Persuasive Essay On Minimum Wage
Noah Schultz
Nevena Stojanovic
English 102
Section 4
2 April 2014
Minimum Wage in the United States The minimum wage in the United States was established in 1938 under the Fair Labor Standards Act, and has been amended numerous times since the original wage of $0.25 per hour; the current federal minimum wage is $7.25 per hour. The act makes it illegal to any employer to pay an employee under a federally mandated minimum wage, as well as regulates child labor and overtime hours and wages (DOL). In the past few years the debate on whether the minimum wage should be raised or not has become increasingly important to the United States’ economic status and its minimum wage workers. It has become increasingly difficult for college graduates …show more content…
to find jobs, and they are being forced to accept jobs that pay the minimum wage. The minimum wage in the United States needs to be raised to help narrow the gap between the lower and upper classes. Our middle class has gone from being one of the strongest in world decades ago to being weak and struggling. This has been caused by, in part, the minimum wage falling below the “living wage” and the fact that young college graduates are struggling to find jobs that they are qualified for, but not overqualified for. The Obama Administration has proposed a new amendment to the Far Labor Standards Act of 1938, which is now being reviewed by the congressional committee. Severe action has been called for by President Obama to raise the federal minimum wage floor, but many republicans in Congress oppose the bill causing a temporary halt to the process, which must be put back into motion. Millions of Americans support raising the minimum wage, and it is necessary to help ease income inequality and the large gap between the lower and upper classes. Democrats have been pushing for congress to pass a bill that raises the minimum wage while many Republicans oppose the idea. The proposal from the Obama Administration to Congress is to “raise the federal minimum wage to $10.10 per hour over two-and-a-half years, in three steps on 95 cents each … More than 27 million Americans would receive a raise from raising the federal minimum wage to $10.10 per hour” (“Raise,” par. 6). In order to strengthen the American middle class, the minimum wage must be raised to help strengthen the lower class first; this would obviously create much more income for many American workers. The idea is to get Americans back to spending trends as when the economy was stabilized while being able to pay the bills and not having to worry as much about money. Raising the minimum wage increases consumer demand as low-income, mostly urban workers spend their wages at local businesses. Many businesses across the United States would be positively effected by this in the long run even though in the short run they may lose some profit and “would generate more than $22 billion in new economic activity, translating to 85,000 new full-time jobs, as higher sales lead businesses to hire employees” (“Raise,” par. 7). Millions of Americans would benefit from an increase in the minimum wage floor, many of whom currently live below the national poverty level. President Obama even mentioned in an address to the House that someone can earn the minimum wage and still not be able to make ends meet. It is sad to think that in “The Greatest Nation in the World” a full-time employee could still have to worry about putting food on the table and paying the bills on time. Although a Gallup survey shows 71% of Americans support the increase, including 54% of conservatives, the majority of republican members, along with a minority of democrats, of Congress do not want this bill to pass.
Their argument is understandable when the previous raise in the minimum wage from 2006-09 is looked at. The unemployment rate skyrocketed, and the American economy went into recession during this time frame, but there were many other factors involved. According to Nancy Love, “The recession was triggered by increasing defaults and foreclosures in the subprime mortgage markets that eventually spread to other mortgage markets, corporate bonds, and commercial real estate. The stock market plummeted, wiping out over eight trillion dollars in wealth” (1). The spike in the unemployment rate and economic recession cannot be blamed only on the minimum wage increase. The housing market is coming back, along with the stock markets, and consumption is even starting to rise again. Conservatives also argue that if the minimum wage is increased, then employers will be forced to either “choose between paying the unskilled worker less, firing the worker, or going bankrupt. Under minimum wage legislation, the first option may not be available because it is illegal, so it leaves only the latter two. The most likely conclusion in this case is unemployment for the unproductive worker” (Hovenga 466). If a worker is earning more than his productivity, then the employer will be …show more content…
