Minimum wage is the subject of a huge debate. As a matter of fact minimum wage has always been the subject of huge debate. The pros and cons of minimum wage are really focused on the mandatory raising or minimum wage.
Minimum wage is the amount of pay that is required to be paid an employee at a minimum. Advocates that think the minimum wage should be raised to reflect the cost of living more accurately have some very valid points but so do the people that are against raising the minimum wage.
There are some undeniable facts about minimum wage that both sides have to agree is true. Minimum wage is meant as an entry level pay minimum. When it was developed as a guideline the theory was that it would offset poverty by requiring business owners and corporate entities to pay a wage that would raise people up out of the poverty level and remove the need for government assistance.
Minimum wage has not kept up with the cost of living averages (COLA). As the cost of living has jumped by leaps and bounds minimum wage has barely made an impact. This depression era law fueled by politics started out to guarantee workers a living wage of $11 a week in 1933.
Since its inception minimum wage has been a hot topic. Today minimum wage is actually 11% lower value wise than it was in 1933. One of the largest increases it has ever experienced was in 2009 when it went from $5.15 to $7.25 but still did not compare to the level of inflation.
Given the facts it would seem that raising minimum wage would be the answer. The reality is not quite as cut and dry as the con’s of minimum wage shows. There is a tightrope between the pros of raising the minimum wage and the cons of it.
1. The pros of minimum wage include a standard that corporate entities have to adhere to. It provides businesses with a mandate of what they have to pay their employees. It is a way to protect workers from less than fair employers.
2. The pros are clearly not as valuable as they were when the laws governing minimum wage were first started. They started as a decent wage but today most proponents of the laws will admit that the wages have become a trap of sorts.
3. Increasing minimum wage to reflect a “living wage” is not as simple as simply raising the rate. There are pro’s to raising the minimum wage. The pros of raising minimum wage would be an immediate increase in income for the working poor.
4. Of course that money that was paid in the form of higher wage would be funneled back into the economy which was improve the economy. People that worked for minimum wage would no longer have to be reliant on federal programs to make ends meet.
Unfortunately that is the most simplistic way to look at an increase of minimum wage into a living wage.
1. Minimum wage is a dual edged sword. Yes it sets a standard that has to be adhered to by employees BUT it also sets the standard rather low. Employees do not have to pay more than the minimum wage so they do not. They do what is minimal required. While the law was not written in the spirit that this should be THE RULE when it came to salary most big businesses have taken full advantage of paying this sub par wage.
2. Increasing minimum wage also has its disadvantages that can seriously effect workers. If minimum wage was increased by a mere 30% most workers would lose over 91% in government benefits. For people that work and depend on the government for some sort of subsidy like food stamps (the food and nutrition program through the USDA) they would lose the bulk of the assistance which would NOT make up for the loss of benefits.
3. In addition to the cost of losing benefits it would also increase tax liability for the people that can least afford the loss.
4. While many critics site the effect that a substantial increase in minimum wage would have on the economy like higher prices for food and other essentials this is actually not a REAL con of minimum wage increases. The profit margins that these large companies experience can easily withstand an increase in wages without having to pass it on to the consumer.
5. As a matter of record that con is largely unfounded because studies have shown that the higher wages actually helps to increase spending in the economy and increases overall growth of the economy.
There are pros and cons to minimum wage but for right now it is the only safety net there is that helps to protect non unionized workers.