Minimum Wage

In our country today a large number of people are working for minimum wage. The idea behind minimum wage is to keep pay rates reasonable, and at a reasonable amount compared to the states cost of living. In my personal experience I’ve seen minimum wage raise from $5.15 an hour in 2005 to over seven dollars an hour now. This rate would seems great, but when you compare it to the new cost of living you can see a large imbalance. Now the question is, do we raise minimum wage to a more realistic rate, or let it grow at its current rate?

When it comes to benefits of raising the minimum wage, the Economic Policy Institute in Washington D.C. has come up with a unique prediction. The big wigs at EPI predict that, despite some basic economic concepts, the amount of employees needed buy businesses will drastically increase because of the amount of money being added to the economy’s minimum wage recipients will cause a higher demand in goods and services. Also, this increase in demand for goods and services will create an estimated 100,000 new jobs at the same pay rate allowing our lower class economy to flourish and reduce the gap between economic classes. In addition to the creation of new jobs, it’s estimated that crime rates would drastically decrease because the new pay rate for average jobs would make crime less appealing.

On the flip side, there are also plenty of drawbacks to raising minimum wage. Economic expert Michael Strain argues that, through his own research on the subject, would be a decision that would only set the United States back. Strain claims that with the increased price of employees their demand would be greatly reducing in a large number of layoffs. Companies would most likely only keep their employees with a higher skill level employed. This would make it much harder for lower skill level workers to find work as well as make the unemployment rate harder to budge. Another aspect of having companies only employing more skilled workers is the...