constantly earning negative profits while paying that worker. This is not a huge concern in the eyes of the many who support raising the federal minimum wage, because minimum wage workers will be earning more. Workers will have more incentive to work harder due to a raise in the minimum wage, and since the wages of other workers who do not earn the minimum wage is not mandated to increase, the marginal productivity of skilled and unskilled worker will even out. Conservatives in Congress are trying to stop the Obama Administration from raising the minimum wage, but in reality the United States’ economy and workers have been desperate for this bill to pass for years. The government needs to take action on this bill to help bring back the nation’s middle class and restore the minimum wage to reflect inflation. Raising the minimum wage is not just a thought that occurred suddenly. Research has been conducted by many economists and statistical analysts over many years. Through this research, we have learned that raising the minimum wage, unless raised drastically in a short period of time, would have little to no negative impact on the employment rate. According to Aspen Gorry, “A 30% increase in the minimum wage corresponds to a 1.4 increase in the unemployment rate, a 50% increase in minimum wage corresponds to a 4.5% in unemployment …70% increases unemployment for young workers by 15.4%” (3). The last time the minimum wage was raised was in 2009, when the wage was increased by 41% by the Bush Administration. According to the Bureau of Labor Statistics, the number of unemployed Americans nearly doubled in size from 2008 to 2009, rising to 9.0% from 5.0% (DOL). A drastic increase in the minimum wage proved fatal and landed the nation in a recession, with the unemployment rate at its worst since the 1980s. The minimum wage needs to be raised over a period of time in order for employers to adjust to the raising payroll expenses. Although many conservatives refute this because of the possibility that the unemployment rate would spike due to the inability of employers to pay their workers, thus having to fire employees. If employers were given tax breaks from the government in areas such as payroll, then there would be incentive and some wiggle-room for employers to pay their employees a higher wage and also not have to let any workers go. In the long run, employers paying their workers a higher wage will increase worker satisfaction, which has been shown to directly correlate with worker productivity, leading to increased sales for the employer and leaving both sides happy. One of the biggest factors when considering raising the minimum wage is who is affected by it. According to Howard Risher, in 2011, there were 18.1 million part-time workers in the United States and 2.25 million were paid at or below minimum wage. That is 59% of the total. Sorted by age, there were 14.4 million workers between 16 and 24; 49% were paid at or below the minimum wage. Sorted by education, only 13% of all hourly wage workers had less than a high school diploma; accounting for 28% of the minimum wage workers. High school graduates with no college are 35% of all hourly and account for 31% of the minimum wage workers. Another 35% have some college but no degree, and 34% of the minimum wage total. Finally, there were 280,000 college graduates in minimum wage jobs; 7% of the total (Risher, par. 6). The demographic of minimum wage workers is diverse in education, and many of these workers need help financially. According to Risher’s review, 72% of all minimum wage, about 27.8 million workers, workers were high school graduates and independent (par. 3). Raising the minimum wage would drastically help many people who are living below the “living wage”, because of the minimum wage not having been adjusted for inflation in about a decade. According to the Editorial Board of the New York Times, “If it [the minimum wage] had kept pace with inflation, it would now be $10.77 an hour” (“Campaign,” par. 5). Part of the reason that the minimum wage has not been adjusted with inflation is due to decades of steady economic decline and then of course came the Great Recession. The majority of all income in the United States goes to the upper class, which is now an extremely low population relative to years past. The minimum wage in the United States must be raised in order to decrease the income inequality in the United States and to narrow the gap between the lower and upper classes. Millions of minimum wage workers work full time and are still unable to support their family with a comfortable lifestyle. The United States’ economy is making a comeback, and the minimum wage must be raised to increase Americans’ wealth, especially in the lower class, and spending to cause steady economic growth.
Works Cited
US Bureau of Labor Statiscs. “Economic News Release.” US Department of Labor. 4 April 2014. Web. 8 April 2014.
Hovenga, Claire. “The Detrimental Side Effects of Minimum Wage Laws.” Business and Society Review 118.4 (4 Dec 2013): 463-487. Web. 7 April 2014.
Love, Nancy.
“The Great Recession: Causes, Consequences, and Responses.” New Political Science 33.4 (2011): 1-12. Web. 31 March 2014.
Lowrey, Annie. “Raising Minimum Wage Would Ease Income Gap but Carries Political Risk.” New York Times. New York Times, 13 February 2013. Web. 24 March 2014.
Politi, James. “Minimum Wage Rise In 13 States Sets Stage For Battle In Congress.” World News. 2 (2014). LexisNexis. Web. 15 March 2014.
Raise the Minimum Wage. Raisetheminimumwage.com, 2013. Web. 2 April 2014.
Risher, Howard. “Facts on the Minimum Wage.” Rev. of Compensation & Benefits. Sage Publications, 23 April 23. Web. 31 March 2014.
Sabia, Joseph J. “Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State.” Industrial and Labor Relations Review. 65.2 (2012). Business Source Elite. Web. 24 March 2014.
The Editorial Board. “The Campaign for a Bigger Paycheck.” Editorial. New York Times. New York Times, 1 January 2014. Web. 24 March 2014.
Van Arnum, Bradford M. “Financialization and Income Inequality in the United States.” American Journal of Economics and Sociology. 72.5 (2013). Business Source Elite. Web. 24 March
2014.
