Minimum Wage Increase: Helping or Hurting American Jobs?

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On the first day of this year, while many college students were nursing their hangovers, little did they know that the minimum wage increase came into effect, and would have such a grand influence on their futures. In Florida, the minimum wage went up to $7.93/hour this past January, and the Obama administration is already talking about raising the federal minimum wage up to $10/hour. Good news right? WRONG. In John Stossel’s latest special on the topic, he asserts that although politicians have good intentions in raising the minimum wage, it would take a toll on unskilled workers, further delay teenagers from entering the job market, and slow down job growth.

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Politicians in favor of the bill like Keith Ellison, featured in the video, believe, “employers will pay the least they can, even if they could pay more, because they can get away with it,” and considering employers are always trying to reduce costs, this seems like a logical argument for raising the minimum wage; to make sure the poor are not take advantage of ! However, competition in the job market is notably prevalent, specifically in the private sector, and that is what keeps wages fair in America. The newscast reports, “the average hourly wage in America is $16.57,” more than double the minimum wage, which suggests that people get paid based on how much their skills can produce, not based on the minimum wage regulations alone.

Minimum wage regulations hurt unskilled workers and inexperienced teenagers who are trying to make their way into the job market. Forbes magazine notes, “A recent study by Jonathan Meer and Jeremy West, economists at Texas A&M University, found that ‘the most prominent employment effect of minimum wage laws is a decline in the hiring of new employees,'” (Forbes). In other words, because employers now have to pay their current employees more, they do not have extra money to expand their businesses and hire new employees at such high wages.

The article also reports that the minimum wage, “violates the principle of freedom by limiting the range of choices open to workers, preventing them from accepting jobs at less than the legal minimum…it also prohibits employers from hiring those workers, even if both parties would be better off,” (Forbes). A high minimum wage makes it illegal for teenagers to work low paying jobs for work experience. Conversely, for $10 an hour, employers cannot afford to hire unexperienced workers, so by default, teenagers would suffer the most from such an increase. In order to gain work experience legally, teens wishing to enter the job market would have to provide free labor, instead of getting a lower wage, that would be fair and beneficial for both parties.

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Despite all of the research against the wage increase, Stossel reports that “two-thirds of Americans support a 10$ minimum wage,” (Youtube). On that same note, Forbes argues that, “The belief that increasing the minimum wage is socially beneficial is a delusion,” and while I agree it is a delusion, it is hard to argue that 2 million people are “delusional” (Forbes). However, I will argue that most of America is probably not familiar with fundamental macroeconomic concepts, and to someone who cannot see the secondary effects of such a policy, raising the minimum wage seems like a great way to counter poverty and unfair wages in the United States.

My suggestion? Get informed America ! Read between the lines, and learn to see through political schemes, and attempts to pull at your heart strings.

And always remember the wise words of accomplished Economist James Gwartney, ” GOOD INTENTIONS DO NOT GUARANTEE DESIRABLE OUTCOMES.”



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Forbes article & SD graph-


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