In 1938, during The Great Depression, a minimum wage of only $0.25 an hour was set through the Fair Labor Standards Act (FLSA) by Franklin D. Roosevelt. It is no secret that the U.
S. economy has a history of recessing. It is almost as if the common citizen is always recovering from the latest collapse. Our leaders are constantly trying to come up with various solutions to this problem. One of these ideas is to raise the minimum wage from $7.
25 to $10.10 per hour. However, some people are hesitant to support this idea due to the unemployment epidemic recently experienced, the costs for goods and services increase, and the possibility of expanding the gap between the lower and middle classes. If the increase of minimum wage does negatively affect our economy, then the economy may not recover from another devastating recession. So, the question remains, “Will the risk of raising minimum wage to better the economy be worth it in the end?” Raising minimum wage would cause the unemployment rate to skyrocket. “Because it will make it more expensive for businesses to hire young and low-skill workers at a time of crisis-level unemployment, it will not alleviate poverty.” Larger payroll costs will lead employers to automate some of their work and to raise prices, which lowers sales as well as employmentIf minimum wage goes up/increases, people will have more money to spend, which increases prices of goods.
“Minimum-wage increases have relatively small effects on the overall price level. They reported that a 10 percent minimum-wage increase raises overall prices by about 0.2 percent to 0.3 percent.” (Shark 5) In other terms, this means that a gallon of milk could go from $2.00 to $5.00. An increase in demand would cause a decrease in supply.
It would also largely increase the price of food at restaurants. Restaurants that hire more low-paid workers are more affected. “Prices increased twice as much—by approximately 1.5 percent—at fast-food restaurants. In lower-wage regions, fast-food prices rose 1.8 percent” (Shark 5) Raising it will do the economy no good if the money is not being used correctly for their needs. On the other side, there are good effects of having a higher wage. It could help people get off of food stamps/General Public Assistance, it could also most likely bring Americans out of the poverty level, most Americans support a higher payroll, and it would decrease race and gender inequality.
Almost all people living in America rely on the state to help support themselves and their families in different ways. Such as Section 8, Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), and The Earned Income Credit (EIC). As far as poverty goes thousands of people are affected by it.
If minimum wage was higher many people would be off the streets and into homes. Homeless people, people who are working the minimum wage, and people who do not work, make up most of the population. The United States is one of the many states that has a high poverty rate of 14.5%.
Raising minimum wage is good, but you would have to reduce the cost of buying a house or the cost of rent. If you are not working or seeking work ,school, or education, then gas, food, and general necessities would still be an issue because gas is not covered by GPA, neither are clothes or transportation, and many other needs to get around. Public assistance doesn’t give you enough money to pay for housing unless you are under Section 8. We are one of the richest countries and yet King County has the third largest population of homeless people in the country. “Seattle and not the rest of King County, the city jumps to number one (the worst) on the list.
With 121 homeless people per 10,000 residents, Seattle surpasses Washington, D.C. (110), New York City (90), and Los Angeles (59).” (Ron and Don 3) As of January 26, 2017, we had reached 22,000 homeless people that were counted. Even though we have officials working to try and end it, it all points back to raising minimum wage. To how rent is rising and lack of affordable housing. This is why you see people sleeping in cars and tents.
Not to mention it does not cover the numerous of people sleeping in shelters, transitional housing, and underneath overpasses. “U.S.
Department of Housing and Urban Development show that with an estimated count of 11,643 in 2017… That overall number includes people living in shelters and other facilities, as well as outdoors.” We take for granted that these people have to find places to shower and warm food. People that have kids have to pay child support and fines or support their family, may not have any money as soon as they have finished taking care of that.