The Benefits of Raising the Federal Minimum Wage - 1334 Words

Picture this: You are a single parent of two, you work 40 hours a week plus occasional overtime at a minimum wage paying job, you struggle to put food on the table to feed your family, and then you receive a call from the bank saying that your home is being foreclosed. This is the situation faced by thousands of Americans every year due to low income and wealth inequality. The federal minimum wage (FMW) as of April 2014 is $7.25, which is not enough to keep a family of two above the poverty line. There are certain questions on this topic that should be addressed, such as why is poverty and wealth distribution an issue in the United States today? Should the FMW be raised and why? How would raising the FMW affect American families? What are†¦show more content†¦Patterns show that this gap is only widening as time goes on, specifically between 2007 and 2010. The disparity between the upper and lower class is immense and is critical to understanding the need for a FMW raise. Fam ily income is the most direct way to evaluate poverty today. As previously stated, approximately 46.5 million Americans were living in poverty as of 2012. Currently, there are two proposed increases to the FMW from $7.25 standing at $9.00 and $10.10. According to the Congressional Budget Office’s (CBO) projections for 2016, there would be a net income increase of $5 billion for families under the poverty threshold by today’s FMW standards. They also project the increase would lessen the income of families making more than 6 times the poverty threshold, or approximately $116,000, by $17 billion. This creates a $12 billion dollar imbalance making headway in diminishing the gap, and while in the grand scheme of American inequality this is not much, it is needed progress. Economist David Neumark addresses the potential for this exchange in his article â€Å"Do Minimum Wages Fight Poverty?†. He writes about the trade off that might happen alongside a FMW raising, st ating â€Å"over a one- to two-year period, minimum wages increase both the probability that poor families escape poverty and the probability that previously nonpoor families become poor.† Purely in terms of the FMW, this exchange in revenue could lessen theShow MoreRelatedRaising The Federal Minimum Wage889 Words   |  4 Pages In my report, I will go into detail and show how raising the federal minimum wage would positively effect the economy. In doing so, I will be discussing how an increase in the federal minimum wage would make a vast improvement on the way many low income families live, and also how raising the federal minimum wage would boost the economy as it desperately needs. In raising the federal minimum wage, one might argue that it would cause a spike in the unemployment rate. The reasoning is that it wouldRead MoreRaising The Federal Minimum Wage1277 Words   |  6 PagesThe idea of raising the federal minimum wage that has developed nation wide attention, including protesting and arguments, has caused many discussions on why it could potentially help the economy grow and how it could result in the crash of the economy. Many people feel like raising the federal minimum wage is a must, while others think it will destroy the economy. There are many benefits that come with raising the federal minimum wage, but those benefits also come with many disadvantages. TheRead MoreA Full Time Worker Earn $ 5.15 An Hour1378 Words   |  6 PagesA full time worker earning $7.25 an hour will make approximately $15,080 a year (â€Å"Minimum Wage†). That’s barely more than what students pay for housing and food at some colleges, and we expect a family to live off of this? The poverty line is at $20,000 for a family of four, so how are these people supposed to raise their children in a healthy environment while working full-time to not even be on the poverty line? If this raise is done correctly, employment and prices won’t be hurt, and we will onlyRead MoreU.s. Federal Minimum Wage Essay1162 Words   |  5 PagesThe current U.S. Federal Minimum Wage is $7.25 per hour. In just two years from 2013, the demanded from advocates for raising minimum wage rose from $9 to $15. However, raising the minimum wage is more complex than simply raising the number of federal standard of pay for employees. Relative control groups and other market activities play a part in the outcome of the minimum wage. For example, one instance of market activity was observers said that raising the minimum wage did not hurt individuals;Read MoreMinimum Wage Should Be Raised910 Words   |  4 Pagesmaximize the American Dream on the minimum wage† (Benjamin Todd Jealous). In 1938, minimum wage was created by the federal government in order to protect workers by ensuring a minimum of twenty-five cents per hour worked. Though President Roosevelt had the right idea in protecting the workforce, something needs to be done to ensure that Americans are getting a reasonable amount of money for the amount of hours they have worked. As Benjamin Todd Jealous stated, minimum wage is not enough for the averageRead MoreFederal Minimum Wage Should Be Increased1180 Words   |  5 Pagesstarted to come to conclusions that the federal minimum wage is excessively low. The government can stand to help people gain more money, resulting in a less poverty -stricken country. The cost of living or gaining has increased significantly over the past twenty years, and the minimum wage, for most isn t enough for them to support themselves. There have been efforts to increase the federal minimum wage, but none has succeeded in getting approved. Minimum wages are too low for a human, to provideRead MoreMiimum Wage and Power to the People1746 Words   |  7 PagesThree – Power to the people The third and final alternative minimum wage is to allow the local people in the community vote on a living wage. This alternative would put all the power in the hands of the people; allowing them to decide what is best for their neighborhoods. If the people are allowed to vote in such matters, they will be permitted to use their voice and at the very least express their concerns with the gaps in minimum wage and cost of living in their community. However, there are drawbacksRead MoreThe Benefits Of Raising The Minimum Wage706 Words   |  3 Pages Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in generalRead MoreMinimum Wage Should Not Be Increased1669 Words   |  7 PagesFederal minimum wage is a huge controversy around the world and especially in the United States today. It is the lowest wage that employers can legally pay their employees. The world’s first minimum wage law was passed in the year eighteen ninety-four in New Zealand. New Zealand’s minimum wage experiment caught the attention of other countries. It made them start considering the law for their own countries. The United States passed their federal minimum wage law in nineteen thirty-eight. The federalRead MoreThe Federal Minimum Wage Law962 Words   |  4 PagesThe federal minimum wage law was signed in 1938 by President Franklin Roosevelt in order to keep people out of poverty and increase consumer purchasing power. This has done the opposite by hurting businesses and reducing employment, while minimum wages go up, so will the costs of living. Most of the people working for minimum wage are 16 between 24 years old, 37% of workers are going to school working part time. Enrollment tuition has increased over the years, and raising the minimum wage could