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Efects of Minimum Wage

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Submitted By bmunoz
Words 820
Pages 4
Effects of Minimum Wage in Our Economy
Barbara Munoz
Dr. Pieper
Kaplan University

Upon receiving a paycheck, many feel it is simply not enough. On the other hand, employers may disagree. Minimum wage is the least amount of money an employer can pay their employees. Some argue that this said wage is not enough for average living expenses, while others feel that those who get paid minimum wage are paid what they are entitled to. Currently, the controversy is mainly regarding whether or not the federal minimum wage should be raised. An increase in the minimum wage raises the standard of living for impoverished workers. Nonetheless, this may have an adverse reaction in the economy.
Minimum wage has not been changed since the last time in 2009, it was raised to $7.25. Ever since then, “the federal minimum has lost about 5.8% of its purchasing power to inflation.”( It is eye opening to realize that inflation goes up every year, yet minimum wage has only been raised three times in the last three dacades! Since the buying power of the dollar bill has decreased, it is harder for families that earn minimum wage to survive. Even though their money is worth significantly less, they still need to pay the same or increased prices for groceries, utilities, and rent.
On the other hand increasing the minimum wage could have a negative effect on economy as well. The current plan is to try to increase the amount gradually to $10.10 by 2016. The projected problem will be that the price of having employees will be too outrageous for companies. Therefore they will start to lay off employees. “Hiking the minimum wage gradually to $10.10 an hour could cost 500,000 jobs by 2016.”( Which obviously puts the country in a bigger whole. Even if they started by increasing the wage to $9 and hour, it could still potentially leave up to 100,000...

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