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Gabe Rine

Professor Hunter

English 1201

09 February 2020

Minimum Wage Isn’t A Livable Wage

Today in America, many people, especially younger people, are struggling just to

survive. One of the biggest problems right now is that the minimum wage cannot bring in an

income high enough to fully support a family. This is causing many people to rely on others and

government help to just barely get by. The minimum wage of $7.25 in the is not enough money

for anyone to survive, and is causing many financial problems like not having enough to eat, not

being able to afford proper shelter, and not being able to sustain a healthy lifestyle.

As of the year 2020, the federal minimum wage is just a little bit over seven dollars

before taxes. If someone were to work a full time, 40 hour work week at this rate, the worker

would earn about $223.30 after taxes were taken out. This income would bring in about $893.20

dollars a month and about $10,718.40 dollars yearly. For a family of two in 2020, the poverty

line is $16,910, so someone earning a minimum wage with a full time working schedule would

be earning $6191.60 under the poverty line if the worker had to support someone else such as a

kid, and if they needed to support 2 other people, they would be $10,611.60 under the national

poverty line. If two people in a family of three work full time jobs for minimum wage, they

would barely be able make it past the poverty line, which in many places in the United States is

still not enough to have a healthy life for the family.

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According to several credible sources such as The Washington Post, many suggest that

raising the minimum wage by $7.75 to make it $15 an hour would help the United States’

poverty a lot. By doing this, it would “lift the earnings of 27.3 million workers” (Van Dam) in

the United States. By raising the minimum wage by $7.75 an hour, this would lift many full time

workers out of poverty. A $15 minimum wage would bring in $462 dollars a week compared to

the current minimum wage bringing in $239 less than this. Also, this would generate over

$23,000 a year, which could not only be higher than the poverty line for a family of two, but it

would also be above that for a family of three and almost for a family of four people. If multiple

people in a household had full time minimum wage jobs, they would be able to generate more

than enough income to fully support themselves with no goverment assistance or help needed.

Although many people in the US do not make minimum wage in a job, about 1.7 million

people or 2% of workers do, “42.4 percent of working Americans make less than $15 an hour”

(Novello and Rodgers). This means that over 66 million workers will experience an increase in

pay with that minimum wage increase. Although not all of these people are independent, or in

poverty, this will still help everyone to not only help support themselves, but also help prepare

for the future if they are not in dire need of a raised income.

Boosting the minimum wage to $15 an hour would also have a large boost to the

economy. According to the Federal Reserve Bank of Chicago, “a $1 minimum wage increase

boosts consumer spending for households with minimum wage workers by $2,080 per

household” (Aaronson, Agarwald, and French). According to the Economic Policy Institute, a

jump to a minimum wage of $15 an hour would boost yearly income by $5,100 a year, with an

average raise in income of about $3.10 an hour. “The average annual expenditures of low-

income families adds up to $33,300, indicating that the $5,100 increase in income represents a 15
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percent jump in the typical household’s possible expenditures” (Novello and Rodgers). This

increase in income could help with many payments, such as over a year's worth of transportation,

over 18 months of groceries, or 6 months of rent, based on an average cost of living in low

income families. This increase would help many families be able to afford a much better style of

living as they would be able to afford the necessities to survive with much less stress.

Raising the minimum wage would also cause productivity to increase from workers

across the United States. Because the increase in pay would cause a greater competition for jobs,

the productivity in workers would increase in order to maintain the job. In an experiment, where

10,000 workers throughout over 200 department stores were tracked, “a $1 increase in the

minimum wage lead a typical employee to sell about 4.5 percent more per hour” (Van Dam). If

you put this into perspective, an increase as large as a raise to $15 an hour would most likely

have a very large impact on productivity, which would help businesses be able to afford to pay

employees more.

The College of William and Mary’s Committee on Employment Opportunity did a study

on workers who were employed in the area of the college. The people running the study did the

study on the landscapers around the college area who were employed by the college and were

paid substantially less than those employed by other businesses. They found that the employees

of the college had much lower amrels and work ethics compared to the other landscapers in the

area. They showed these finding the the principle of the college and he raised the wages of the

landscapers working for them, and the productivity rose, turnover rate dropped, and the search

for training costs also went down. All of these things made the employees more money,

increased profits for the college, and made the customers much more satisfied with the work

being done.
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Not only doing higher paying businesses have higher productivity rates, but lower paying

jobs have a higher turnover rate. According to a report by Barack Obama’s Council of Economic

Advisors, “paying below-market wages is associated with higher turnover, lower morale, and

higher training cost” (Novello and Rodgers). This means that many jobs that do not pay as well

as others have a much higher chance of losing workers to other jobs, and needing to restart the

hiring process. Not only is this a problem because the businesses will lose potential long term

and hard working employees, but it also can be expensive and a waste of money to continue

training new employees when they already had workers capable of doing the job.

