Minimum Wage Research Paper Example

Almost 11.4 percent of people in the USA live in poverty; that equates to 37.2 million Americans , living with enough money to keep themselves barely alive. The US has been trying to solve this national crisis for decades, and the minimum wage is part of that effort. However, some critics argue that the minimum wage must be raised higher to have fairer wages to low-income families and individuals, restoring balance in the economy. Others argue about the many factors that raising the minimum wage could affect. The effects a higher minimum wage could impact on the current society and economic system is great. But, not in a good way.In my opinion, the minimum wage should not be raised to a living wage because it is not effective, causes strain on the economy, and causes distress for the people.

If we decide to raise the minimum wage, we must first evaluate its effectiveness. Unfortunately, the effectiveness of a higher minimum wage is not high enough to provide substantial support to people and families living in poverty. For example, changing the minimum wage would impact people differently in different places. A fifteen dollar minimum wage in New York would have a small impact( since they already have this wage implemented), but a 15$ minimum wage in Alabama can cause a greater number of people to struggle financially and economically. This shows that a minimum wage cannot provide support over a wide area( such as the diverse economic systems in the USA), which shows it is ineffective. Though the minimum wage targets people that have a low wage, these people could come from a richer family. This means that with the application of  higher minimum wage, this family(which could be “ rich” ,or not in poverty) could get extra funds. This shows that raising the minimum wage is not effective in specifically targeting low-income families. The ETIC, an alternative, can effectively  target families with higher financial needs, and by providing certain people with financial aid, they can rise out of poverty, and live a more comfortable life, with a so-called “ living wage''. With the EITC implemented into the economic system, it can both provide low income families with a comfortable life, as well as not giving extra funds to financially-privileged families. This gives balance to the economy, and therefore, the living wage( or raised minimum wage) should not need to be implemented due to its ineffectiveness. Thus, the minimum wage should not be raised because it is not effective in providing support to low income families, and there is a better alternative. 

By raising the minimum wage, it would cause strain on the economy. These strains include problems that affect the working-force( the people), therefore affecting the economy. The next few sentences will explain how these conflicts could be formed with a raised minimum wage and its impacts on the economy. A process called “ Cost Push Inflation” can happen when minimum wage increases. This leads to higher production costs, leading to high product costs, so the customers would have to pay more to obtain items or services. This effect can cause a financial strain on customers by making them pay more, which forces them onto a  higher living cost. This effect can also affect the economy since it would make it unstable in terms of supply and demand. As concluded by the researchers at the University of California in Los Angeles, raising the minimum wage would allow people to be more competitive in terms of housing, which could lead to an increase in rental prices. Because there are low amounts of  rental units, and there is a high amount of demand, housing costs would become higher. Higher living costs can cause a financial strain on the customer, which impacts the economy. Raising the minimum wage could also cause unemployment because companies and administrations may not need as much labor as before.Neumark and Shirley, UC-Irvine economists, read every published study of the correlation of minimum wage and employment, and they conclude that higher minimum wage led to less employment. Unemployment can lead to multiple other factors that affect the people, and those effects will be explained in the next paragraph. As concluded from the evidence above, the effects from a higher minimum wage is not positive and beneficial to the economy. 

Additionally, raising the minimum wage would put emotion and financial distress on people. In this section the idea of unemployment occurring from higher minimum wage is a key factor in the effects on the people. These financial strains can also cause emotional strains, which allow people to make bad choices. The economists in Boston College concluded that since increasing minimum wage leads to unemployment, it could cause increased illegal activities and crime rates. The presence of illegal and unsafe working conditions may be more prominent since many workers are willing to work illegal tasks since they think illegal work is better than no work. So, if there is an increase in minimum wage, it would lead to an increase in unemployment rates, and therefore higher crime rates based on the people’s financial desperation. Thus, raising the minimum wage would put financial and emotional strain on one’s mind, eventually leading to more negative impacts to themselves and the environment around them. 

However, raising the minimum wage to a living wage has some conflicting evidence. According to some sources, raising the minimum wage could improve people's lives and strengthen the economy. The Congressional Budget Office( CBO) released information that “ makes clear that the benefits of a 15$-an-hour minimum wage would heavily outweigh the downside,” states Michael Hiltzik at the Los Angeles Times. Another source claims that 1.3 million people would be lifted out of poverty, and 27 million Americans would have higher wages. The EPI(Economic Policy Institute) states that raising the minimum wage would generate additional wages,allowing families and the economy to gain more economic stability and activity. Nevertheless, none of these sources counteract the idea of minimum wage being worse than EITC. They do not show both sides of the argument; they only show statistical data for a high minimum wage, and there is no statistical comparison with EITC. This shows that there are alternatives that can achieve better results, and that the minimum wage should not be implemented. 

The possible positive outcomes of raising the minimum wage is doubtful. This is because raising the minimum wage would not be effective( there are better alternatives),  causes strain on the economy; and as a result of the economy worsening, the people of the economy will fall too. Research has shown that raising the minimum wage would not have significantly positive impacts on the economy and it does not seem beneficial in raising poor people out of poverty. There are, however, alternatives that can effectively target poor people, which shows that the minimum wage is not effective. Research also shows that there are many negative outcomes that could impact the economy, and therefore the people of the economy. Though there is conflicting evidence that shows that it could have good impacts, the downsides and the reasons shown above outweigh the upsides. In conclusion the minimum wage should not be raised because it is ineffective, causes strain on the economy, which leads to distressed humans in the economy.