Nevena Stojanovic
English 102
Section 4
2 April 2014
Minimum Wage in the United States The minimum wage in the United States was established in 1938 under the Fair Labor Standards Act, and has been amended numerous times since the original wage of $0.25 per hour; the current federal minimum wage is $7.25 per hour. The act makes it illegal to any employer to pay an employee under a federally mandated minimum wage, as well as regulates child labor and overtime hours and wages (DOL). In the past few years the debate on whether the minimum wage should be raised or not has become increasingly important to the United States’ economic status and its minimum wage workers. It has become increasingly difficult for college graduates …show more content…
to find jobs, and they are being forced to accept jobs that pay the minimum wage. The minimum wage in the United States needs to be raised to help narrow the gap between the lower and upper classes. Our middle class has gone from being one of the strongest in world decades ago to being weak and struggling. This has been caused by, in part, the minimum wage falling below the “living wage” and the fact that young college graduates are struggling to find jobs that they are qualified for, but not overqualified for. The Obama Administration has proposed a new amendment to the Far Labor Standards Act of 1938, which is now being reviewed by the congressional committee. Severe action has been called for by President Obama to raise the federal minimum wage floor, but many republicans in Congress oppose the bill causing a temporary halt to the process, which must be put back into motion. Millions of Americans support raising the minimum wage, and it is necessary to help ease income inequality and the large gap between the lower and upper classes. Democrats have been pushing for congress to pass a bill that raises the minimum wage while many Republicans oppose the idea. The proposal from the Obama Administration to Congress is to “raise the federal minimum wage to $10.10 per hour over two-and-a-half years, in three steps on 95 cents each … More than 27 million Americans would receive a raise from raising the federal minimum wage to $10.10 per hour” (“Raise,” par. 6). In order to strengthen the American middle class, the minimum wage must be raised to help strengthen the lower class first; this would obviously create much more income for many American workers. The idea is to get Americans back to spending trends as when the economy was stabilized while being able to pay the bills and not having to worry as much about money. Raising the minimum wage increases consumer demand as low-income, mostly urban workers spend their wages at local businesses. Many businesses across the United States would be positively effected by this in the long run even though in the short run they may lose some profit and “would generate more than $22 billion in new economic activity, translating to 85,000 new full-time jobs, as higher sales lead businesses to hire employees” (“Raise,” par. 7). Millions of Americans would benefit from an increase in the minimum wage floor, many of whom currently live below the national poverty level. President Obama even mentioned in an address to the House that someone can earn the minimum wage and still not be able to make ends meet. It is sad to think that in “The Greatest Nation in the World” a full-time employee could still have to worry about putting food on the table and paying the bills on time. Although a Gallup survey shows 71% of Americans support the increase, including 54% of conservatives, the majority of republican members, along with a minority of democrats, of Congress do not want this bill to pass.
Their argument is understandable when the previous raise in the minimum wage from 2006-09 is looked at. The unemployment rate skyrocketed, and the American economy went into recession during this time frame, but there were many other factors involved. According to Nancy Love, “The recession was triggered by increasing defaults and foreclosures in the subprime mortgage markets that eventually spread to other mortgage markets, corporate bonds, and commercial real estate. The stock market plummeted, wiping out over eight trillion dollars in wealth” (1). The spike in the unemployment rate and economic recession cannot be blamed only on the minimum wage increase. The housing market is coming back, along with the stock markets, and consumption is even starting to rise again. Conservatives also argue that if the minimum wage is increased, then employers will be forced to either “choose between paying the unskilled worker less, firing the worker, or going bankrupt. Under minimum wage legislation, the first option may not be available because it is illegal, so it leaves only the latter two. The most likely conclusion in this case is unemployment for the unproductive worker” (Hovenga 466). If a worker is earning more than his productivity, then the employer will be …show more content…
