why should minimum wage be raised essay

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Reasons Why the Minimum Wage Should Be Raised: An Essay

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Works Cited

• Babic, Mary, et al. “6 Simple Reasons We Should Raise the Minimum Wage Right Now”. The Politics of Poverty, 15 Feb. 2019, politicsofpoverty.oxfamamerica.org/2019/02/6-simple-reasons-we-should-raise-the-minimum-wage/.
• Doyle, Alison. “Should the Minimum Wage Be Raised?” The Balance Careers, The Balance Careers, 15 July 2019, www.thebalancecareers.com/pros-and-cons-of-raising-the-minimum-wage-2062521.
• “Pros and Cons of Raising Minimum Wage”. Toggl, toggl.com/pros-and-cons-of-raising-minimum-wage/.
• “Raise the U.S. Minimum Wage”. Los Angeles Times, 18 July 2019. Sirsissuesresearcher, explore.proquest.com/sirsissuesresearcher/document/2285121088?accountid=44669. Accessed 4 Nov. 2019.
• Smith, Lisa. “The Minimum Wage: Does It Matter?” Investopedia, Investopedia, 12 Aug. 2019, www.investopedia.com/articles/07/minimum_wage.asp.

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Reasons Why Minimum Wage Should Be Raised Essay: Benefits for Workers, Society, and The Economy

The minimum wage controversy has been among the most discussed and argued issues for many years. Those in favor of raising the minimum wage argue that the increased income would enable low-wage workers to better their lives, reduce poverty and income disparity, as well as bring an economic boost. On the contrary, many opponents of raising the minimum wage contend that it will cause job losses and lead to higher prices.

This essay, written by a custom essay company , can help you understand the topic. By examining the evidence and arguments from both sides of the debate, we can gain a better understanding of the potential impact of raising the minimum wage and make informed decisions about public policy in this area.

My Thoughts on Should Minimum Wage Be Raised Essay

The minimum wage has long been a contentious issue in the United States, with opinions divided on whether it should be increased or left at its current level. Those in favor of increasing the minimum wage argue that it would help to alleviate poverty, reduce income inequality, and stimulate economic growth. However, opponents of a minimum wage hike suggest that it could lead to job losses, inflation, and reduced economic competitiveness.

Nevertheless, by considering the potential benefits and drawbacks of increasing the minimum wage, I would like to to provide a comprehensive analysis of this complex issue and help readers come to an informed opinion.

Reduction of Poverty and Inequality

One of the most compelling reasons for raising minimum wage is the reduction of poverty and inequality. According to the Economic Policy Institute, raising the minimum wage to $15 per hour could lift 1.3 million workers out of poverty and reduce income inequality. This is because low-wage workers, who are often from marginalized communities, rely on minimum wage jobs to support themselves and their families. By increasing the minimum wage, their income would increase, allowing them to meet their basic needs, such as food, housing, and healthcare.

Boost in Consumer Purchasing Power

Increasing the minimum wage would also lead to a boost in consumer purchasing power. When low-wage workers earn more, they are more likely to spend more, which would stimulate the economy. For instance, a report by the National Employment Law Project estimated that raising the minimum wage to $15 per hour would generate an additional $118 billion in economic activity over a five-year period.

Improved Health Outcomes

Low-wage workers often cannot afford basic healthcare services, which can lead to serious health consequences. By raising the minimum wage, workers would have access to better healthcare services, which would lead to improved health outcomes. This is because when low-wage workers have better health, they are more productive, which benefits both the employer and the employee.

Reduced Reliance on Social Services

Low-wage workers often rely on social services such as food stamps, housing subsidies, and Medicaid to make ends meet. By raising the minimum wage, workers would be able to earn enough to support themselves and their families without having to rely on social services. This would reduce the burden on taxpayers and enable the government to allocate resources to other areas of need.

Encourages Workforce Productivity and Loyalty

By paying workers a fair wage, they are more likely to be productive and loyal to their employer. This is because they feel valued and appreciated, which leads to higher job satisfaction and engagement. Additionally, when workers are paid a fair wage, they are less likely to leave their jobs, which can reduce the costs associated with hiring and training new employees.

While there are differing opinions on the impact of raising the minimum wage, there is evidence to support the many benefits that come with increasing it. Raising the minimum wage can help to reduce poverty and income inequality, boost consumer purchasing power, improve health outcomes, and reduce reliance on social services.

Furthermore, paying workers a fair wage can lead to increased productivity, loyalty, and job satisfaction. While there may be some initial costs associated with raising the minimum wage, the long-term benefits can outweigh them. As society moves forward, it is important to consider the potential impact of increasing the minimum wage and work towards a more equitable and just society where all workers are paid a fair wage for their labor.

Through thoughtful policy-making and continued advocacy, we can ensure that the benefits of raising the minimum wage are realized for workers, society, and the economy as a whole.

Tips on Writing Why Should Minimum Wage Be Raised Essay

The issue of minimum wage has become a hotly debated topic in recent years, with advocates calling for an increase in the minimum wage to address issues of poverty and inequality. If you are passionate about this topic and want to share your views, writing an essay on why minimum wage should be raised can be a great way to do so. However, to make your essay stand out, it’s important to approach it with a clear and well-structured argument. Here are some tips on how to write an excellent essay on why minimum wage should be raised, so you can effectively convey your ideas and contribute to the ongoing discussion around this important issue.

Research the Topic

Before you start writing a raising minimum wage essay, it is important to research the topic and gather as much information as possible. This will help you to understand the various arguments and counter-arguments related to the minimum wage. Use reputable sources, such as academic journals, government reports, and news articles, to gather information.

Develop a Strong Thesis Statement

A thesis statement is the backbone of your essays on raising minimum wage and sets the tone for the rest of your writing. Make sure your thesis statement is clear, concise, and reflects your stance on the topic. A strong thesis statement might read: “Raising the minimum wage is necessary to reduce poverty and inequality, boost the economy, and provide workers with a fair living wage.”

