Many of our representatives in Washington have been discussing the advantages of adjusting the minimum wage. Many people are looking at the short term gains of having more money in their pockets. Raising the minimum wage, however, would affect the economy of the United States of America negatively, hurt the private sector, and would stunt the growth of the United States economy. Employers do not feel an obligation to hire a laborer if the minimum wage has been raised to a greater amount than the work itself is valued. Once the facts are established, it is very evident that a raise in the minimum wage would damage the recovery of the United States economy. The Great Recession, which lasted from December of 2007 to June 2009, left America struggling to regain full function of the economy. In the attempts of repairing the economy, raising the minimum wage would be catastrophic to the development of the private sector. The classic “mom and pop’s” stores are having enough difficulties staying in business; if we raise the cost of labor in the private sector they would surely crumble, destroying the private sector once and for all! Due to the companies trying to regain the profit margins lost from expensive labor, If the minimum wage were to be raised, the price of goods would see an increase in costs; thus, raising the standard cost of living. To raise the minimum wage would lead to a damaged economy beyond repair due to the heightened rate of the currency. Raising the minimum wage would inevitably stunt the growth of the economy.
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For instance, after World War II, Germany was forced to pay reparations due to the Treaty of Versailles 1919. In this, Germany decided to print more funds to exit the economic dilemma that had occurred. The value of German currency quickly depreciated, known as hyperinflation, causing the money to be worth nothing, leaving the economy in worse shape. America would be faced with the same problem if there were a surplus of money in the hands of the people, the effects would closely resemble that of the German’s. The value of the American dollar is falling rapidly; we owe our fellow counties over 17.9 trillion dollars, and this deficit isn’t growing smaller. The dollar has seen many periods of increase and decrease in value, but if the minimum wage is raised, then America’s economy will surely come to an inevitable crash. Ultimately, when wages are forcibly raised for entry level positions, companies will hire less help. This is ultimately a redistribution of wealth in a country that is supposed to be free. When a company is required to pay more to the entry level employee, businesses will stop developing staffed positions, and will be more inclined to replacing people with automated assembly lines. An assembly line would pay for itself soon after being installed, where as an employee is a constant burdening expense. As David Henderson has stated in the article, Raising the Minimum Wage Will Not Reduce Poverty. “A 1997 National Bureau of Economic Research study estimated that the federal minimum-wage hike of 1996 and 1997 actually increased the number of poor families by 4.5 percent.” Thus, raising the minimum wage would not only shock job growth, it would also cause for the decrease in job availability. To conclude the analysis that I have argued, when considering
For instance, after World War II, Germany was forced to pay reparations due to the Treaty of Versailles 1919. In this, Germany decided to print more funds to exit the economic dilemma that had occurred. The value of German currency quickly depreciated, known as hyperinflation, causing the money to be worth nothing, leaving the economy in worse shape. America would be faced with the same problem if there were a surplus of money in the hands of the people, the effects would closely resemble that of the German’s. The value of the American dollar is falling rapidly; we owe our fellow counties over 17.9 trillion dollars, and this deficit isn’t growing smaller. The dollar has seen many periods of increase and decrease in value, but if the minimum wage is raised, then America’s economy will surely come to an inevitable crash. Ultimately, when wages are forcibly raised for entry level positions, companies will hire less help. This is ultimately a redistribution of wealth in a country that is supposed to be free. When a company is required to pay more to the entry level employee, businesses will stop developing staffed positions, and will be more inclined to replacing people with automated assembly lines. An assembly line would pay for itself soon after being installed, where as an employee is a constant burdening expense. As David Henderson has stated in the article, Raising the Minimum Wage Will Not Reduce Poverty. “A 1997 National Bureau of Economic Research study estimated that the federal minimum-wage hike of 1996 and 1997 actually increased the number of poor families by 4.5 percent.” Thus, raising the minimum wage would not only shock job growth, it would also cause for the decrease in job availability. To conclude the analysis that I have argued, when considering