constantly earning negative profits while paying that worker. This is not a huge concern in the eyes of the many who support raising the federal minimum wage, because minimum wage workers will be earning more. Workers will have more incentive to work harder due to a raise in the minimum wage, and since the wages of other workers who do not earn the minimum wage is not mandated to increase, the marginal productivity of skilled and unskilled worker will even out. Conservatives in Congress are trying to stop the Obama Administration from raising the minimum wage, but in reality the United States’ economy and workers have been desperate for this bill to pass for years. The government needs to take action on this bill to help bring back the nation’s middle class and restore the minimum wage to reflect inflation. Raising the minimum wage is not just a thought that occurred suddenly. Research has been conducted by many economists and statistical analysts over many years. Through this research, we have learned that raising the minimum wage, unless raised drastically in a short period of time, would have little to no negative impact on the employment rate. According to Aspen Gorry, “A 30% increase in the minimum wage corresponds to a 1.4 increase in the unemployment rate, a 50% increase in minimum wage corresponds to a 4.5% in unemployment …70% increases unemployment for young workers by 15.4%” (3). The last time the minimum wage was raised was in 2009, when the wage was increased by 41% by the Bush Administration. According to the Bureau of Labor Statistics, the number of unemployed Americans nearly doubled in size from 2008 to 2009, rising to 9.0% from 5.0% (DOL). A drastic increase in the minimum wage proved fatal and landed the nation in a recession, with the unemployment rate at its worst since the 1980s. The minimum wage needs to be raised over a period of time in order for employers to adjust to the raising payroll expenses. Although many conservatives refute this because of the possibility that the unemployment rate would spike due to the inability of employers to pay their workers, thus having to fire employees. If employers were given tax breaks from the government in areas such as payroll, then there would be incentive and some wiggle-room for employers to pay their employees a higher wage and also not have to let any workers go. In the long run, employers paying their workers a higher wage will increase worker satisfaction, which has been shown to directly correlate with worker productivity, leading to increased sales for the employer and leaving both sides happy. One of the biggest factors when considering raising the minimum wage is who is affected by it. According to Howard Risher, in 2011, there were 18.1 million part-time workers in the United States and 2.25 million were paid at or below minimum wage. That is 59% of the total. Sorted by age, there were 14.4 million workers between 16 and 24; 49% were paid at or below the minimum wage. Sorted by education, only 13% of all hourly wage workers had less than a high school diploma; accounting for 28% of the minimum wage workers. High school graduates with no college are 35% of all hourly and account for 31% of the minimum wage workers. Another 35% have some college but no degree, and 34% of the minimum wage total. Finally, there were 280,000 college graduates in minimum wage jobs; 7% of the total (Risher, par. 6). The demographic of minimum wage workers is diverse in education, and many of these workers need help financially. According to Risher’s review, 72% of all minimum wage, about 27.8 million workers, workers were high school graduates and independent (par. 3). Raising the minimum wage would drastically help many people who are living below the “living wage”, because of the minimum wage not having been adjusted for inflation in about a decade. According to the Editorial Board of the New York Times, “If it [the minimum wage] had kept pace with inflation, it would now be $10.77 an hour” (“Campaign,” par. 5). Part of the reason that the minimum wage has not been adjusted with inflation is due to decades of steady economic decline and then of course came the Great Recession. The majority of all income in the United States goes to the upper class, which is now an extremely low population relative to years past. The minimum wage in the United States must be raised in order to decrease the income inequality in the United States and to narrow the gap between the lower and upper classes. Millions of minimum wage workers work full time and are still unable to support their family with a comfortable lifestyle. The United States’ economy is making a comeback, and the minimum wage must be raised to increase Americans’ wealth, especially in the lower class, and spending to cause steady economic growth.
Works Cited
US Bureau of Labor Statiscs. “Economic News Release.” US Department of Labor. 4 April 2014. Web. 8 April 2014.
Hovenga, Claire. “The Detrimental Side Effects of Minimum Wage Laws.” Business and Society Review 118.4 (4 Dec 2013): 463-487. Web. 7 April 2014.
Love, Nancy.
“The Great Recession: Causes, Consequences, and Responses.” New Political Science 33.4 (2011): 1-12. Web. 31 March 2014.
Lowrey, Annie. “Raising Minimum Wage Would Ease Income Gap but Carries Political Risk.” New York Times. New York Times, 13 February 2013. Web. 24 March 2014.
Politi, James. “Minimum Wage Rise In 13 States Sets Stage For Battle In Congress.” World News. 2 (2014). LexisNexis. Web. 15 March 2014.
Raise the Minimum Wage. Raisetheminimumwage.com, 2013. Web. 2 April 2014.
Risher, Howard. “Facts on the Minimum Wage.” Rev. of Compensation & Benefits. Sage Publications, 23 April 23. Web. 31 March 2014.
Sabia, Joseph J. “Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State.” Industrial and Labor Relations Review. 65.2 (2012). Business Source Elite. Web. 24 March 2014.
The Editorial Board. “The Campaign for a Bigger Paycheck.” Editorial. New York Times. New York Times, 1 January 2014. Web. 24 March 2014.
Van Arnum, Bradford M. “Financialization and Income Inequality in the United States.” American Journal of Economics and Sociology. 72.5 (2013). Business Source Elite. Web. 24 March
2014.