Support Your Argument with Evidence

To write an opinion article , you need to support your claims with evidence. Use statistics, data, and examples to illustrate your points and provide evidence for your claims. For example, you might use data to show that raising the minimum wage has led to increased consumer spending in other countries, or you might cite research that shows how low wages can lead to poor health outcomes.

Address Counter-Arguments

When writing about a contentious topic like the minimum wage, it is important to address counter-arguments. Acknowledge the other side’s point of view and provide evidence to counter their claims. This will help you to build a more persuasive argument and show that you have considered all sides of the issue.

Use Clear and Concise Language

Your essay should be easy to read and understand. Use clear and concise language to communicate your ideas effectively. Avoid using jargon or technical language that might confuse your reader. Make sure to proofread your work carefully to catch any spelling or grammar errors that could detract from your argument.

By following these tips, you can develop a compelling argument that supports your position and addresses counter-arguments.

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Fact Sheet | Wages, Incomes, and Wealth

Why the U.S. needs a $15 minimum wage : How the Raise the Wage Act would benefit U.S. workers and their families

Fact Sheet • January 26, 2021

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This fact sheet was updated February 19 with a new section on tipped workers .

The federal minimum hourly wage is just $7.25 and Congress has not increased it since 2009. Low wages hurt all workers and are particularly harmful to Black workers and other workers of color, especially women of color, who make up a disproportionate share of workers who are severely underpaid. This is the result of structural racism and sexism, with an economic system rooted in chattel slavery in which workers of color—and especially women of color—have been and continue to be shunted into the most underpaid jobs. 1

This fact sheet was produced in collaboration with the National Employment Law Project .

The Raise the Wage Act of 2021 would gradually raise the federal minimum wage to $15 an hour by 2025 and narrow racial and gender pay gaps. Here is what the Act would do:

• Raise the federal minimum wage to $9.50 this year and increase it in steps until it reaches $15 an hour in 2025. 2
• After 2025, adjust the minimum wage each year to keep pace with growth in the median wage, a measure of wages for typical workers.
• Phase out the egregious subminimum wage for tipped workers, which has been frozen at a meager $2.13 since 1991. 3
• Sunset unacceptable subminimum wages for workers with disabilities employed in sheltered workshops and for workers under age 20.

The benefits of gradually phasing in a $15 minimum wage by 2025 would be far-reaching, lifting pay for tens of millions of workers and helping reverse decades of growing pay inequality.

The Raise the Wage Act would have the following benefits: 4

• Gradually raising the federal minimum wage to $15 by 2025 would lift pay for 32 million workers—21% of the U.S. workforce .
• Affected workers who work year round would earn an extra $3,300 a year —enough to make a tremendous difference in the life of a cashier, home health aide, or fast-food worker who today struggles to get by on less than $25,000 a year.
• A majority (59%) of workers whose total family income is below the poverty line would receive a pay increase if the minimum wage were raised to $15 by 2025.
• A $15 minimum wage would begin to reverse decades of growing pay inequality between the most underpaid workers and workers receiving close to the median wage, particularly along gender and racial lines. For example, minimum wage increases in the late 1960s explained 20% of the decrease in the Black–white earnings gap in the years that followed, whereas failures to adequately increase the minimum wage after 1979 account for almost half of the increase in inequality between women at the middle and bottom of the wage distribution. 5
• A $15 minimum wage by 2025 would generate $107 billion in higher wages for workers and would also benefit communities across the country. Because underpaid workers spend much of their extra earnings, this injection of wages will help stimulate the economy and spur greater business activity and job growth .

Raising the minimum wage to $15 will be particularly significant for workers of color and would help narrow the racial pay gap.

• Nearly one-third (31%) of African Americans and one-quarter (26%) of Latinos would get a raise if the federal minimum wage were increased to $15. 6
• Almost one in four (23%) of those who would benefit is a Black or Latina woman.
• African Americans and Latinos are paid 10%–15% less than white workers with the same characteristics, so The Raise the Wage Act will deliver the largest benefits to Black and Latino workers: about $3,500 annually for a year-round worker. 7
• Minimum wage increases in the 1960s Civil Rights Era significantly reduced Black–white earnings inequality and are responsible for more than 20% of the overall reduction in later years. 8

The majority of workers who would benefit are adult women—many of whom have attended college and many of whom have children.

• More than half (51%) of workers who would benefit are adults between the ages of 25 and 54; only one in 10 is a teenager.
• Nearly six in 10 (59%) are women.
• More than half (54%) work full time.
• More than four in 10 (43%) have some college experience.
• More than a quarter (28%) have children.

The Raise the Wage Act follows the lead of the growing number of states and cities that have adopted significant minimum wage increases in recent years, thanks to the ‘Fight for $15 and a union’ movement led by Black workers and workers of color.

• Since the Fight for $15 was launched by striking fast-food workers in 2012, 9 states representing approximately 40% of the U.S. workforce —California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, Virginia, and the District of Columbia— have approved raising their minimum wages to $15 an hour . 10
• Additional states—including Washington, Oregon, Colorado, Arizona, New Mexico, Vermont, Missouri, Michigan, and Maine—have approved minimum wages ranging from $12 to $14.75 an hour . 11

Not just on the coasts, but all across the country, workers need at least $15 an hour today .

• Today, in all areas across the United States, a single adult without children needs at least $31,200—what a full-time worker making $15 an hour earns annually—to achieve a modest but adequate standard of living. 12 By 2025, workers in these areas and those with children will need even more, according to projections based on the Economic Policy Institute’s Family Budget Calculator . 13
• For example, in rural Missouri, a single adult without children will need $39,800 (more than $19 per hour for a full-time worker) by 2025 to cover typical rent, food, transportation, and other basic living costs.
• In larger metro areas of the South and Southwest—where the majority of the Southern population live—a single adult without children will also need more than $15 an hour by 2025 to get by: $20.03 in Fort Worth, $21.12 in Phoenix, and $20.95 in Miami.
• In more expensive regions of the country, a single adult without children will need far more than $15 an hour by 2025 to cover the basics: $28.70 in New York City, $24.06 in Los Angeles, and $23.94 in Washington, D.C.

