Minimum Wage Redistribution

1852 Words 8 Pages
Since the great economic upheaval of the 1930s, the United States federal government has taken the responsibility of alleviating the conditions of the impoverished and destitute via the method of redistributing income. Income redistribution is a medium through which the government tries its best to mitigate the adversities of the financially weak, through the transfer of income from the wealthy to the poor. The advocates of this approach state that it promotes the development of an egalitarian economic society, and attempts to solve the numerous problems associated with poverty. However, the opponents of this policy proclaim that it is a form of larceny, in that it takes away the money from the diligent and hard working wealthy, and gives it …show more content…
For example, minimum wage is a price that would be determined by the free market, if the government did not intervene and modify the markets’ decisions. The minimum wage has always been a controversial topic in the United States because many people believe that they are remarkably low, while others think that government should not dictate minimum wages in a “free market” economy. The advocates of this method are in favor of it because not only does government interference alleviate income inequality, but also prevents inflation from increasing very rapidly. In addition, crucial issues such as worker exploitation and underemployment can also be prevented with minimum wages. Consequently, consumer economies benefit tremendously from minimum wages because their business activity skyrockets, since as more people are working and making more money, they are also spending more money. Despite the numerous pros to this strategy of the government, there are also some cons. Since the late twentieth century, low wages have been a fundamental part of business efficiency; hence, businesses that provide developing nations with their products, heavily oppose the minimum wage due to cost efficiency. Small businesses are another opponent of minimum wages because they cannot often afford to pay their employees the minimum wage; thus, the minimum wages often result in stagnant growth of small businesses. Finally, adversaries of minimum wages argue that this method is not a cure for poverty because in capitalistic societies, businesses tend to react to minimum wage increases by increasing the prices of their goods and services. Therefore, even though minimum wages might not be an advantage to small businesses, the nation as a whole

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