced workers due to the fact that these jobs are paying better. This would create yet another hurdle for people who are experiencing poverty or are homeless as they may not have the experience needed in order to get the job. 

Overall, I believe that an increase in the federal minimum wage is definitely needed, but I’m not so sure that immediately raising it $15 an hour is the right path. The federal minimum wage of $7.50 an hour right now is completely unacceptable because it doesn’t allow those who cannot gain experience to get any other job enough money to live. In some aspects, I personally believe that moderately increasing the federal minimum wage would be able to help everyone that needs the increase live a better life that they deserve. To me, the benefits of raising the federal minimum wage seem to outshine the consequences of it: by increasing the federal minimum wage, people will be able to experience a somewhat satisfied life and have access to the necessities they need. If we raise the federal minimum wage at a slow rate over the next few years, I believe that we will be able to control the inflation that comes with it. If we can somehow find a balance that provides a livable wage that doesn’t drastically affect inflation and unemployment, I believe that the federal minimum wage increase will give an opportunity for a better life for those who do not have that opportunity today.

Featured Image courtesy of Jp Valery via Unsplash

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Increasing the minimum wage: pros and cons