Workers in many essential and front-line jobs struggle to get by on less than $15 an hour today and would benefit from a $15 minimum wage.

• Essential and front-line workers make up a majority (60%) of those who would benefit from a $15 minimum wage. 14 The median pay is well under $15 an hour for many essential and front-line jobs; examples include substitute teachers ($13.84), nursing assistants ($14.26), and home health aides ($12.15). 15
• More than one-third (35%) of those working in residential or nursing care facilities would see their pay increase , in addition to home health aides and other health care support workers.
• One in three retail-sector workers (36%) would get a raise, including 42% of workers in grocery stores.
• More than four in 10 (43% of) janitors, housekeepers, and other cleaning workers would benefit.
• Nearly two-thirds (64%) of servers, cooks, and other food preparation workers would see their earnings rise by $5,800 on a year-round basis.
• Ten million workers in health care, education, construction, and manufacturing would see a raise —representing nearly one-third (31%) of the workers who would see a raise.

Phasing out the egregiously low $2.13 minimum wage for tipped workers would lift pay, provide stable paychecks, and reduce poverty for millions of tipped workers.

• There are 1.3 million tipped workers throughout the country who are paid as little as $2.13 per hour because Congress has not lifted the federal tipped wage in 30 years. Another 1.8 million tipped workers receive wages above $2.13, but still less than their state’s regular minimum wage. 16
• Seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have already eliminated their lower tipped minimum wage . In these “one-fair-wage” states, tipped workers in these states are paid the same minimum wage as everyone else before tips. 17 For restaurant servers and bartenders, take-home pay in one-fair-wage states is 21% higher, on average, than in $2.13 states.
• Having a lower minimum wage for tipped jobs results in dramatically higher poverty rates for tipped workers. In states that use the federal $2.13 tipped minimum wage, the poverty rate among servers and bartenders is 13.3%—5.6 percentage points higher than the 7.7% poverty rate among servers and bartenders in one-fair-wage states. 18
• Eliminating the lower tipped minimum wage has not harmed growth in the restaurant industry or tipped jobs. From 2011 to 2019, one-fair-wage states had stronger restaurant growth than states that had a lower tipped minimum wage—both in the number of full-service restaurants (17.5% versus 11.1%) and in full-service restaurant employment (23.8% versus 18.7%). 19

Growing numbers of business owners and organizations have backed a $15 minimum wage.

• In states that have already approved $15 minimum wages, business organizations representing thousands of small businesses have endorsed a $15 minimum wage.
• Business groups that have endorsed a $15 minimum wage include Business for a Fair Minimum Wage, 20 the American Sustainable Business Council, 21 the Patriotic Millionaires, 22 the Greater New York Chamber of Commerce, 23 the Long Island African American Chamber of Commerce, 24 and others.
• Growing numbers of employers have responded to pressure from workers and raised their starting pay scales to $15 or higher. These include retail giants Amazon, 25 Whole Foods 26 (owned by Amazon), Target, 27 Walmart, 28 Wayfair, 29 Costco, 30 Hobby Lobby, 31 and Best Buy; 32 employers in the food service and producing industries, such as Chobani, 33 Starbucks, 34 Sanderson Farms (Mississippi), 35 and the Atlanta-area locations of Lidl grocery stores; 36 health care employers including Michigan’s Henry Ford Health System 37 and Trinity Health System, 38 Ohio’s Akron Children’s Hospital 39 and Cincinnati Children’s Hospital Medical Center, 40 Iowa’s Mercy Medical Center and MercyCare Community Physicians, 41 Missouri’s North Kansas City Hospital and Meritas Health, 42 and Maryland’s LifeBridge Health; 43 insurers and banks such as Amalgamated Bank, 44 Allstate, 45 Wells Fargo, 46 and Franklin Savings Bank in New Hampshire 47 ; and tech and communications leaders such as Facebook 48 and Charter Communications. 49

Our economy can more than afford a $15 minimum wage.

• Workers earning the current federal minimum wage are paid less per hour in real dollars than their counterparts were paid 50 years ago . 50
• Businesses can afford to pay the most underpaid worker in the U.S. today substantially more than what her counterpart was paid half a century ago. 51
• The economy has grown dramatically over the past 50 years, and workers are producing more from each hour of work, with productivity nearly doubling since the late 1960s . If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be over $20 an hour today . 52

Research confirms what workers know: Raising wages benefits us all.

• High-quality academic scholarship confirms that modest increases in the minimum wage have not led to detectable job losses . 53
• After the federal minimum wage was raised to its highest historical peak in 1968, wages grew and racial earnings gaps closed without constricting employment opportunities for underpaid workers overall. 54
• Comprehensive research on 138 state-level minimum wage increases shows that all underpaid workers benefit from minimum wage increases, not just teenagers or restaurant workers. 55
• Multiple studies conclude that total annual incomes of families at the bottom of the income distribution rise significantly after a minimum wage increase. 56 Workers in low-wage jobs and their families benefit the most from these income increases, reducing poverty and income inequality.
• By providing families with higher incomes, minimum wage increases have improved infant health and also reduced child abuse and teenage pregnancy . 57

An immediate increase in the minimum wage is necessary for the health of our economy.

• Raising the minimum wage now will tilt the playing field back toward workers who have dangerous jobs and little bargaining power during the pandemic. 58
• Providing underpaid workers with more money will directly counter the consumer demand shortfall during this recession. 59
• Even the Congressional Budget Office’s 2019 study of the impact of raising the federal minimum wage to $15 by 2025 clearly showed that the policy would raise incomes of underpaid workers overall and significantly reduce the number of families in poverty. 60

Low wages threaten the economic security of workers and their families, who then turn to social benefits programs to make ends meet.

