Essay Example on In 1938 the federal minimum wage was Introduced

In 1938 the federal minimum wage was introduced It started at 25 cents an hour and has been changed by congress a total of 22 times It is now 7 25 What s saying it can t be changed again Inflation has not been accounted for with the minimum wage so its purchasing power has decreased so much over the years Raising the minimum wage would reduce poverty and income inequality would allow people to afford housing and other everyday essentials all while increasing economic activity and spurring job growth Raising minimum wage could cause many great things to happen but It could also be very bad An increase in poverty hurt businesses and force them to close and increase housing costs The minimum wage is a very controversial topic and could benefit or hurt people The question is being able to live comfortably worth the negative effects that raising the minimum wage could cause Increasing minimum wage could reduce poverty and reduce income inequality In a Congressional Budget report of 2014 it was found that 300 000 people would no longer be in poverty if the federal minimum wage was raised to nine dollars an hour If it increased to 10 10 and hour even more people 900 000 would no longer be in poverty 

There would be an increase in economic activity as well as job growth if the federal minimum wage was increased Economists from the Chicago Federal reserve bank predicted a 48 billion dollar increase in spending GDP and job growth just from a 1 75 rise in minimum wage It was stated by the Economic Policy Institute that 22 1 billion dollars would be put into the economy as a result of raising the minimum wage from 7 25 to 10 10 It would also create approximately 85 000 new jobs Although raising minimum wage could help people live more comfortably and help the economy it could also pose many negative effects such as an increase in poverty The Federal Reserve Bank of Cleveland did a study that showed when wages increased hours and employment declined And economics professor at Pepperdine University by the name of George Reisman said The higher wages are the higher costs of production are The higher costs of production are the higher prices are The higher prices are the smaller the quantities of goods and services demanded and the number of workers employed in producing them So basically increasing minimum wage would only be beneficial if workers hours and employment stayed the same A raise in pay may be good for the worker but it definitely wouldn't be good for the businesses It could even force them to close According to a 2013 Gallup poll 60 of small business would be hurt by a rise in minimum wage It was even found by Forbes that multiple Wal Marts closed because of increases in minimum wage Big chains and small businesses would be hurt by a rise in minimum wage Raising minimum wage could even cause housing to cost more In big cities like 

Los Angeles raising minimum wage could cause an increase in rental prices because of the limited housing supply in big cities All it would cause is more competition in the housing market And a higher demand for houses would cause prices to rise It was even estimated by one Los Angeles blogger that if minimum wage was increased to 15 dollars an hour then rental prices could increase as much as 173 dollars a month So a rise in minimum wage might not be so great for low income workers living in big cities Overall raising minimum wage could go either way it could be good ore it could be bad It could help some people or hurt them depending on what they do or where they live A rise in minimum wage could reduce poverty and income inequality make housing and daily essentials more affordable and help the economy On the contrary it could also increase poverty hurt businesses and force them to close and increase housing costs