Raising Minimum Wage

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Raising the Minimum wage has been a very controversial topic, however most people don't know about the destructive outcomes. The minimum wage was set to protect workers from getting paid too little and to compensate with the raise in living costs. The current minimum wage is $7.25 but many think it should be raised higher. An increase in the minimum wage will lead to more problems rather than reduce them. In the United States raising the minimum wage is a major issue because it destroys jobs and raises inflation.
Raising the minimum wage will cause massive job layoffs in the workplace. Many believe companies should be paying employees more than the current rate. When the minimum wage increases this causes a decrease in a company's capital.
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Raising the money in circulation too much could lead to an economic slowdown or recession. Since the minimum wage was raised to the current $7.25 the dollar has lost 8.1% due to inflation (Hassett). This is a huge increase in the price of goods for everyone. Raising the prices for a small group of individuals will have a dramatic outcome on the majority of others. When the minimum wage is raised the effects of inflation will relatively equal out. This means people in higher paid positions will be paying higher rates for the same goods. When the minimum wage increases those with higher paying positions will not receive an increase. This will decrease the incentive to pursue higher academics when these low-skill jobs will be paying reasonable money. Hassett also states that raising the minimum wage from $7.25 to $9.00 would only help 11.3% of workers. Raising the minimum wage of a small group of individuals affects the other 89.7% of workers negatively. There will also be a hike in taxes to compensate for the higher minimum wage. Minimum wage workers will face an equivalent of a 50% tax rate increase (Hasset). This will cause Americans to have less money for purchasing goods and services. They will be paying more into the system that affects a small group of …show more content…
There are a plethora negatives that affect the economy and the lives of workers. There are many solutions to getting Americans out of poverty but raising the federal minimum wage is not one of them. It is important to consider that raising the minimum wage will destroy jobs and raise inflation. The higher the minimum wage the greater the employment loss occurs. It is important to weigh the consequences of having millions without jobs or a small group of individuals getting paid