Poverty Is A Concern For Millions Of Americans Essay

2135 Words 9 Pages
Even in a first world country like the United States poverty is still a concern for millions of Americans. In 2015 the U.S. Census Bureau found that forty three million Americans were living under the poverty level. The 2015 Gini index was 0.479, noting a high income inequality. Protests have sprung across the country to raise the minimum wage to a livable wage because while conventionally teenagers are thought of as working minimum wage jobs, ninety percent of the workers who would get a raise from a minimum wage increase to $12/hour are over age 20. Families with single parents working fulltime at minimum wage still live under the poverty level. The US federal government should increase the federal minimum wage. Even a moderate increase to $10.10 an hour would reduce the number of Americans living in poverty by 4.6 million. An increase in the federal minimum wage would not only benefit workers who would now be able to afford essentials such as food, clothing, and shelter but also firms who would have more incentivized and therefore more productive workers. In traditional economic theory because the cost of labor is wage, when the minimum wage increases firms substitute labor for other now relatively cheaper inputs such as capital. Therefore unemployment increases when minimum wage increases. However, empirical studies of minimum wage increase have found contradicting results. A popular empirical study of the employment effects after the rise in minimum wage in New…

Related Documents