Federally
imposed minimum wage now stands at $7.25 an hour. President Obama and
Democratic legislators are calling for an increase in minimum wage to an
astounding $10.10 an hour by 2016l that is if Texas doesn't pass the Texas Minimum Wage Increase Amendment first. Many people are fighting for this bill to be
passed, but they don’t realize how many negative effects it can have on our
economy.
Raising the minimum wage
raises the cost of hiring at companies that employ low-wage workers and
low-wage interns. Faced with higher labor costs, many businesses are going to
have to raise prices, lay off workers or cut their profit margins. Competitive
pressures will usually prevent business from boosting prices. That leaves business
with the unpleasant choice of either letting go of hardworking employees or accepting
much lower profits.
Democratic congressmen
are trying to get the minimum wage raise passed which harms businesses even
though big business helps many congressmen win re-election through campaign
funding. Why should business donate money for congressional incumbents to win
re-election if they are going to pass a bill that could harm the business industry
as a whole? Congressmen may not be thinking about the support that businesses
provides them, which is why it is critical that they be reminded.
Raising minimum wage is an incredibly important issue for anyone who wasn't born with a silver spoon or has fallen on hard times. The idea that any American can work hard and achieve a house with a fence in the suburbs with 2.3 kids is an antiquity that does not exist in modern America. The fact is that many Americans do not have the option or ability to go to college or apply to many jobs with more required qualifications than Wal-Mart.
ReplyDeleteThat being said, these jobs at best may pay a few cents an hour over $7.25 as mandated by the government. Based on a 40 hour work week (which is generous, considering that many companies are cutting hours so that they will not have to provide benefits due to the Affordable Care Act), this means that these Americans are making roughly $14,500 per year. In modern American, that is simply not enough money to survive alone, let alone support a family. Assuming that a family could eat for $50 a week (optimistic), that leaves the family with $11,900. Median rent in the US is roughly $900 a month ($10,800 a year). How does this person get to work? Not with a car, as that is now out of the range of affordability. It's simply not possible to make minimum wage without needing government assistance.
Saying that allowing people to have a wage that would allow them to eat would hurt the economy is asinine. The economy in the US is hurting specifically from a low wage. Many large corporations take advantage of this cheap labor knowing that the US government will subsidize their labor. Currently, Wal-Mart is costing the US government approximately $6.2 billion in food stamps, Medicaid, and public housing. Most small businesses already pay their employees more fairly because the business owners are not as far separated from their employees. Raising the wage would not be a detriment to the economy, just to the top income earners of the US. Based on return on investment of the economy and where Wal-Mart stands, they could afford to pay their employees 50% more without hurting their stock, according to Stanford finance professor. There are many examples of companies, both large and small that are extremely successful while paying their employees generously. There are also many examples of companies that treat laborers as this post would suggest (disposable) that have failed spectacularly.
Finally, the argument that the government should pay attention to the businesses that lobby them when making a decision about a livable wage goes against the principles the US was founded upon. If big business had they option, they would pay their employees as little as absolutely possible, and we would revert to social structures of the industrial revolution, or the poverty levels of China. The government is supposed to speak for the people in their district, and mandating companies to pay their employees a fair wage is one of the ways representatives should help their constituents.
The largest problem with the entire debate in America is calling it a minimum wage. It is a livable wage.
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ReplyDeleteIn the article, Minimum Wage Raise, the author raises concern about raising the minimum wage in America. Obama and the Democratic Party are trying to pass a bill in order to increase the minimum wage, which several others are fighting for as well. As the author mentions, the congressman and other political groups do not understand what raising the minimum wage will do to the economy. Most people think by raising the minimum wage the economy will prosper and they will receive more income to provide for their family. As a matter of fact, by increasing the wage everyone will increase their prices and everything will end up more expensive than before. Therefore will this bill actually benefit the economy and American citizens?
ReplyDeleteRaising the minimum wage will especially hurt small businesses because they will be required to pay their employees more, which most small businesses can’t afford. The author makes a good point that “competitive pressures will usually prevent business from boosting prices” which will cause them to either lay off employees or receive less income. Although the author makes a valid point about the minimum wage hurting businesses, the author mentions that big businesses will be affected as well. I disagree with this portion of the article because the larger corporations have several contracts with other companies so if they raise their prices they will most likely still get the business from their loyal customers compared to a smaller business. Another thing the author did not discuss in their article is the impact this bill will have on employees that make more than the average minimum wage right now. I feel like this is an important portion of the topic that needs to be discussed, considering thousands of employees in Texas make more than minimum wage. Will their income increase as well, or will it remain the same? If so, how is it fair for someone that earns a college degree or works hard to be promoted to make close to the same amount as someone who works at a fast food place? If this bill were to pass it would most likely hurt the middle class the most. In all honesty, I see no benefit or positive outcome from increasing the minimum wage and think it is only going to hurt the American economy.