• In states without laws to raise the minimum wage to $15, nearly half (47%, or 10.5 million) of families of workers who would benefit from the Act rely on public supports programs in part because they do not earn enough at work. 61
• These workers and their families account for nearly one-third of total enrollment in one or more public supports programs. 62
• In states without a $15 minimum wage law, public supports programs for underpaid workers and their families make up 42% of total spending on Medicaid and CHIP (the Children’s Health Insurance Program), cash assistance (Temporary Assistance for Needy Families, or TANF), food stamps (Supplemental Nutrition Assistance Program, or SNAP), and the earned income tax credit (EITC), and cost federal and state taxpayers more than $107 billion a year . 63

Notes and Sources

This fact sheet is an update of Why America Needs a $15 Minimum Wage , published by EPI and the National Employment Law Project, February 2019.

Unless otherwise indicated, the figures presented in this fact sheet come from a forthcoming EPI analysis of the 2021 Raise the Wage Act .

1. Kate Bahn and Carmen Sanchez Cumming, “ Four Graphs on U.S. Occupational Segregation by Race, Ethnicity, and Gender ,” Washington Center for Equitable Growth, July 1, 2020.

2. The analysis is based on the 2021 Raise the Wage Act.

3. Sylvia Allegretto and David Cooper, Twenty-Three Years and Still Waiting for Change: Why It’s Time to Give Tipped Workers the Regular Minimum Wage , Economic Policy Institute, July 2014.

4. Estimated effects of the 2021 Raise the Wage Act throughout this fact sheet are from a forthcoming Economic Policy Institute analysis of the legislation and include benefits for both directly affected workers (those who would otherwise earn less than $15 per hour in 2025) and indirectly affected workers (those who would earn just slightly above $15 in 2025).

5. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021); David Autor, Alan Manning, and Christopher L. Smith, “ The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment ,” American Economic Journal: Applied Economics 8, no. 1 (January 2016).

6. See also Laura Huizar and Tsedeye Gebreselassie, What a $15 Minimum Wage Means for Women and Workers of Color , National Employment Law Project, December 2016.

7. For racial/ethnic wage gaps, see Appendix Table 1 of Elise Gould, State of Working America Wages 2019 , Economic Policy Institute, February 2020.

8. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021).

9. Alina Selyukh, “ ‘Gives Me Hope’: How Low-Paid Workers Rose up Against Stagnant Wages ,” National Public Radio’s All Things Considered , February 26, 2020; Kimberly Freeman Brown and Marc Bayard, “ Editorial: The New Face of Labor, Civil Rights is Black & Female ,” NBC News, September 7, 2015; Amy B. Dean, “ Is the Fight for $15 the Next Civil Rights Movement? ” Al Jazeera America , June 22, 2015.

10. Economic Policy Institute calculation using Current Employment Statistics data from the Bureau of Labor Statistics. Values calculated using the listed states’ share of total U.S. nonfarm employment in calendar year 2019 (prior to the COVID-19 pandemic). For recent minimum wage changes, see the Economic Policy Institute Minimum Wage Tracker, https://www.epi.org/minimum-wage-tracker/ . We include the District of Columbia in this list even though it is not a state.

11. Yannet Lathrop, Impact of the Fight for $15: $68 Billion in Raises, 22 Million Workers , National Employment Law Project, November 2018.

12. Based on calculations from the Economic Policy Institute’s Family Budget Calculator , which measures the income a family needs to attain a secure yet modest standard of living in all counties and metro areas across the country.

13. Congressional Budget Office projections for the consumer price index were applied to the Economic Policy Institute’s Family Budget Calculator .

14. Economic Policy Institute analysis of the legislation, forthcoming.

15. Bureau of Labor Statistics, Occupational Employment Statistics, May 2019 National Occupational Employment and Wage Estimates United States (online database).

16. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

17. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

18. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

19.  Quarterly Census of Employment and Wages, 2011–2019.

20. Business for a Fair Minimum Wage, “ Federal Business for a Fair Minimum Wage—$15: Signatories List in Formation ,” accessed January 22, 2021.

21. Business for a Fair Minimum Wage, “ Federal Business for a Fair Minimum Wage—$15: Signatories List in Formation ,” accessed January 22, 2021.

22. Patriotic Millionaires, “ Endorsed Bill: The Raise the Wage Act ,” accessed January 22, 2021.

23. Greater New York Chamber of Commerce, “ Celebrating Juneteenth ,” June 18, 2020.

24. Kate King, “ New York Boosts Minimum Wage and Some Businesses Balk ,” Wall Street Journal , January 4, 2021.

25. Arjun Panchadar, “ Amazon Raises Minimum Wage to $15, Urges Rivals to Follow ,” Reuters , October 2, 2018.

26. Abha Bhattarai, “ Amazon Boosts Minimum Wage to $15 for All Workers Following Criticism ,” Washington Post , October 2, 2018.

27. Melissa Repko, “ Target Raises Minimum Wage to $15 an Hour Months Before its Deadline ,” CNBC , June 17, 2020.

28. Michael Grothaus, “ Walmart Is Giving 165,000 Employees a Pay Raise Between $15 and $30 per Hour ,” Fast Company , September 18, 2020.

29. Lucia Maffei, “ Wayfair Sets $15 Minimum Wage for All U.S. Workers ,” MassLive , January 8, 2021.

30. Sarah Nassauer and Micah Maidenberg, “ Costco Raises Minimum Wage to $15 an Hour ,” Wall Street Journal , March 6, 2019.

