The Effect Of Minimum Wage On The United States

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For years now the issue of how to handle the minimum wage in the United States has been a hotly debated topic upon many politicians. Currently, the federal minimum wage is $7.15 with the lowest minimum wage requirements being at $5.15 per hour in Georgie and Wyoming. With the cost of living rising every year and an unchanging minimum wage, many workers are struggling to make ends meet. In a hope to ease the economic burden of the minimum wage workers the Obama Administration is pushing for new bill called the Raise the Wage Act which will increase the minimum wage statewide to $12 by 2020 and raise the minimum wage for workers on new federal contracts to $10.10 or higher. I fully support the Obama Administration’s minimum wage proposal, I believe that raising the minimum wage to $12 will have both long and short term positive economic benefits, including a boost to the U.S. economy, a decrease in the unemployment rate, and reduce the unequal pay between the different races and genders.
One of the main arguments used against increasing the minimum wage is that it would force businesses to fire workers which in turn would lead to a raise in the unemployment rate. Although this may be the case for some businesses, raising minimum wage would actually lead to a boost in economic activity and create more jobs nationwide, a study conducted by procon.org showed that “a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period.” The reason a boost like this would take place has to do with the law of supply and demand, by increasing a person’s income they are more inclined to purchase more goods, which in turn, would incentivize suppliers to expand and offer more goods and would ultimately lead to the creation of more jobs in the long run. If this is what a minimum wage of $10.10 could possibly do an increase to a $12 minimum wage could have an even greater effect. Increasing the minimum wage would help bridge the pay gap between the different races and gender. Although almost all workers would benefit from a raise in the minimum wage, how greatly they are impacted on it varies depending on their race and gender. According to a study conducted by nytimes.com “Women make up 48 percent of the work force yet 55 percent of the would-be beneficiaries of the increase in the minimum wage. Hispanic workers account for 16 percent of the work force but 24 percent of those who would be affected by the wage increase. For African-Americans, the comparable shares are 11 percent of the work force and 15 percent of those who would gain from the increase.” With women making up more than half of the workers benefiting from the increase it will reduce the gap that we are currently seeing between the pay both men and women receive. The same goes Hispanic, African American, and other non-white workers, with them making up a good portion of the workers benefiting from the increase it will help reduce the unequal pay between the races. Although raising the minimum wage to

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