Should the Minimum Wage Get an Increase?

There has been a great deal of debate recently about raising the Federal Minimum Wage. It has been mentioned many times in recent campaign speeches by members of both parties. But, is it really necessary? Wouldn't employers hire fewer workers if they had to pay them more?

In an attempt to answer these questions, I looked into the matter and was surprised to find that the national minimum wage is much more important to our country's economic health than I had initially assumed. Although states are free to set their minimum wage above the federal minimum, and many of them do, right now, the federal minimum is $7.25.

Basically, the federal minimum is a baseline, making it illegal for a company or state to pay workers less than this amount. It's a place to start, not a ceiling. Many low-wage workers struggle to support their families on this amount and almost all of them are stuck in working poverty.

Whenever someone suggest that the minimum wage be increased, the corporate world baulks and says that those types of increases will lead to rampant job loss and that the low-wage workers will be pricing themselves out of the labor market. On the surface, it sounds like a compelling reason to keep the minimum low in order to keep jobs. After all, something is better than nothing.

However, when you look at history, it becomes clear that raising the federal minimum doesn't decrease jobs at all. In fact, it increases them. There are several reason why the country as a whole would benefit from a raise.

Companies are making higher profits by paying out less for labor - As corporate bonuses grow larger and larger, it's only fair that the people struggling on the bottom should make a little more as well. People need to be able to live on the wage they earn, and currently, it's next to impossible.

It improves productivity - Higher wages reduce turnover and job vacancies. This makes companies more efficient and prevents the wasted money and manhours spent recruiting and training new workers who will leave in a few months or a year.

It doesn't effect the majority of workers - People who earn minimum wage make up only a small percentage of the current workforce. Allowing them to earn a little more won't cause rampant job loss. With less than 10 percent of people being affected, the impact on business as a whole would be small.

To stimulate the economy - The people who are earning minimum wage aren't likely to be ones who will put the extra money they earn into a savings account or money market account. Already, they don't have enough money to make ends meet and the extra income will go back into the economy. Putting more money into the hands of low income families is a proven way to stimulate the economy because those extra dollars will be spent on things that the family needs, raising corporate profits and increasing sales.

I think that the need for an increase in the minimum wage is self-evident. It still remains to be seen what the future will hold, but I think that it's very likely that over the course of the presidential campaign, this issue will become a main point.


Do you think the federal minimum wage should be raised? Why or not? Please share your thoughts in the comments.

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