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Kyle Cordova
Mrs. Litle
Eng 121
7 April 2017
Is More Money Better?
In recent years it has been debated on what the minimum wage should be. It usually

reflects upon the state of the economy. It closely mirrors what is needed to live and sustain the

average persons living expenses. However, its been debated that the minimum wage isnt

enough to live off of. This has many factors to consider what is livable. For example some

people may say that a cell phone is a necessity and the same could be said for internet. It would

also depends on the community that you live in that determines the price of housing etc. The

conclusion that quite of few people and what seems to be the simple answer would be to raise the

minimum wage. It seems simple enough right? Just raise the minimum wage? Well, the economy

is a little more complex and raising the minimum wage isnt such a great idea.
However, I think we should look at the side that wants to raise the minimum wage so we

can get a better understanding of where theyre coming from. Their goal is to help alleviate some

of the poverty by increasing the money they can earn from minimum wage jobs. Last February,

the Congressional Budget Office estimated that raising the national minimum wage to $10.10 an

hour from $7.25 would lift 900,000 people out of poverty. Another thing raising the minimum

wage is said to do is The gains from a higher minimum wage extend beyond those who receive

it. More money in the pockets of low-wage workers means more sales, especially in the locales

they live in which, in turn, creates faster growth and more jobs.
Raising the minimum will cause a domino like effect and not for the better like one

would hope. One result is that it will hurt small businesses. Business owners will have to adjust

to the spike it will cost to pay their employees. They will be sitting at the same profit before the

increase and they will need to decide on how they are going to change to compensate for the

wage increase. They will have usually about two options. One of them will be cutting
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employment and being warier to hire another employee that they wont be able to afford. This

impacts unemployment rates and is a pretty big hit to poor families that the wage raise was trying

to help in the first place.

The second option that business owners have is to raise the price of the products to

increase profits so they can pay their employees. This will most likely probably decrease sales

due to the price increase of there goods leaving them at the same or very similar profits to before

the decision to raise the prices. This option does not help the employer or employee. The result

of raising minimum wages is going also impact new workers and less skilled workers. They

will have trouble finding jobs because employers wont be looking to hire any more employees.

This will impact the rate of teen employment.

The price of goods is bound to go up with the minimum wage. This leaves the people

working for minimum wage in the same situation before as the money increase will end up

paying for the increased cost of goods. However, the minimum wage doesnt consider the people

making higher than minimum wage. The people that do make more will be paying more even

though their paycheck isnt likely to see an increase. This will leave them with less spending

money. This will result in devaluing of the dollar.

Another thing to consider is the effect it can have on taxes. You can only take so much

out of a dollar when it comes to specific percentages like the ones with decimals. (25.4%) . As an

example, 25.4% of a dollar is only really like 25 cents because there isnt a 0.4% of a cent. If you

do the same to 10 dollars 25.4% of it is $2.54. While this is probably really situational it has the

potential to hurt people in poverty.

The main goal of raising the minimum wage is to help people in poverty. However, it will

most likely not have an impact on poverty rates according to Mark Wilson. Mark Wilson states

In the American economy, low wages are usually paid to entry-level workers, but those workers
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usually do not earn these wages for extended periods of time. This means that people usually

advancing to better paying jobs.

The raising of minimum wage doesnt consider the price of living in different areas. Such

as the cost of living in Los Angeles is much higher than it is in La Junta. These should be taken

to account before raising the minimum wage federally. In Seattle for example the cost of living

was much higher than other places so living there on just minimum wage is difficult for most

families. Their solution to this was to raise the minimum wage but as we seen that can be a

slippery slope as the economy is quite complex and fluctuate with any differing inputs.
I do believe that we should be doing something about poverty. However, I dont think a

change such as raising minimum wage is going to help. Were essentially barking up the wrong

tree. As you can see doing a change such as raising the minimum wage can change the whole

economic ecosystem. Raising the minimum wage can result in a loss of jobs, it will hurt less

experienced workers, it can result in higher prices for the consumer and it would have little or

possibly negative effects on poverty.

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Dunkelberg, William. "Why Raising The Minimum Wage Kills Jobs." Forbes. Forbes Magazine,

12 Feb. 2013. Web. 20 Apr. 2017.

Reich, Robert, and Former Labor Secretary. "We should raise the minimum wage: Reich."

CNBC. CNBC, 27 Apr. 2015. Web. 20 Apr. 2017.

"Why we shouldn't raise the minimum wage." AEI. N.p., n.d. Web. 20 Apr. 2017.

<https://www.aei.org/publication/why-we-shouldnt-raise-the-minimum-wage/>.
https://object.cato.org/sites/cato.org/files/pubs/pdf/PA701.pdf