Raising Minimum Wage Increase Unemployment
Why would the government want to intentionally raise unemployment and hurt the economy? When raising minimum wage, that is what the government is doing. The first federal minimum wage was established during the Great Depression. It was meant to increase wages to create a better life for those struggling. People then tended to buy more which caused more job openings (“The Minimum Wage”). This helped a lot during the Great Depression because it made employers pay the people a fair wage. The current federal minimum wage is $7.25. Raising the minimum wage to $15 will over double the rate it is at now and would not create the same good consequences as during the 1930’s. The government should not raise minimum wage to $15 because many economic problems
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Teens don’t have as much experience as those already in the workforce thus, when a business is looking to hire but can only hire one due to tight budgets from the more expensive rate they have to pay, they are going to want only the best. When both a teen and an experienced worker are applying for a job, it is going to be much more challenging for the teen to get the job. Raising minimum wage would cause an increase in unemployment. This would just add to the difficulty of teens getting jobs. In 2013, by raising the minimum wage $1, there was a 1.48% increase in unemployment and a 4.67% increase in teenage unemployment. There was 0.18% decrease in net job growth and a 4.01% decrease in teenage net job growth (Gitis). As James Sherk said, “A 10% increase in minimum wage increases unemployment by about 2% (Sherk, Raising the Minimum”).” Changing the minimum wage to $15 would increase the minimum wage in all states by much more than just one dollar or 10%. That means there will be an even more substantial increase in unemployment. Congressional Budget Office estimates that about 500,000 people would lose their jobs if they raise the minimum wage. This is about one of five people …show more content…
First of all, restaurants would have to raise prices. Researchers from the Federal Reserve Bank of Chicago and the Department of Agriculture created a study examining the effects of minimum wage increases in restaurants. They found that the 10% wage increase in 1996-1997 caused a 0.7% increase in the overall restaurant prices (“Sherk, $15 Minimum Wage”). Restaurants would now offer higher prices for their food. This isn’t fair to all the people who don’t get a pay raise because they were already above the minimum wage. More specifically, the fast food industry would have to raise prices. By raising minimum wage to $15 an hour, there would be about a 25% increase in prices in just the fast-food industry (“Sherk, $15 Minimum Wage”). Researchers from the Federal Reserve Bank of Chicago and the Department of Agriculture created a study examining the effects of minimum wage increases in restaurants. During this, they found there were especially large impacts on the fast-food restaurants in the wage increase of 1996-1997. Most fast-food restaurants have more minimum wage employees. The price increase was roughly 1.5%, double the effect on the overall restaurant amount. Also, in even lower-wage regions the food increased by about 1.8%. Another group of researchers who are from the Bank of France did a study on the effects of raising minimum wage in
Teens don’t have as much experience as those already in the workforce thus, when a business is looking to hire but can only hire one due to tight budgets from the more expensive rate they have to pay, they are going to want only the best. When both a teen and an experienced worker are applying for a job, it is going to be much more challenging for the teen to get the job. Raising minimum wage would cause an increase in unemployment. This would just add to the difficulty of teens getting jobs. In 2013, by raising the minimum wage $1, there was a 1.48% increase in unemployment and a 4.67% increase in teenage unemployment. There was 0.18% decrease in net job growth and a 4.01% decrease in teenage net job growth (Gitis). As James Sherk said, “A 10% increase in minimum wage increases unemployment by about 2% (Sherk, Raising the Minimum”).” Changing the minimum wage to $15 would increase the minimum wage in all states by much more than just one dollar or 10%. That means there will be an even more substantial increase in unemployment. Congressional Budget Office estimates that about 500,000 people would lose their jobs if they raise the minimum wage. This is about one of five people …show more content…
First of all, restaurants would have to raise prices. Researchers from the Federal Reserve Bank of Chicago and the Department of Agriculture created a study examining the effects of minimum wage increases in restaurants. They found that the 10% wage increase in 1996-1997 caused a 0.7% increase in the overall restaurant prices (“Sherk, $15 Minimum Wage”). Restaurants would now offer higher prices for their food. This isn’t fair to all the people who don’t get a pay raise because they were already above the minimum wage. More specifically, the fast food industry would have to raise prices. By raising minimum wage to $15 an hour, there would be about a 25% increase in prices in just the fast-food industry (“Sherk, $15 Minimum Wage”). Researchers from the Federal Reserve Bank of Chicago and the Department of Agriculture created a study examining the effects of minimum wage increases in restaurants. During this, they found there were especially large impacts on the fast-food restaurants in the wage increase of 1996-1997. Most fast-food restaurants have more minimum wage employees. The price increase was roughly 1.5%, double the effect on the overall restaurant amount. Also, in even lower-wage regions the food increased by about 1.8%. Another group of researchers who are from the Bank of France did a study on the effects of raising minimum wage in