Another piece of information found is that raising the minimum age would most likely

increase mental and physical health in many citizens of the United States as well. According the

the U.S. Department of Agriculture, 11.1% of all families in the US in 2018 had bad food

security, meaning they had insufficient means of having a consistent eating pattern at some point

in the year. 6.8% of families had low food security meaning they were not receiving enough food

at some point, but were receiving enough to not have a substantial deficit to their regular eating

patterns due to inability to buy or obtain, and 4.3% of families had very low food security,

meaning they had substantial changes in food eating patterns throughout the year due to inability

to buy or obtain food.

The inability to get food is also detrimental to children along with adults. In 2018, 37.2

million total US Citizens lived in food-insecure households. 9.5 million US adults lived in a

household with very low food security. In all the food insecure homes in the US, there were 6

million children unable to get a regular eating pattern all year, as well as adults in the same

household. On top of all this, 540,000 children lived in a household where at least one child in

the family had very low food security. This is very unfortunate, because childhood is the most
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important portion of life for a person to develop physically, which is impossible to do without

the right means of nutrition.

Finally, having a higher income can help with people’s mental health along with just their

physical health. A study looking at well over 400,000 suicides reported that nationally, “between

2006 and 2016, and found states that implemented even a $1 increase in minimum wages saw an

average 1.9% decrease in suicides annually” (Ulery). According to Business Insider, “People

who earned less than $34,000 were 50 percent more likely to commit suicide” (Woodruff) and

also, “Unemployed people, in fact, are 72 percent more likely to commit suicide than people who

are working” (Woodruff). By increasing the minimum wage, many Americans would better set

not only financially, but mentally as well.

One of the biggest misconceptions for the argument against increasing minimum wage is

that the minimum wage has been increasing over time. Although the number of dollars per hour

has increased over the years as time goes on, when you factor in inflation to the increase of

wage, the number has barely been changed. In 1968, the minimum wage was $1.60 in the US.

With today’s inflation rate, this would be worth about $11.81 which is $4.56 more than today's

minimum wage. Another minimum wage misconception is that the minimum wage everywhere

in the US is $7.25. Many states have a minimum wage higher that the federal one that has been

set, and some cities have even higher ones set than the state minimum. Although there are many

misconceptions when it comes to this topic, these two are some of the bigger ones.

One of the biggest arguments against increasing the minimum wage is what it could do to

the economy and to current jobs and hiring process in the US today. A study over several

decades on the effect of increasing the minimum wage found that there is about a “1 percent or 2

percent reduction for teenage or very low-skill employment for each 10 percent minimum-wage
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increase” (Rugy). Because $15 an hour would be an increase of a little over 200% to the current

$7.25 federal minimum wage, that could be inferred that about 10-20% of all teen and minimum

wage jobs would be lost. Another strong argument is the effect on small businesses. Many

people feel that most small businesses would not be able to keep up with big corporations with a

large minimum wage increase, because they do not make nearly as much profit as large

corporations.

Another argument against raising the federal minimum wage is the impact it will have on

small businesses who already do not take on a super large profit. A study was done that looked at

the increase in business failures over the 57 year soan from 1936-1983, and found that there was

in increase in business failures directly after a federal income raise. Over the years, the average

failure rate was 43.2%. An article discussing these results shared, “Comparing the years when

there was an increase to the minimum wage with other years, the rate was 43.2 in the former and

50.0 in the latter” (Camhout, McBride, and Waltman 219). This indicates that raising the

minimum wage has a pretty significant effect when it comes to the success rate of businesses.

Also, the proposal to increase the minimum wage by over two times where it is already at would

most likely increase a business’ failure rate even more.

Businesses are also looking at nonhuman forms of fighting paying higher wages. Many

jobs have already been taken over by robots who do not need paid to do work, and only need

purchased and maintenance fees when they come up. According to BBC, “about 1.7 million

manufacturing jobs have already been lost to robots since 2000” (Cellan-Jones), 260,000 in the

US alone. It does not just stop at the manufacturing business however. McDonald’s plans on

replacing some cashiers and plans on adding 1,000 self order kiosks each quarter. This will

ultimately get rid of several part time jobs as they will be replaced by robots. Although not every
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job position can be substituted for robots, many can be and in increase in minimum wage will

most likely lead to a much larger number of robot ‘employees.’

