The Positive and Negative Effects of Raising Minimum Wage

A sensitive topic for many Americans is their income. Many people’s income relies on minimum wage. In 2012, 3.6 million people received an hourly pay at or below minimum wage. There is an ongoing debate in government as to what the minimum wage should be. Stuck at $7.25, Obama has suggested raising the minimum wage to $9.00. Depending on a person’s perspective, raising minimum wage could be positive or negative. Minimum wage has the ability to change lives, and change the economy. Small businesses and unemployment, teenage demographics, and the cost of civilian goods would be most affected.The only mystery is whether things would change for the better or for the worse. Many areas could be affected by a change in minimum wage, but†¦show more content†¦The extra money could come from the company’s investors, in the form of lower profits; customers, in the form of higher prices; or workers, in the form of fewer jobs. Since the marketplace is very competitive, businesses will resist lowering investors’ profits and raising prices for customers because of the potential risk of losing them. This leaves only providing fewer jobs as a way to get the money they need to afford an increased minimum wage.There are always exceptions, but historically, businesses have financed increases in the minimum wage by laying off minimum wage workers.If this was to happen, the national unemployment rate, currently stuck at 7%, would skyrocket. This would be detrimental to low income Americans.Instead of helping low income families, many could end up losing their source of income. As time goes on, the unemployment should lower, but the initial spike i n unemployment could hurt many families and lives. Specifically, teenagers would be critically affected by an increase in minimum wage. Many teenagers are working, and most of their jobs are minimum wage jobs. Half of minimum wage employees are under the age of 25. According to Sherk 62 percent of minimum wage employees are enrolled in school during the non-summer months. A lot of teenagers would see themselves without a way of income if the hourly-wage is increased. The last increase in minimum wage resulted in thousands of teens losing their jobs, leaving the teen unemployment rate stuck atShow MoreRelatedRaising The Federal Minimum Wage889 Words   |  4 Pages In my report, I will go into detail and show how raising the federal minimum wage would positively effect the economy. In doing so, I will be discussing how an increase in the federal minimum wage would make a vast improvement on the way many low income families live, and also how raising the federal minimum wage would boost the economy as it desperately needs. In raising the federal minimum wage, one might argue that it would cause a spike in the unemployment rate. 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