31. Hobby Lobby, “ Hobby Lobby Raises Minimum Wage ” (press release), September 14, 2020.

32. Gillian Friedman, “ Best Buy to Join Retailers Paying a $15 Minimum Wage ,” New York Times , July 22, 2020.

33. Chobani, “ Chobani Increases Employees’ Starting Wage to at Least $15/Hour ,” (PR Newswire release), Vending Marketwatch , October 30, 2020.

34. Janine Puhak, “ Starbucks to Raise Minimum Wage to $15 for US Employees over Next Three Years ,” WDRB.com , December 12, 2020.

35. Sanderson Farms, “ Sanderson Farms Increases Pay Rates for Hourly Employees ” (press release), June 3, 2019.

36. Kara McIntyre, “ Lidl to Raise Atlanta-Area Starting Pay to $15 An Hour ,” Patch (Atlanta, Ga.), January 5, 2021.

37. Henry Ford Health System, “ Henry Ford Among the First Michigan Health Systems to Raise Minimum Pay Rate to $15 Per Hour ” (press release), October 9, 2020.

38. Michael Kransz, “ Michigan Health System with 8 Hospitals Increases Minimum Wage to $15 an Hour ,” MLive.com , October 19, 2020.

39. Betty Lin-Fisher, “ Akron Children’s Hospital to Raise Its Minimum Wage to $15 ,” Akron Beacon Journal , October 3, 2019.

40. Kelly Gooch, “ Ohio Children’s Hospital to Boost Minimum Pay for 3,000 Employees ,” Becker’s Hospital Review , October 3, 2019.

41. Michaela Ramm, “ Mercy Announces Minimum Wage Increase, General Pay ,” The Gazette , December 22, 2020.

42. North Kansas City Hospital, “ North Kansas City Hospital and Meritas Health Raise Minimum Base Wage ,” December 21, 2020.

43. LifeBridge Health, “ Lifebridge Health Raises Minimum Living Wage for Hospital Team Members to $15 an Hour ” (press release), Greater Baltimore Committee, January 8, 2021.

44. Amalgamated Bank, “ Fight for $15 ” (web page), accessed January 22, 2021.

45. Amanda Mull, “ Corporations’ Social Crusades Often Leave Out Workers ,” The Atlantic , June 28, 2019.

46. Wells Fargo, “ Wells Fargo to Raise Minimum Hourly Pay Levels in a Majority of Its U.S. Markets ” (news release), March 4, 2020.

47. Scott Souza, “ Franklin Savings Bank Raises Minimum Wage in NH To $15 ,” Patch (Merrimack, N.H.), October 31, 2019.

48. Tomi Kilgore, “ Facebook Raising Minimum Wage to $20 Per Hour for Bay Area, New York and D.C. ” MarketWatch , May 13, 2019.

49. Charter Communications, “ Charter Statement Regarding Plans to Permanently Raise Minimum Wage to $20/Per Hour over Next Two Years for All Hourly Employees ,” April 6, 2020.

50. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

51. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

52. David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers , Economic Policy Institute, February 2019.

53. Paul J. Wolfson and Dale Belman, “ 15 Years of Research on U.S. Employment and the Minimum Wage ,” Tuck School of Business Working Paper no. 2705499, 2016.

54. Ellora Derenoncourt and Claire Montialoux, “ Minimum Wages and Racial Inequality ,” Quarterly Journal of Economics 136, no. 1 (February 2021).

55. Doruk Cengiz, Arindrajit Dube, Attila Lindner, and Ben Zipperer, “The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator,” Quarterly Journal of Economics 134, no. 9 (May 2019).

56. Arindrajit Dube, “ Minimum Wages and the Distribution of Family Incomes ,” American Economic Journal: Applied Economics 11, no. 4 (October 2019); Kevin Rinz and John Voorheis, “ The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data .” U.S. Census Bureau Center for Administrative Records Research and Applications Working Paper 2018-02, 2018.

57. George L. Wehby, Dhaval M. Dave, and Robert Kaestner, “Effects of the Minimum Wage on Infant Health,” Journal of Policy Analysis and Management 39, no. 2 (Spring 2020); Kerri M. Raissian and Lindsey Rose Bullinger, “Money Matters: Does the Minimum Wage Affect Child Maltreatment Rates?” Children and Youth Services Review 72 (January 2017); Lindsey Rose Bullinger, “The Effect of Minimum Wages on Adolescent Fertility: A Nationwide Analysis,” American Journal of Public Health , March 2017.

58. Peter Dorman and Lawrence Mishel, “ A Majority of Workers Are Fearful of Coronavirus Infections at Work, especially Black, Hispanic, and Low- and Middle-income Workers ,” Working Economics Blog (Economic Policy Institute), June 16, 2020.

59. Cristian Alonso, “ Beyond Labor Market Outcomes: The Impact of the Minimum Wage on Nondurable Consumption ,” Journal of Human Resources , forthcoming.

60. Ben Zipperer, “ Low-Wage Workers Will See Huge Gains from Minimum Wage Hike, CBO Finds ,” Working Economics Blog (Economic Policy Institute), July 9, 2019.

61. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

62. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

63. Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary, The Public Cost of a Low Federal Minimum Wage , University of California Berkeley, Labor Center, January 2021.

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Why Raising the Minimum Wage has Short-term Benefits but Long-term Costs

June 20, 2023 • 7 min read updated: april 29, 2024.

A new study determines that instead of large increases in the minimum wage, a better option for low-wage workers is a combination of a modest increase and tax credits like the EITC.

• Finance & Accounting
• Public Policy

The minimum wage has long been a controversial subject, especially with concerns that employers could exploit workers by paying them less than a fair wage. The prevailing federal minimum wage of $7.25 an hour has been unchanged since 2009, but many states, cities, and counties are poised to raise that to varying levels this year. Democrats have pushed for raising it to $15 an hour, and Sen. Bernie Sanders recently floated a plan to raise it to $17 an hour.

