The Minimum Wage Debate in the United States
The minimum wage debate seems to be taking grounds in the United States with rising concerns about the need to increase the current minimum wage. This comes after the president showed interest in improving the hourly wage in a bid to cater for the poor citizens who entirely depend on the salary. According to the national economic statistics, a majority of people who rely on the wage are young and unskilled and solely depend on minimum pay to make a living out of it. Since the current minimum wage is low, needy families cannot cater for their needs sufficiently while the wealthier families who are thought to benefit more from the bill will exceedingly reap from the market. The issue addressed here aims to keep inflation in check by financially enabling working families. If there is a significant gap between the minimum wage and the economic rise, the citizens will suffer from high prices of essential commodities.
The Increase in Minimum Wage and Inflation Rate
According to the information from the Bureau of Labor Statistics, the minimum wage has increased in October 2016 when compared with March 2006. The increase in average is 6.773% calculated as shown below.
Increase in average wages = ((average wage October 2016 - average wage Jan. 2006)/average wage Jan. 2006) x 100.
The inflation rate for the same stipulated period increased by 17.966% calculated as shown below.
Increase in inflation = ((cpi October 2016 - cpi Jan. 2006) / cpi Jan. 2006) x 100
From the calculations above, it is evident that the minimum wage has not been able to keep up with the inflation rate. The inflation rate has been higher than the increase in minimum wage. With a higher inflation rate, the employer wins while the employee loses. This is because the employer will maximize the price of the commodities and thus, the business will have increased returns with a low cost of production because the wage paid to the employee is not proportional to the pace of the economy. On the other hand, a low rate of inflation and a higher increase rate for average wages will benefit the employee more than the employer. The employer will experience a high cost of production.
Views on Minimum Wage Increase
Mark Adams believes that the increase in minimum wage will hurt the poor. The author thinks that the hike in minimum wage will scare away job creators and it will thus be hard for young unskilled people to get employment. On his part, David Cooper on his report supports the minimum wage increase because he thinks it will help change the lives of the poor. Cooper states that the increase of minimum wage to $10 will help bridge the gap between the inflation rate and minimum wage increase.
Mark opposes the bill on the basis that upcoming investors who hire the majority of minimum wage earners will be forced out of the market. Such workers who usually lack experience might not get other jobs. In the end, they will continue being poor(Adams). The biases in this author’s argument are the assumption that all minimum wage workers are unskilled. Cooper supports his opinion by saying that increased minimum wage will keep up with inflation rates and thus, the inflation will have zero effects on the workers(Cooper). Cooper’s argument lacks biases.
Conclusion
I agree with Cooper’s idea that the minimum wage should be increased. If the minimum wage is raised, the inflation rate, though growing too, will not have lasting effects on the economy. In other words, a higher minimum wage will eradicate poverty. If workers earn a substantial amount of income, essential commodities become affordable, and life will be comfortable. Similarly, employers will not be at risk of losing because of the equilibrium that will be created between minimum wage increase and inflation rate.
Works cited
Adams, Mark. "Raising The Minimum Wage Hurts The Poor." U.S news. N.p., 2013. Web. 19 Apr. 2018.
Cooper, David. "Raising The Federal Minimum Wage To $10.10 Would Lift Wages For Millions And Provide A Modest Economic Boost." Economic Policy Institute. N.p., 2018. Web. 19 Apr. 2018.
