The Congressional Budget Office has recently released a statement saying that raising the minimum wage from $7.25/hour to $10.10/hour could cost around 500,000 jobs.
What do people on each side have to say about this?
Supporters of the wage increase point to the figure that says this increase would put 900,000 families above the poverty rate. Also, many agree that those who make over $10.10/hour could see increases in their pay as pay scales are adjusted by bosses. The author of the legislation, Sen. Tom Harkin D-Iowa, points to different research contrary to the CBO’s, stating higher minimum wage would increase the number of jobs.
Those against the wage increase look to the CBO statement and Economics 101 about what happens when minimum wage is increased. Jobs will decrease. When the price of work goes up, the demand of work goes down. Companies are in the business to turn a profit, and as the minimum wage increases, the less money they are able to walk away with. This motivates them to cut low end jobs. Those against also say that our goal is to get more Americans out of unemployment, and raising minimum wage would hurt that goal.
The way I see it, it all depends on what you value more. If you are looking to pay people more for doing less prominent jobs, raise minimum wage. If you are looking for more jobs, keep the minimum wage lower. I think that it is better to bring more people out of unemployment than to raise people’s pay for doing the same job, but I recognize both sides have solid arguments.
Thoughts? Comment below to weigh in.
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