But raising the minimum wage does not automatically guarantee workers higher income, employment, and welfare in the long run, according to a new paper by experts at Wharton and elsewhere, titled “ The Macroeconomic Dynamics of Labor Market Policies .”

“A key question in evaluating the effects of a minimum wage will be: How easy or how hard is it for an employer to replace or substitute away from that worker?” said Wharton finance professor Thomas Winberry on the main driver of the paper. He co-authored the paper with Chicago Booth economics professor Erik Hurst , Stanford University economics professor Patrick Kehoe , and Stanford research scholar Elena Pastorino .

If an increase in the minimum wage requires a firm to, say, double the wages it pays to a worker, it may decide “to just not hire that worker anymore and instead do their production with another worker,” Winberry continued. However, it will take time for firms to reorganize their production practices in a way that no longer requires such workers, he added.

The authors suggested a more effective way to improve the long-run lot of low-income workers than large increases in the minimum wage. Combining existing transfer programs, such as the earned-income tax credit (EITC) or a progressive tax system, with a modest increase in the minimum wage provides even larger welfare gains for those workers, they stated.

A Framework to Study the Impact of the Minimum Wage

The authors developed a framework to study the impact of the minimum wage in the short run (three to five years) and the long run (beyond 10 years), including the ability it offers employers to substitute workers across different groups. They found that in the short run, both small and large increases in the minimum wage have small impacts on employment, while they increase incomes for workers who were earning less than the new minimum.

In the long run, the effects of the minimum wage differed depending on the size of its increase. With small to moderate increases in the minimum wage, “the wages of initially low-wage workers immediately increase and over time their employment increases as well,” the paper stated. “As firms progressively adjust their input use towards low-wage workers, these minimum wage increases have even more beneficial effects on these workers in the long run than in the short run.”

“A key question in evaluating the effects of a minimum wage will be: How easy or how hard is it for an employer to replace or substitute away from that worker?” — Thomas Winberry

But with large increases in the minimum wage, “firms have an incentive to substitute away from these workers, if the new minimum raises their wages well above the efficient level,” the paper stated. “Hence, large minimum wage increases have potentially substantial negative effects on the employment, labor income, and welfare of low-wage workers in the long run.”

The study looked closely at how firms can respond to changes in input costs such as a higher minimum wage. They could resort to “labor-labor substitution,” or replace workers, among those that have similar education profiles but vary in productivity; or they could do such substitution among workers across different education groups; or they could substitute between labor and capital.

The study included the capital component within labor substitutability, assuming that the types of capital investments determine the production processes a firm may use. Firms have limited flexibility in the short run to reorganize production, such as a bank replacing a teller with an ATM machine, but they would have more of those options in the long run, Winberry said.

Winberry pictured a setting for firms that pay their workers $8 an hour but now have to pay $15 an hour. “In the short run, firms aren’t going to get rid of all of these $8-an-hour workers right away, but instead pay the $15-an-hour minimum wage and keep them on,” he said. “So in the short run, the $15 minimum wage is actually quite good for these workers because their wage jumps right up, and firms can’t fire them right away because they’re stuck with the production processes that they have in place. Over time, as firms adjust their production processes, the number of workers they employ starts to fall.”

The size of the increase in the minimum wage has a lot to do with whether workers are better off in the long run. In the short run, a small increase from, say, $7.25 an hour to $8.50 (a 17% jump) raises the wages of workers in the lowest rungs, and it has a negligible effect on their employment, the paper stated. In the long run, the employment of those workers increases; small wage increases don’t hurt a firm’s profits too much.

Undesirable Long-run Effects for Some

A large increase in the minimum wage where it more than doubles to say, $15, no doubt benefits low-wage workers in the short run. But that ultimately hurts them in the long run. The paper pointed to “the potential paradox” of a large minimum wage policy: “In the long run without any countervailing force such as inflation, productivity growth, or other corrective policy, [a large minimum wage] hurts precisely the lowest-earning workers whose income it is supposed to support.”

The study showed that in the long run, a big jump in the minimum wage to $15 an hour lowers employment rates of approximately 60% of non-college workers who initially earned less. The earning losses are concentrated among a fifth of the workers who earned less than $10 an hour before the wage increase.

Specifically, in the long run, a $15 minimum wage reduces the employment of workers without a college degree by about 12%, the study found. Employment gains are concentrated among workers whose initial wage was already close to $15, or those who earned between $11 and $15.

Policy Takeaways

According to the paper, a “key drawback of the minimum wage is that it is too blunt a redistributive instrument to support the labor income of workers earning the lowest wages in the long run.” The authors offered alternatives: “Other policies within the U.S. tax and transfer system, which are better targeted to the population of interest, may be more effective at redirected resources to a larger group of workers, including those at the low end of the wage distribution, who are the intended beneficiaries of these policies.”

Winberry noted that the EITC, along with other labor market policies that are targeted at lower-income workers, are “ redistributive ” — it benefits people in the low- and middle-income brackets, but does not extend that benefit to higher-income workers. It also allows workers to claim a refund even if they did not have federal taxes withheld.

All considered, “a moderate minimum wage increase can play a valuable role in supporting transfer programs like the EITC,” the paper concluded.

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Politics of Poverty

6 simple reasons we should raise the minimum wage right now.

Ideas and analysis from Oxfam America's policy experts

The federal minimum wage—just $7.25 an hour—hasn’t been increased in more than a decade.

It’s time to raise the minimum wage. Today, millions of Americans do arduous work in jobs that pay too little and offer too few benefits. They serve food, clean offices, care for the young and elderly, stock shelves, and deliver pizza. They work these jobs year after year while caring for children and parents, trying to save for college, and paying their bills.

But despite their best efforts, these low-wage and essential workers are falling further and further behind. The federal minimum wage of $7.25/hr is locking millions—most notably women of color and single parents—in poverty.

