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PoliticalScience1100

TheMinimumWageDebate
ByBrynneAdamson

Introduction

Starting late in the year of 1929, the United States faced one of the most challenging
moments in economic history: the Great Depression. Because of the crash in the stock market,
American citizens suddenly found themselves struggling to survive. Millions of people lost their
jobs, homes, and savings due to this horrible tragedy. Work was scarce, and the pay that those
lucky employees received from their jobs was minimal. Children were forced to drop out of
school and work in factories so their families could have something to eat. Working conditions
for these children were dangerous, for they had to use machines that were built for adults. If they
made any mistakes, they would be punished. Overall, there just didnt seem to be any way out
for these Americans and their struggles. (History.com Staff)

It was then, a few years after President Roosevelt was elected, that things started to
change for the workers of America. In 1938, President Roosevelt signed the Fair Labor
Standards Act (FLSA), which was a law that would change lives forever. This law made it so a
mandatory minimum wage was to be paid to workers, children werent allowed to work until
they were at least 14, and employees were to be paid more when working overtime (U.S.
Department of Labor). Because of the FLSA, many Americans were able to get out of poverty
and be protected from exploitation. This act is still in effect today and is continuing to influence
citizens everywhere.

The minimum wage has been changed quite a lot over the years. It has been increased
and decreased many times by many different presidents. Currently, the federal minimum wage
is $7.25 per hour effective July 24, 2009 (U.S. Department of Labor). There are some who
want to change that; instead of $7.25 per hour, they wish for $10 to $15 per hour. They view the
current minimum wage as too little a pay, relative to inflation, poverty, and worker quality.
Others disagree and say that the minimum wage is fine and should not be disturbed. They
believe that raising the minimum wage will lead to an increase of unemployment levels, product
costs, and ruined businesses. This debate has many different points of view, making it very hard
to determine a clear, complete answer.

Analysis

Those who wish to raise our countrys minimum wage argue that it hasnt been keeping
up with inflation. They believe that because there has been a general increase of prices, there
should be an increase of minimum wage, too. The last time the minimum wage was changed by
the federal government, as mentioned before, was in 2009. Updating the minimum wage is long
overdue. Their argument is that by giving citizens larger wages, they will have more money to
spend. This extra money, that they otherwise wouldnt have, goes back into the economy and
increases the flow of money, which decreases inflation. A high level of consumer spending is
obviously good for business, and that in turn creates more jobs (Waltman, pg. 134). Increasing
the minimum wage will not only help with inflation, but will help repair businesses across the
country who have been affected by the economy.

An increase of minimum wage, it is believed, will also help those in low-income families.
The different classes of our country are greatly spread, with the rich getting richer and the poor
getting poorer. Increasing the minimum wage will allow those living in poverty to be able to live
better, more stable lives. [In] 2009 the top households gained $5.6 trillion in two years, while
the bottom 90 percent lost $600 billion (Rolf, pg. 8). Thats quite a lot of money, and it will
continue to keep getting worse as years go on, with the poor being unable to do anything about it.
Those who believe in raising the minimum wage wish to help those struggling with poverty, so
that they will be able to get their bills paid on time and rise out of the gutter they have been
sleeping in their whole lives.

It is believed that companies will focus on hiring more qualified workers if the minimum
wage is raised as well. Workers who get paid more will want to keep their job and will work
more efficiently in order to please their supervisors. This means less turnover in a company and
less time being wasted. [Companies] get the best workers because their competitors pay so
much less (Waltman, pg. 133). By increasing the minimum wage, all companies will have the
best workers. This helps companies receive positive reviews, which, in turn, helps them gain
more customers and money; the economy will improve, too.

On the other side of this debate are those who believe that the minimum wage is fine as it
is. They say that unemployment rates will increase if the minimum wage is raised. Suppose
there is a job opening at a company. By increasing the minimum wage, that job now has more
value and a bigger paycheck at the end of the day. This means that more people are going to try
to obtain that job, increasing competition and decreasing employment rates. The Congressional
Budget Office estimates that increasing the minimum wage to $10.10 per hour will cost 500,000
jobs (Syrios). Also they argue that, because the pay will be more, employers will only hire
those who are more qualified for the job. This can be hard for those who have never had a job
before and will impair the ability for them to get an interview. The workforce will greatly
diminish if the minimum wage is raised.

Product costs is another concern of those against the rise in minimum wage. They
believe that the economy and American lives will be greatly impacted if the minimum wage is
changed. Businesses would have to adjust the prices of their products in order to keep up with
the increase of wage, which may turn away customers who are unwilling to pay the raised price.
Economists find that businesses pass minimum-wage costs on to their customers by raising
prices. Consumers, not business owners, bear the burden (Sherk). It is hard for those living in
poverty to pay for products they need in general; increasing the minimum wage will just make it
even harder for them.

