Minimum Wage: It’s More Confusing Than We Think

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While many of us have conversations about raising minimum wage, the answer is not as simple as I thought.

Writing this article, I had hoped to show why we need to raise the minimum wage and that it’s a black and white issue. Yet, with more research, I realized my original idea lacked the proper knowledge behind it. The more I dove into the topic, the more I realized how important it is to show both sides of the argument. The history of minimum wage looks promising from where it started with the working class, although the debate is one of chaos within the American system. Raising the minimum wage can negatively impact our economy by increasing unemployment and closing the doors of many small businesses; however, increasing the minimum wage could provide greater financial security that many lack.

During the Great Depression in 1938, Roosevelt heard the demands of the labor unions and gave workers a federal minimum wage of 24 cents per hour. At the time, this was a great accomplishment. Over time our federal wage has increased to $7.25 an hour, but by 2019, state and local governments were able to dictate their own minimum wage. From there on, an abundance of different wages from $7.25-$15.00 has evolved. In 2019, a plan to raise the federal minimum wage to $15.00 an hour by 2025 sparked much debate in the Senate. Eventually, it was rejected by the senate, but the idea of a $15.00 minimum wage is still up for debate and pushed for by many progressives and may even become a reality. 

With sudden increases in minimum wage, many could become unemployed, and businesses would be forced to increase consumer prices. In a Congressional Budget Office study, increasing the minimum wage to $15.00/hr by 2025 will leave 1.3 million people unemployed in an average week. With that increase, businesses will be forced to cut back on employees or increase the cost of goods, increasing the prices for the consumer; based on the hypothesis of a wage pushed inflation, corporations are forced to increase wages. All of these create an upset in the economy and can lead to possible inflation and further damage to the social aspects of individuals’ lives.

On the other hand, raising the minimum wage can bring more people above the poverty line and help with an overall increase in lifestyle. This raise could lift 1.3 mil Americans out of poverty, as most minimum wage workers are already using some form of gov. assistance. From an increase, many more Americans can have a higher buying power or the added luxury of financial security than before. 

Now that our country is stuck in this void, what do we do? That’s up to us when casting in our ballots and activating for what we the people want. I will leave you to make your own conclusion about minimum wage based on these facts because it isn’t a black and white issue. Through this piece, I’ve learned that everything comes with a sacrifice and for this one, do you sacrifice the economy or the people?