Essay about Minimum Wage and Economy

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Minimum Wage
The Value of a Dollar Meg, I know that you are younger and think that minimum wage should be increased, but there are some positive factors and some negative ones that come into play too. I know the only thing you’re thinking about is making more money while working as a teen, but teens are not the only people that raising it will affect. It affects the employees of businesses, small businesses, and the economy as well. Some people think that there should be no minimum wage at all, and that employees should get paid on the amount of work that they do and the quality in which it is done. By rising it could have many negative impacts in the long run as well as short term effects too. Take a second to educate yourself on other factors before coming to the assumption that it is purely going to be a positive impact.
The first standard of judgment is the effect on employees. Most people who are obtaining minimum wage pay are slightly over the poverty level in the United States. An adult working 40 hours per week at minimum wage makes a salary of 15,080, the federal poverty threshold is 15,130, slightly higher than the salary they are receiving, and raising the minimum wage will put those people out of poverty. Although 75% of those people earning it work less than 35 hours a week, which means that people are not working minimum wage jobs as their main job, they are working it part-time for extra money. Only 21% of those people earning minimum wage are the main incomes in the threshold, so there is another person working a higher pay job. Raising the minimum wage will positively impact the employees earning it, because it will increase their income and yearly salary and put them out of poverty. It will make it easier for them to keep up with the cost of living in our rapidly growing economy. With the people making more money, it will give them extra money for them to spend and put back into the economy, buying things that they could never afford off of the minimum wage salary. The 21% of people who are receiving minimum wage and are the main income in a threshold will have more money to provide, and may help them get off the use of public assistance. The next standard of judgment is the effect on small businesses. Business owners will have a better opportunity to hire more skilled workers, because higher pay will bring more competition for a job. The reason that companies pay employees minimum wage is because of the competition they have with other small businesses. If small businesses are struggling now, than rising it could cause companies to shut down or slow down due to the lack of funds. Companies have more costs to account for than just paying the employees and if they are being demanded to pay them more than other aspects of the company may go downhill. Small businesses’ yearly revenue will decrease due to the raise in minimum wage. Businesses will have to decrease staff by laying-off employees; they may have to cut hours of employees to make up for the money they are losing by paying employees more. Also by having to pay the employee more they will have less money to spend on promoting the business, less money will be spent in marketing aspects which may lead to a decrease in customers. Small businesses will not be able to hire new employees due to insufficient funds and unemployment will continue. Not to mention the fact that it is already a difficult task to open a small business, because 95% fail within the first 5 years, what do you think will happen if they will have to start off paying workers more? More and more small business will begin to struggle and fewer companies will open and be successful which will lead to less job opportunities in the economy. Another standard of judgment is the impact on the economy. By paying employees more will give more money to dispose into the economy. Raising the minimum wage from $7.25 to $8.50 would inject an estimated 9.5 billion dollars of extra
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