Raising the federal minimum wage has
been a high priority for President Obama. In so doing, Obama believes the
increase will be good for both the economy as well as for families. The
article above attempts to answer the real question behind the issue, whether or
not the change will reduce income inequality. Proponents of the increase argue
that the change may bring lower-wage workers over the poverty line. They also claim
it will help restore the value of the minimum wage, which has not kept pace
with inflation. Most experts believe it will reduce inequality but will not
have a huge impact.
The article examines how much of an
impact the increase will have and who exactly it will affect. To illustrate the
impact, the author has the reader consider the 5-figure paycheck of a janitor
versus the 8-figure salary of a CEO. Elevating the minimum wage from $7.25 to
$10.10 would simply fail to narrow this gap. Additionally, there is a huge gap
between those making 6-figures and billionaires. So, too, a change in the minimum
wage would do nothing to narrow this chasm. Moreover, there is a gap between
low-wage and middle-wage workers. This is the target where many say progress
would be made.
Ultimately, increasing the minimum wage
will not alter some of the root causes of income equality. I believe that
focusing on globalization, technology and the U.S education system are better
options than raising the minimum wage.
In my opinion raising the minimum wage will help create more job opportunities via decreasing the rate of unemployment and would encourage workers thus making the number of discouraged workers decrease.
ReplyDeleteI agree, once the minimum wage increases, standard of living will also increase because now a paycheck will be able to cover most costs. Also people will be motivated to work meaning output will also increase, all things being equal. In my opinion its better to invest locally in something that would reap more benefits before involving in internation activities.
ReplyDeleteIncreasing the minimum wage can help the economy in several ways. For one, minimum wage workers will have a marginally higher standard of living. Depending on their marginal propensity to consume, there will be more economic activity. This can help create jobs over time in economy. I agree that the income inequality will not be greatly affected. Comparing billionaires and those who make the minimum wage is unfair as there will never be a minimum wage high enough to do so.
ReplyDeleteAlthough raising minimum wage will not really change the wage gap and decrease inequality, it is a step towards it, and as long as it benefits lower wage workers and could possibly put them above the poverty line, then I say they should increase wages. However, I wonder if increasing wages would lower the number of workers that are employed and leaves more unemployed, which is usually the worry over increasing wages.
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