Many businesses, too, will be ruined by raising the federal wage. Small businesses who
dont have a lot of income would be unable to keep up with added costs to their budget. Most
minimum-wage employers are small businesses. Their profit margins are too small to absorb
large wage increases (Sherk). A business cannot afford to pay their workers more than what
they can make; its just not done. In places where business is scarce, small companies will be
unable to get enough revenue to pay for the increase of wage. This can hurt the diversity of
businesses in the United States, which makes large companies ability to monopolize even easier.
It also hurts consumers who like to shop at these small companies, which may know them
personally. They may find themselves feeling unsatisfied because their favorite store shut down.
Small businesses mustnt be snuffed out because of the increase of minimum wage.

Discussion

Increasing the minimum wage is an important matter that shouldnt be overlooked. It

may have the ability to ruin or help millions of American lives. It is very hard to determine if the
minimum wage should be increased, though. On one end, there are those who believe that
raising the minimum wage will greatly help America and its impoverished people. On the other
side, there are those who believe that raising the minimum wage will do much more damage than
good when it comes to providing for our countrys citizens. Both sides have compelling,
credible evidence, making it hard for many to come to a reasonable decision on which belief is
more correct. However, the answer isnt to pick what side is more right, but to come to a
compromise or a different solution that will provide what people of each side of the debate are
looking for.

An alternative that could be made to satisfy both sides of the issue would be providing a
higher education for those who are in poverty. By helping those who are unable to afford
college, they will be able to climb out of their hard life of impoverishment and be able to receive
a better paying job. Many would disagree with this different solution, stating that it wouldnt
help with the problem of competition in the work force. However, the solution to that is to
provide training programs for those who are struggling to find a job. If companies offered these
workers further training to increase their skills and marketability, their employee value will
increase (Blackhurst). If they are unable to get the job they had worked so hard for in college,
training will help them reach it. Poverty will surely decrease in the United States if help was
given to citizens living in such a state.

Another solution to help with the issue would be to implement a tax reduction for small
businesses. This would make it so that they would be able to pay their employees the increased
minimum wage and keep up with other expenses. It would also allow them to hire more
employees in their business, which would decrease the countrys unemployment rate. By
lowering taxes for small businesses and entrepreneurs, the U.S. economy can be strengthened by
creating the incentive and ability for employers to create more jobs and hire more employees
(Blackhurst). America would be greatly impacted if such an alternative were to happen.

Conclusion

The minimum wage was created for the struggling people of America. Even now, it
allows for children to grow and develop in ways a child should. Citizens are protected from
exploitation and companies who wish to take advantage of them. They are also receiving a
bigger pay when they work overtime. It is quite clear that the United States needs the minimum
wage. However, how much should the wage be? If the wage is too large, the economy of our
country will greatly suffer and plunge into even more debt. If it is too little, many of those trying
to live their lives will find themselves at a road block that they can never overcome. Perhaps the
limit on the minimum wage we currently have should stay, or maybe it should increase. Perhaps
a completely different answer is what is needed. Something must be decided soon. The entire
country could suffer because a certain action wasnt taken.

While working on this assignment, I learned quite a lot. I had previously thought that the
economy was never changing and took much force to tip the balance. However, I know now that
the economy is always changing and is actually quite fragile. Almost anything can change it,
whether it be raising the minimum wage or the stock market crashing. Everything affects the
economy and those who pump money into it. I also didnt know that some states have already
raised the minimum wage to $10 an hour, such as California. There has been a lot of speculation
about that topic, which I didnt want to bring into my report because it would have taken many
pages to explain. Perhaps the minimum wage will be federally raised next year with how fast our
country is changing. Who knows? Another thing I learned was that the minimum wage has
changed quite a lot over the years. I thought that it has always been $7.50 per hour, but I know
now that it was much less than that when it was first created. I discovered that the minimum
wage has been mostly decreased over the years, which I thought to be interesting. I would have
thought that presidents over the years would have only increased it, but they did what they saw
fit and decreased it according to levels of inflation.

Overall, I feel much more educated on the debate of increasing the minimum wage.
While I didnt really have any a ha moments while writing this paper, I did come to understand
just how much the minimum wage affects my life every day. I am truly grateful for it.

Citations

Blackhurst, Kathryn. "4 Alternatives to Minimum Wage Hike to Bolster the Working Class."

Newsmax. Newsmax, 27 May 2015. Web. 07 Mar. 2017.

History.com Staff. "The Great Depression." History.com. A&E Television Networks, 2009. Web.

17 Feb. 2017.

Rolf, David. The Fight for $15: The Right Wage for a Working America. New York: The New

Press, 2016. Print.

Sherk, James. "$15 Minimum Wages Will Substantially Raise Prices." The Heritage Foundation.

N.p., 19 Jan. 2017. Web. 01 Mar. 2017.

Syrios, Andrew. "Yes, Minimum Wages Still Increase Unemployment." Mises Institute. N.p., 09

Feb. 2015. Web. 01 Mar. 2017.

U.S. Department of Labor. "Wage and Hour Division (WHD)." Compliance Assistance - Wages

and the Fair Labor Standards Act (FLSA) - Wage and Hour Division (WHD) - U.S.

Department of Labor. U.S. Department of Labor, n.d. Web. 17 Feb. 2017.

Waltman, Jerold L. The Case for the Living Wage. N.p. Algora, 2004. Print.