The way we see it, if you work hard, you should earn enough to get by. That’s why efforts to raise the federal minimum wage to $15 to help Americans across the country are so important.

Here are six simple reasons why raising the minimum wage makes sense.

1. it is long overdue.

Since it was last raised in 2009, the minimum wage has failed to keep up with inflation, failed to keep up with average wages, and—most dramatically—failed to keep up with incomes of the top 1 percent and CEOs, contributing to America’s growing inequality crisis.

As a result, low-wage workers are not benefiting from economic growth and productivity. If the minimum wage had kept pace with productivity increases, it would be around $24/hr according to the Center for Economic and Policy Research. Just 30 years ago, the average pay gap between CEOs and workers was 59 to 1; by 2018, it had soared to 361 to 1 . The average CEO at one of the top 350 firms in the US made $21.3 million in 2019 , 320 times as much as the typical worker; a minimum wage worker still makes $15,080: a gap of 1,400 to 1.

2. It would address longstanding racial and gender inequities

Historically marginalized people, who do more than their fair share of low-wage work, would stand to benefit disproportionately from the bump. (For dramatic illustration of the disparate impact of a raise, refer to Oxfam’s map of low-wage workers in the US.)

According to the data from the Economic Policy Institute, while 27 percent of the total US workforce would benefit from the raise:

• 39 percent of Black and Latina women would benefit (vs. 18 percent of white men);
• 38 percent of African American workers would benefit;
• 33 percent of Latino workers would benefit; and
• 32 percent of women workers would benefit (vs 22 percent of men).

3. It would reduce poverty

The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce— 40 million workers —would see a raise in wages.

The pandemic has made this move even more urgent, as millions have slipped into poverty over the past year, and 11 percent of adults are now facing food insecurity.

4. It would fuel economic growth

The roughly $120 billion extra paid to workers would be pumped back into the economy for necessities such as rent, food, and clothes. Economists have long recognized that boosting purchasing power by putting money in people’s pockets for consumer spending has positive ripple effects on the entire economy.

In one recent poll, 67 percent of small business owners support the minimum wage increase to $15 an hour. They say it would spark consumer demand, which would enable them to retain or hire new employees.

And raising the wage doesn’t seem to compel employers to cut jobs. As states and cities across the country have raised wages, research has found no statistically significant effect on employment .

5. It would save taxpayer money and reduce use of government programs

When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations.  

In 2016, the Economic Policy Institute found that , among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-wage workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”

6. It’s what the vast majority of Americans want

Vast majorities (up to three quarters, including a majority across party lines) support raising the wage. In fact, over half the states have raised their minimum wages to restore basic fairness to the workforce.

All work has dignity and worth. We need to get our economy moving, prioritizing workers and families most impacted by the pandemic, specifically women and people of color. After more than a decade of hard work, low-wage workers deserve a bump to get them and their families out of poverty.

Find out how many people in your state would benefit from raising the minimum wage.

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The Minimum Wage Debate: Why America Needs a Raise

• Categories: Minimum Wage

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Words: 526 |

Published: Mar 8, 2024

Words: 526 | Page: 1 | 3 min read

Table of contents

Introduction, improving income of low-wage workers, addressing wage inequality, economic benefits.

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Minimum Wage - Free Essay Samples And Topic Ideas

The concept of a minimum wage, a lower earnings limit set by law or regulation, has been a subject of extensive debate and analysis. Essays could delve into the historical evolution of minimum wage policies, the economic theories surrounding it, and the impact of minimum wage increases on employment, poverty, and income inequality. They might also discuss the differing views on minimum wage adjustments, exploring arguments from both supporters and opponents. Discussions could extend to the real-world examples of minimum wage implementations, comparing the outcomes in different regions or countries, and analyzing the broader implications of minimum wage policies on economic welfare and social equity. A substantial compilation of free essay instances related to Minimum Wage you can find at PapersOwl Website. You can use our samples for inspiration to write your own essay, research paper, or just to explore a new topic for yourself.

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How To Write an Essay About Minimum Wage

Understanding the concept of minimum wage.

Before writing an essay about minimum wage, it's crucial to thoroughly understand what it entails. Minimum wage is the lowest remuneration that employers can legally pay their workers. It's a significant economic and political issue, with debates focusing on its impacts on poverty, employment, and economic growth. Begin your essay by defining minimum wage, including its history and the variations that exist in different countries or states. This foundation will set the stage for a more in-depth exploration of the topic in your essay.

Formulating a Thesis Statement

A strong essay on minimum wage requires a clear and focused thesis statement. Your thesis should present a specific viewpoint or argument about the minimum wage. For example, you might argue that raising the minimum wage is essential for reducing poverty, or conversely, that it could lead to higher unemployment rates. Your thesis will guide the direction of your essay, providing a clear path for your argument and ensuring that your essay remains focused and coherent.

Gathering and Analyzing Data

To support your thesis, gather relevant data and research from credible sources. This might include economic studies, government reports, and expert opinions. For instance, if you're arguing that increasing the minimum wage boosts the economy, you'll need to find economic data that supports this claim. Analyze this data critically, considering different perspectives and the quality of the evidence. Including a range of viewpoints will strengthen your argument and demonstrate a comprehensive understanding of the topic.

Discussing the Impact of Minimum Wage

Dedicate a section of your essay to discussing the various impacts of the minimum wage. This could include its effect on poverty, employment, small businesses, and the overall economy. Discuss both the potential benefits and drawbacks, and relate these back to your thesis statement. For instance, explore how a higher minimum wage might lead to increased consumer spending but could also result in higher operating costs for small businesses.

Concluding Thoughts

Conclude your essay by summarizing the main points of your argument and restating your thesis in light of the evidence and discussion provided. Your conclusion should bring together your analysis and offer a final perspective on the topic. This is also an opportunity to highlight any areas where further research is needed or to suggest potential policy implications based on your findings.

