08 December 2010
Increasing the minimum wage has sparked a debate across the nation. To raise the minimum wage or to keep it as is, is the question that has been raised. Many people propose that increasing the minimum wage will benefit the economy, but this does not prove to be necessarily true. Increasing the minimum wage has, in fact, cost this nation more than it is benefiting it. One must not overlook the various effects increasing the minimum wage has on the economy. Yes, there will be some who have more money in their pockets, but many lower class Americans will suffer. The minimum wage should not be increased because it is detrimental to the U.S. economy.
Increasing the minimum wage has caused greater unemployment rates. Surprisingly, this goes unknown to many Americans. The only thing that is apparent to them is that they do a considerable amount of work for little pay. When the minimum wage is increased, they feel more confident in that they are getting the salary that they deserve. So, how are so many Americans suffering when their wages have been increased? The answer can be seen in the soaring unemployment rates. While the government may be increasing the minimum wages, they are also decreasing the number of jobs available to people. The government then has to compensate for the increase of wages. In return, fewer jobs are available. Those who were once eager for an increase of minimum wage, suddenly find themselves unemployed.
Companies will not be able to hire people simply because they can not afford to do so. This will lead to even longer lines at the cash register and longer waiting periods at popular restaurants. Dan Mitchell researched the effects on increasing the minimum wage stating, “A new study shows that this pernicious policy has destroyed more than 500,000 part-time jobs.” He also points out that before this policy was implemented, the economy had fewer problems concerning employment rates. That is, until President Bush signed an increase of minimum wage into action. Ever since then, unemployment rates have been a problem for this nation (Mitchell).
Another reason why the minimum wage should not be increased is because the cost of living will rise. In states that have relatively high minimum wages, the cost of living is higher. This will have the same effect on states with regular minimum wages when it is increased. Consumers will find that the costs of their groceries have increased. They will no longer be able to spend two dollars for a carton of milk; instead, they now have to pay three dollars. Even the price of gas will rise, which many Americans are already struggling to pay for now. Once again, lower-class Americans will be struggling to pay for their basic necessities.
In addition, smaller businesses are only allotted a certain amount of money each year to pay for their companies. This money is spent on bills, appliances, products, and, of course, employee salary. When minimum wage is raised, smaller businesses have to increase the prices of their goods so that they can meet the basic requirements to maintain