Increase Minimum Wage Essay

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The news mainly introduces US policymakers decision to increase the minimum wage rate and the consequent impact the raise would have on both, the people who are directly affected by it and the whole labor market. This policy has both negative and positive impacts.
The minimum wage is the least amount of money that workers must be paid according federal law. People who rely on minimum wage are mainly those who are under the age of 25 and have a high school degree or less. Because it is more difficult for these people to find jobs with higher wages (those people lack of skills and trainings), a minimum wage serves as a guarantee to their basic needs so that their living standard is improved. In this case, there will be less poverty and greater equality in distribution of income. This is shown in Figure 3 (Lorenz Curve): Figure 3
Lorenz curve is often used to represent income distribution, where it shows for the bottom x% of households, what percentage y% of the total income they have. The percentage of households are plotted on the x-axis, the percentage of incomes on the y-axis. A …show more content…
Because of higher wages, more people have the incentive to work, so that the aggregate supply of labor is greater than the aggregate demand for labor, then the unemployment a-b is created. In this case, minimum wage benefits some workers at the expense of jobs for others. Moreover, the news also indicates that minimum wage can’t benefit the needy. People who benefit from minimum wage are mainly single and married, and only a quarter of them have children. In fact, more than 11 million earning $40,000 or more per year, with nearly 8 million households in that group earning at least $60,000 annually. Thus raising the minimum wage can’t benefit the very poor and neediest people. This causes inefficiency in allocating

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