Minimum Wage Speech

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Good morning fellow classmates, I appreciate the privilege to present a speech on my policy which is about why the federal government should not increase the federal minimum wage past the existing one. Those of you that are employed and get paid the minimum wage are aware that as of January 1st, 2017, the minimum wage escalated to $10.50 an hour. Of course, the thought of earning additional money by the hour sounds astonishing, but what if this causes negative effects on other people or groups. Even though people may argue that raising the minimum wage can be beneficial in different ways, I’m here to tell you the truth about the real outcomes of raising it. First of all, one of the many groups that will be greatly affected by the raising of the minimum wage would be companies or businesses as well as their employees, particularly diminutive ones. Companies and businesses have a difficult time adjusting to the amount of money they will need to pay their employees because they might not have the money for it. The companies can direct in a different direction because “Companies that are forced to pay their low-skilled employees a premium are faced with few options: drive up prices, reduce employee hours or cut some of the services they provide” (Eastlick 2009). Companies or businesses are pushed against a wall and forced to formulate a decision that will upset a party one way or the other. The businesses are still trying to produce a profit while having the work force to get the job done. If the companies decided to cut their employees hours or positions, then the employees with a lower education have a higher risk of becoming unemployed. There has been research on how “For every 10 percent increase in the minimum wage, the research estimates, jobs for high school dropouts, young black adults, and teenagers can disappear at a rate of 8.5 percent. (Eastlick 2009). In addition to the companies having less money for the work force, the employees will be struggling to keep their heads above water because they are not making enough money to compensate the number of hours and money they got before. The United States Department of Labor stated that “Academic research has shown that higher wages sharply reduce employee turnover, which can reduce employment and training costs” (USDL 2015). This shows that the companies can find a solution to not getting affected as severely by the increase of minimum wage and the employees will have to suffer the consequences of whatever the companies or business decide to do. By boosting the minimum wage, employees, businesses, companies and anyone associated with them could suffer a negative outcome. Additionally, increasing minimum wage can cause inflation to occur. Since 1938, when minimum wage was established it has been escalating all the way up to the present time, 2017. An example can be seen from the United States of Labor “January 1, 1979 $2.90 – July 24, 2009 $7.25” (Grossman 2016). Just between the time of thirty years, the minimum wage increased over three times the amount from 1979 – 2009 as well as the value of goods. What has been reoccurring over time …show more content…
Businesses can or have suffered slow customer activities in result of the minimum wage increased and inflation took effect. Sure, some people may have a little extra money that they did not have before, but since the prices of goods increased they may as well uphold the extra money with them instead of spending it, which is the opposite of what raising the minimum wage was meant to do. Customers will take more precaution on what they spend their money on or even spend less. The author Oner wrote “In an inflationary environment, unevenly rising prices inevitably reduce the purchasing power of some consumers, and this erosion of real income is the single biggest cost of inflation” (Oner 2012). The consumer’s comfort to purchase products declines which goes hand in hand with it causes slow business. Less customers means less business which means the company or business is earning less profit that was caused by the growing minimum wage, therefore the minimum wage should not exceed the current established

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