After looking over the pros and cons of increasing the minimum wage, it is safe to say an

increase is probably due to come. Although there are some downsides to increasing workers pay,

there seems to be much more of a brightside. From increasing the amount of children with good

amounts of food, to decreasing the number of people depending on the government, there are

many positives that would come from increasing the minimum wage, and it is about time the US

tries to make some changes for the better.

Work Cited

Camhout, Nicole, et al. “Minimum Wage Increases and the Business Failure Rate.” Taylor &

Francis, 5 Jan. 2016,

www.tandfonline.com/doi/abs/10.1080/00213624.1998.11506018?src=recsys. Accessed

09 February 2020.
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Cellan-Jones, Rory. “Robots 'to Replace up to 20 Million Factory Jobs' by 2030.” BBC News,

BBC, 26 June 2019, www.bbc.com/news/business-48760799. Accessed 09 February

2020.

Clifford, Jacob. “Minimum Wage Misconceptions with Jacob Clifford.” YouTube, YouTube, 20

Nov. 2015, www.youtube.com/watch?v=4GIdROzO94M. Accessed 06 February 2020.

Cooper, David. “Raising the Minimum Wage to $15 by 2024 Would Lift Wages for 41 Million

American Workers.” Economic Policy Institute, 6 Apr. 2017,

www.epi.org/publication/15-by-2024-would-lift-wages-for-41-million/. Accessed 09

February 2020.

Dam, Andrew Van. “Analysis | It's Not Just Paychecks: The Surprising Society-Wide Benefits of

Raising the Minimum Wage.” The Washington Post, WP Company, 8 July 2019,

www.washingtonpost.com/business/2019/07/08/its-not-just-paychecks-surprising-

society-wide-benefits-raising-minimum-wage/. Accessed 02 February 2020.

Gregory, Christian, et al. “Key Statistics & Graphics.” USDA ERS - Key Statistics & Graphics, 4

Sept. 2019, www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-

us/key-statistics-graphics.aspx. Accessed 09 February 2020.

“Minimum Wage By State 2019 & 2020 Changes.” Paycor, 6 Dec. 2019,

www.paycor.com/resource-center/minimum-wage-by-state. Accessed 09 February 2020.

“Minimum Wage in America: How Many People Are Earning $7.25 an Hour?” USAFacts,

USAFacts, 19 Sept. 2019, usafacts.org/articles/minimum-wage-america-how-many-

people-are-earning-725-hour/. Accessed 09 February 2020.

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Rodgers, William, and Amanda Novello. “Making the Economic Case for a $15 Minimum

Wage.” The Century Foundation, 28 Jan. 2019, tcf.org/content/commentary/making-

economic-case-15-minimum-wage/?agreed=1. Accessed 09 February 2020.

Rugy, Veronique de. “Column: Why a $15 Minimum Wage Should Scare Us.” PBS, Public

Broadcasting Service, 9 Sept. 2016, www.pbs.org/newshour/economy/column-15-

minimum-wage-scare-us. Accessed 02 February 2020.

Whitten, Sarah. “McDonald's to Add Self-Order Kiosks to 1,000 Stores Each Quarter.” CNBC,

CNBC, 4 June 2018, www.cnbc.com/2018/06/04/mcdonalds-to-add-self-order-kiosks-to-

1000-stores-each-quarter.html. Accessed 09 February 2020.

Ullery, Chris. “Gov. Wolf Renews Push for $12 Minimum Wage.” The Intelligencer, The

Intelligencer, 31 Jan. 2020, www.theintell.com/news/20200131/gov-wolf-renews-push-

for-12-minimum-wage. Accessed 02 February 2020.

Whitten, Sarah. “McDonald's to Add Self-Order Kiosks to 1,000 Stores Each Quarter.” CNBC,

CNBC, 4 June 2018, www.cnbc.com/2018/06/04/mcdonalds-to-add-self-order-kiosks-to-

1000-stores-each-quarter.html. Accessed 09 February 2020.

“Why America Needs a $15 Minimum Wage.” Economic Policy Institute, 5 Feb. 2019,

www.epi.org/publication/why-america-needs-a-15-minimum-wage/. Accessed 09

February 2020.

Woodruff, Mandi. “'Keeping Up With The Joneses' Could Lead To Suicide.” Business Insider,

Business Insider, 12 Nov. 2012, www.businessinsider.com/link-between-wealth-

and-suicide-rates-san-francisco-federal-reserve-2012-11. Accessed 09 February 2020.

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