Final Review and Editing

After completing your essay, it's essential to review and edit your work. Ensure that your arguments are clearly articulated and supported by evidence. Check for grammatical accuracy and ensure that your essay flows logically from one point to the next. Consider seeking feedback from peers or instructors to refine your essay further. A well-crafted essay will effectively convey your insights on the minimum wage and demonstrate your ability to engage with complex economic and social issues.

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Raising Minimum Wage in the US Essay

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Examining the Validity of the Articles Arguments

The current competitiveness of the american workforce, works cited.

The article “Raising minimum wage would ease income gap but carries political risks” examines the proposal of President Obama to raise the current minimum wage within the U.S. from $7.25 an hour to $9 an hour (Lowrie, 1).

His argument centers around his view on how American minimum wage at the present has failed to keep up with the increase in the price of goods and services and, as a result, needs to be increased in order to address the issue of income disparity between the various consumer groups at the present (i.e. the poor, the middle class and high income families) (Hicks, 24).

However, the article goes on to mention that despite the justification behind the request to raise the minimum wage, the author believes that it would be difficult given that the issue is not only a political one (i.e. the Republicans within Congress are sure to veto the request) but an economical one as well given the potential on how higher minimum wages would result in companies leaving the U.S. for destinations abroad where it would be cheaper to manufacture their goods (Lowrie, 1).

When examining the article there are two distinct factors that come to mind:

a.) The competitiveness of the American workforce

b.) The current economic recession that continues to impact the U.S. economy

The main problem with the proposal of President Obama lies in what the article states as the possibility of companies leaving the U.S. due to the increased cost in business that would come with higher minimum wage levels.

With globalization in effect enabling a company to transfer its manufacturing and operations divisions from one country to the next, it would be easy for a company to transfer their current operations from the U.S. into some other country. Not only that, with the ease of outsourcing at the present, this would result in job loss for millions of workers within the U.S. as companies attempt to find cheaper labor alternatives.

On the other end of the spectrum comes the article “minimum human wages” which states that due to monopsony power within the labor market is it likely that increases in minimum wage at the lower end of the employment scale would actually cause an increase in the higher end of the spectrum as well (The Economist, 1).

This comes about as a direct result of employees becoming motivated to work harder due to higher minimum wage levels resulting in increased company productivity. In fact, the article even compares the situation between the U.S. and Britain and explains that increases in minimum wage may not necessarily result in a considerable level of outsourcing but would instead result in greater levels of automation.

For example, jobs that used to require people such as tellers and greeters could eventually be replaced by automated processes. The only reason why this has not been done yet is due to the fact that some companies still perceive employee wages as a more affordable alternative to automation. With a minimum wage increase this may in fact tip the balance resulting in more automated processes which would create better operational savings for a company.

It is based on this that it can be stated that while the article was able to show one of the possible scenarios that could occur, it neglected to delve into other possible outcomes some of which may in fact be positive.

It should be noted though that in a labor market that is controlled by a monopsony seller, the establishment of a minimum wage would actually result in a reduction in unemployment as the seller adjusts rates based on the established wage. However, this is based on a monopsony market and not all markets within the U.S. are classified as such.

When taking into consideration the section on outsourcing and comparing it to the competitiveness of the U.S. workforce, it immediately becomes obvious that an average American worker is simply paid far too much as compared to their counterparts in the other countries who do the same level of work.

Aside from salaries, companies need to take into account extensive healthcare benefits, 401K plans as well as an assortment of other costs associated with hiring someone from the U.S.

While some companies continue to base themselves in the U.S. through various cost cutting measures such as workforce reductions and creating more efficient methods of operation, the fact is that as soon as an increase in minimum wage will be applied the cost of operations for them would increase by several million dollars. This creates the possibility that in order for them to survive they would need to shift operations to other countries where the cost of doing business is lower.

Overall, I would have to say that the article was right in stating that an increase in the minimum wage of the U.S. could possibly result in companies leaving the country. While President Obama is right in thinking that wages should match the increased cost of products, the fact is that right now is the worst possible time to implement such an endeavor.

Consumer demand within the U.S. has yet to increase to significant enough levels while at the same time companies are all too willing to leave the U.S. due to the increasing cost of doing business. Based on what I have learned about labor economics, I would have to say that this is a terrible idea and would result in job loss as companies scramble to find some degree of profitability which usually consists of terminating workers to do so.

Hicks, Mike. “Stagnant Pay For Low-Wage Workers A Problem.” Indianapolis Business Journal 33.53 (2013): 24. Regional Business News . Web.

Lowrie, Annie. “Raising Minimum Wage Would Ease Income Gap but Carries Political Risks.” New York Times . 13 Feb 2013: 1. Web..

The Economist. “Minimum human wages.” The Economist . Theeconomist.com, 15 Feb 2013. Web.

• Sarbanes-Oxley Act of 2002/Methods of Depreciation
• The Economic Analysis: Outsourced (2006)
• The Pros of Raising the Canadian Minimum Wage
• Fixing an Initial Minimum Wage
• The Raising the Minimum Wage Article by Scott
• Liquidity in the Financial Market
• Macroeconomic Issues Related to the Federal Deficit and the National Debt
• France’s Economy: Five Key Macroeconomic Variables
• Introduction to Macroeconomics: Sequestration and Its Impacts on an Economy
• Property, Urban Poverty and Spatial Marginalization
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2019, April 16). Raising Minimum Wage in the US. https://ivypanda.com/essays/raising-minimum-wage/

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IvyPanda . 2019. "Raising Minimum Wage in the US." April 16, 2019. https://ivypanda.com/essays/raising-minimum-wage/.

1. IvyPanda . "Raising Minimum Wage in the US." April 16, 2019. https://ivypanda.com/essays/raising-minimum-wage/.

Bibliography

IvyPanda . "Raising Minimum Wage in the US." April 16, 2019. https://ivypanda.com/essays/raising-minimum-wage/.