Lester Duarte

Julio Alicea

Economics

10/24/16

Increase minimum wage good or bad?

Though increasing minimum wage can cause some people to lose their jobs, the outcome of
increasing minimum wage can be good for the economy in other ways. According to an analysis
made by CEA Calculations, increasing the minimum wage to the maximum $10.10 can help
millions of Americans in poverty. They found that an estimated 12 million Americans are in
poverty which means 17% are below the poverty line for $7.25 minimum wage. After the change
to a $10.10 wage, about 5% would be above the poverty line. In that case, if the minimum wage
raises problems with poverty will be less of an issue in the U.S. Even though it doesnt help
everyone in poverty, it will still decrease the percentage of people in poverty. This is good for
the economy because since the percentage of people in poverty will decrease, poverty will
become less of an issue. And due to the income rising, peoples demand will start to go up
because of increase in minimum wage. According to another analysis made by Akerlof, the
increase of wage will increase employees productivity. In other words, increased wages leads to
better quality in products, better focus, and hard work which is better for the economy. In that
cast, this can help the economy with better effort into their work and better production which is
better than people who arent motivated because they're getting $7.25 minimum wage. In
conclusion, it is clear that the increase of minimum wage can be very helpful for the economy
because increasing the minimum wage will result in helping millions of Americans out of poverty
and also encouraging workers to be more productive at their jobs