Federal Minimum Wage in the United States Essay Sample

Whether the current federal minimum wage in the United States should be raised or not is a divisive issue. Some say it’s a necessity and that it would benefit us greatly while others deny that fact and say that it would cause problems in the future for many Americans. Nevertheless, it is crucial to look at all of the facts as the decision will have a huge impact on the nation. Generally, it’s hard enough for people today to earn good money, so increasing the minimum wage can give them a good boost before earning money with their future job, however, on the other hand, there could also be problems or setbacks that stand between this idea.

The Federal Wage in the United States in 2021 stands at $13.50 per hour, with many Americans living paycheck to paycheck. If a typical minimum-wage worker worked a typical 40-hour week schedule, without taking a vacation (52 weeks), they would earn around $28,080.00 per year (USAFacts). That being said, based on the research using data from the Bureau of Labor Statistics, the average necessary living wage across the United States is $67,690, with the lowest being $58,321(Mississippi) and the highest being $136,437 (Hawaii). However, the average American working 40 hour weeks on minimum wage falls below even the lowest state’s liveable wage (Taylor). 

This is a crisis considering the Bureau of Labor Statistics finds that minimum wage workers made up 58.1% of all salary and wage workers in the United States in 2019, which is around 82.3 million people. A huge percentage of those people are one of if not the only breadwinners for their families. A higher minimum wage would help these families rise over the poverty line, and thus fewer people would be reliant on overcrowded underfunded government aids. 

A huge portion of low-income housing is reliant on the incomes of women. After examining all federal minimum wage increases from 1979 to 2012, a key pattern found was the minimum wage has large effects on female wage inequality. It was found that generally women are paid less than men, and therefore dip closer to the bottom of the wage pool. The study also found that in the 33 years documented, women made up the majority of “tipped workers”, which include professions such as waiters, bartenders, bellhops, etc (Equitable Growth). This is an additional obstacle for women working minimum wage as the restaurant industry is very reliant on tips, as the federal minimum wage for restaurant workers is $7.25 (which comes to a total of $15,080 per year)(Equitable Growth).  

If people earned more money from minimum wage ($15) then the economy itself would rise because many people would be getting more money for their hard work at whatever job they have and they can also support themselves and others better. If Americans were to earn a bit more while working for a minimum wage it would give them a better boost so that they can thrive much faster than if they were earning less. This is best demonstrated in the article “The $15 Hourly Economy” by Chris Anstey. Anstey talks about how raising the minimum wage to $15 an hour benefits Americans greatly because of how people get more out of what they are working for than if it was less. “Several large employers, including Walmart, Target, Best Buy, and Chipotle Mexican Grill, are bumping up starting or average hourly pay to $15 or more. Amazon.com Inc. recently announced it was boosting average starting wages for open logistics jobs to $18 an hour.” With some of these large companies raising to $15 an hour, along with some companies going as high as $18 an hour, it so far shows that this is something that can benefit millions of Americans working for minimum wage, they can build and grow off of this first and then when they go to get their actual career jobs, they will make more there of course and have the money that they have been looking for for a long time. “Now, less than 20% of U.S. workers make below $15 an hour. And while a new nationwide minimum isn’t on the cards, for now, about 40% of the U.S. workforce lives in states where the level is mandated to rise to $15 an hour, according to estimates by the Economic Policy Institute.” So many more Americans are benefiting more while earning a higher minimum wage.

However, there are still many different reasons why a raised minimum wage would be a huge problem for the United States. One reason is that raising the minimum wage will cause job loss and increase the price of goods. Additionally, it would increase housing costs. Raising the minimum wage could also harm certain workers. This is because some of them may feel defrauded, affecting their productivity and morale.

Many arguing against raising minimum wage point to the potential job losses that will result from businesses absorbing the costs of having to pay employees more. A recent report from the Congressional Budget Office estimated 1.4 million jobs would be lost by the time the federal minimum wage reaches 15 dollars in 2025 and would increase the federal deficit due to increased spending on federal programs such as Medicaid (Cox, 2021). 

For businesses to maintain a profit after an increase in wages, they must increase the price that they charge for goods and services. This in turn causes the price for goods and services to increase which results in inflation. With prices going up it would make paying for things that are normally cheaper more expensive. So going out to eat at McDonald’s would cost you a lot more and it would almost be the equivalent of paying for a dine-in restaurant (Rosalsky,2021). 

Raising the minimum wage would have a major effect on the housing market. This is because workers will have more money to compete for the same low inventory of rental units that's available. By increasing wages it allows landlords to raise rents as tenants are willing and able to pay more (ProCon.org,2019). 

In conclusion, raising the minimum wage will have both positive and negative impacts on our economy, and will affect many people differently. Plenty of people will be lifted away from the threshold of poverty with an increase of the minimum wage, while many others may lose their jobs entirely, making their lives more difficult.  Some businesses may have to raise prices to compensate for the high wages they must pay their workers if a minimum wage increase is to pass. In the end, the results aren’t always 100 percent certain, but a $15 minimum wage could be just on the horizon.