Minimum Wage and the Distribution of Income

Table of Contents

Introduction
The Supporters Arguments
The Opposing Arguments
Analysis
Conclusion
Works Cited

Introduction

Since the United States has always been viewed as a country of enormous economic opportunities, the minimum wage issue has been debated for a long time. The opponents of raising salaries claim that this policy may increase unemployment in the country (Lester et al.). The supporters of this idea state that higher minimum wages can help resolve the employment problem in the United States (Lester et al.). Even though the base pay varies across the states, the federal living wage is still set at the level of $7.25 per hour (Desilver). Those who are against raising the minimum salary argue that this measure is pointless in fighting poverty, which is 15% now, an inconceivably high rate for the U.S. (Sabia and Nielsen 3). In fact, they claim that many poor people do not work anyway; hence, they cannot benefit from higher wages (Sabia and Nielsen 3). Still, there is a significant number of employed individuals having material hardship. Therefore, raising the base income will not only help improve the living conditions of the poor working class but can also reduce the unemployment rate.

The Supporters Arguments

People and unions that promote the idea of raising the minimum wage state that it will diminish poverty and unemployment rates. For example, the two posts on the CAP Action website present their arguments for this assertion. The author of the first article is an expert in religious studies; thus, he may be biased toward defending family ideals. The authors of the second article are researchers in American Worker Project (AWP); hence, they are qualified in the field of employment and wages statistics. However, they may also be biased toward supporting the argument that confirms the goals of AWP. Still, both articles provide reasonable evidence to support the idea of raising the base pay in the U.S.

First is the article by Jenkins who claims that America has a moral obligation to its citizens to raise income opportunities to help people preserve family values. The author presents the story of Aarin Foster, a single father of two and a fast-food chain full-time worker in the Chicago area (Jenkins). Fosters wage is $8.25 per hour, which totals $13,000 per year, barely sufficient for him to support his children and himself (Jenkins). Aarin has been working hard and long hours in this restaurant at the expense of spending time with his daughters, but he, and millions of similar workers, could not climb above the social ladder. According to Jenkins, the main reason is low base pay by their employers. Furthermore, the author asserts that increased wages help companies increase productivity and boost the demand for new employees (Jenkins). Lastly, the post claims that the states with higher minimum salaries have lower unemployment rates, and it gives credible statistical data to support the authors viewpoint.

The second article states that raising the federal minimum wage will only help the American economy. Lester et al. argue that regardless of limiting the base income to a certain number to ensure that enough money remains to distribute to all workers, the unemployment rate remains above 7%. Therefore, the authors assert that there is no significant association between wages and employment rate (Lester et al.). The article presents the statistics from 91 cases of raising minimum pay during a time of high unemployment rate (Lester et al.). This study showed that employment increased in 52% of these cases (Lester et al.). The authors conclude that research indicates that raising the minimum wage boosts demand, increases worker effort, and reduces turnover, counteracting the higher wage costs (Lester et al.). Overall, this post presented sound evidence from scientific studies that demonstrated the effectiveness of this measure.

The Opposing Arguments

Raising the minimum wage in the United States seems debatable because many economists and politicians believe it can worsen unemployment. Indeed, the two articles from the Employment Policies Institute (EPI) argue that raising the base pay is harmful to the American economy. The author of the first article is the research fellow at the EPI who provides statistical data to support his claims, and the second report was prepared by the economics researchers. Since both articles were written for EPI, which is aimed to reduce minimum wage, they were likely biased only to presenting the data that showed that increasing minimum salaries was not beneficial for the country.

The first report was written by Michael Saltsman, who explores the impact of a higher minimum wage. The author states that although raising base pay targets the poor working class, they do not benefit from it; this policy only improves the lives of those who already have adequate family income (Saltsman 3). Another argument against this measure is that it may negatively affect teen employment. Companies hiring youth will have to cut their working hours or number of employees to maintain higher wages (Saltsman 4). The article claims that 85% of all credible studies in this area show that raising the minimum wage results in job loss for less experienced workers (Saltsman 7). However, the actual studies are not presented in the report; therefore, these statements cannot be viewed as reliable information.

The second article, opposing the minimum wage rise, provides data from surveys and programs that explored the effectiveness of increasing base pay. Although raising wages helped some families move out of poverty, the authors assert that it caused less-skilled workers to lose their jobs (Sabia and Nielsen 6). Their survey showed that increasing the federal minimum wage is ineffective in helping the poor working-class improve their living conditions (Sabia and Nielsen 17). In fact, the authors suggest that elevating Earned Income Tax Credit is more efficient at fighting material hardship (Sabia and Nielsen 17). Their evidence seems valid, but even if the report mentions the improvement that higher wages cause for impoverished families, they ignore this fact when making the final argument.

Analysis

Having reviewed the claims of both sides, I concluded that raising the federal minimum wage is beneficial for workers and the economy. I agree with the authors of the two articles that support this measure because they not only presented their opinion about the moral obligations but also provided credible statistical data. Although the opponents of this viewpoint also gave solid explanations for their arguments, I could not agree with their claims since the presented information appeared to be biased.

Conclusion

The topic of raising the base pay has both supporters and opponents. The latter strives to demonstrate that higher wages lead to job loss among less-skilled workers, worsening poverty. On the other hand, the former assert, using evidence-based studies, that rise in the minimum wage is not a causative factor for unemployment. In fact, the states where the base salaries are higher have fewer jobless individuals. Therefore, I agree with the supporters of raising the federal minimum wage because the benefit for low-income families and the countrys economy is undeniable.