Minimum Wage Increase Essay
As a result of the inconsistency between the minimum wage and the actual cost of living, many parents must seek public assistance or hold multiple jobs just to cover the cost of their necessities, such as rent, food, utilities, clothing, transportation, and medical care (Nadeau). Since tax revenue pays for public assistance, it is us, the taxpayers who are subsidizing these wage earners' pay. However, companies utilize several strategies or policies to cope with the increase in business costs stemming from an increase in minimum wages. The increase in the minimum wage leads to an increase in business costs due to the high labor and production costs. Most companies usually raise the prices of their products or services and reduce the workforce to offset the increase in costs. "The minimum wage increase is not just the dollar an hour, but it's also a raise in our taxes," said Jason Lerner of Little Learner Academy” (Lobosco).
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People will buy less and some restaurants will lose some profits, so employer will likely raise their prices to balance their losses. A small percentage of the prices would be increased a bit, but not by much. “Whatever they do, the restaurants owners will have to, if you’ll pardon the term, eat some of the increased costs” (MacEwan). The increase in prices leads to an increase in inflation and adversely affects the spending power of many consumers that receive a minimum wage. The increase in prices aggravates the poverty issue rather than resolving it because many consumers are unable to afford the goods (Furchtgott-Roth). On the other hand, the reduction of the workforce leads to an increase in unemployment because low-skilled workers face challenges in securing employment. The scenario of increasing the minimum wage might also result in stagnant growth because different small businesses cannot afford to pay minimum
People will buy less and some restaurants will lose some profits, so employer will likely raise their prices to balance their losses. A small percentage of the prices would be increased a bit, but not by much. “Whatever they do, the restaurants owners will have to, if you’ll pardon the term, eat some of the increased costs” (MacEwan). The increase in prices leads to an increase in inflation and adversely affects the spending power of many consumers that receive a minimum wage. The increase in prices aggravates the poverty issue rather than resolving it because many consumers are unable to afford the goods (Furchtgott-Roth). On the other hand, the reduction of the workforce leads to an increase in unemployment because low-skilled workers face challenges in securing employment. The scenario of increasing the minimum wage might also result in stagnant growth because different small businesses cannot afford to pay minimum