Increase in Minimum Wage
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Sana SiddiquiSeema Kurup English 10104-18-17Increase In Minimum Wage Young teenagers dream about their first job. They do not care about the work part but they care about how much they will get paid. People do not just work for fun; they work to pay their bills or their college tuition. Everyone hopes they will get paid good meaning at least eleven dollars per hour, but that is not always the case. Here in Chicago the average minimum wage is ten dollars per hour, but that is only if someone works in the city (“City of Chicago”). If someone works in the suburbs they will get paid eight dollars and twenty-five cents per hour. Companies do not give decent hours too. It is either working way too much or not working at all; there is no balance. Working too much is not bad, but if someone works for thirty hours and their paycheck is only 200 dollars after taxes, that is not satisfying to see in he or shes bank account. If the president raises the minimum wage and then he or she works for thirty hours, taxes might not feel bad. Raising the minimum wage has its positive effects too. Minimum wage should be raised, because it helps families get out of poverty, it helps the economy, and it helps decrease unemployment. Back in the day there was no minimum wage. Workers had to bargain or beg for money. Dennis Collins wrote an article for the Encyclopedia of Business Ethics and Society called Minimum Wage and he stated, “Given the overabundance of low-skilled laborers, they possessed a superior bargaining position. Some employers paid below subsistence wages, and income level insufficient for an employee to purchase food and shelter” (Collins). Employers paid their workers the bare minimum. It was not even enough to buy food. Today in 2016, workers are making more money than in the 1900s but that is only if they find a good job. In the 1900s they needed money for food and shelter; now people need money for gas, electricity, student loans, phone bills, food, and shelter. That is not even all of it. Society’s cost of living has risen a lot. Minimum wage was an important talking point when it was first passed. In the book called Everyday Finance the second edition it stated, “The first national minimum wage laws were passed in 1896 in New Zealand. That same year a minimum wage law was established in Victoria, Australia” (284). Australia had a minimum wage set for companies that paid the least. Not every company had a certain wage that each worker would get. It took four years for Australia to mandate minimum wage for everyone. The United States of America started minimum wage in 1910, but it was not for women and children (284). This was a huge debate and finally ten years later thirteen states legalized minimum wage (285). The wage started at 25 cents per hour. This law was overruled in 1933 but in 1938, “… the Fair Labor Standards Act reset the national minimum wage at $.25 an hour” (285). Raising the minimum wage would help the economy, but if employers are giving only 25 cents per hour or 8 dollars per hour, this will not help anyone. Welfare and public assistance wasn’t introduced until later on. Families had to survive on their minimum wage until the government came in. The Encyclopedia of Business Ethics and Society states, “ the minimum wage was increased to $5.15 an hour in 1997 and has remained at that level. In 2005, congressional legislation proposing to gradually increase the minimum wage to $7 an hour failed to gain the necessary political support for passage” (Collins). Just because welfare was introduced in the United States does not mean everyone can get it. Families have to be under the poverty threshold in order for them to be eligible for welfare. “In 2005, the federal poverty threshold for a single parent with two children was $16,090” (Collins). People who are not under the threshold are trying to save enough money to buy a car or a house. Even five dollars per hour is not enough for middle class families to pay their bills. Human beings do not have only one bill; they have to pay for gas, electric, phone, college, food, car etc. Raising the minimum wage will help students who have bad credit get out of debt. They will be able to do more things than just something they can afford. More money means more spending and that will help the economy both ways.
When workers have extra money lying around they spend more. The economy will start to rise when people like us start buying a lot. Opening credit cards helps the economy. If citizens have money to pay for their credit cards than credit scores will increase and more and more companies will start to offer loans. The Economic Policy Institute states that when companies raise their minimum wage to twelve dollars, then this will help the economy. “Because low-wage workers tend to spend increased earnings locally on basic needs, this will benefit Main Street businesses that rely on consumer spending” (EPI). All there money will go back to the companies anyways, but in return families need basic supplies to live. When workers start to work more they will be able to pay for their own health insurance. Less and less people will be on Medicare or Obama care. Families will start to take care of their own needs when their income increases. Not only does raising the minimum wage get families out of poverty it also helps the economy. People will get out of debt and improve their credit scores when they have more money to spend. There will be less foreclosures and short sales on houses. The United States government has to permanently increase the minimum wage to get so many problems solved. The United States Department of Labor states,” Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has steadily increased, even when the minimum wage has been raised” (U.S. Department of Labor). GDP or gross domestic product is a value of the services and goods in the United States of America. When gross domestic product is low that means our economy is doing bad. No one is buying anything and there are a lot of people that are in debt. When the gross domestic product is high that means that the economy is rising. People are spending more and applying for loans. Workers are improving their credit scores. Paying off credit cards is a big accomplishment for people and banks appreciate it too. They offer that person more credit if he or she has no balance on their account. Increasing the minimum wage helps with credit which then helps people get out of poverty. Another reason why raising the minimum wage is good, because less and less people will start to ask money from the government for health insurance. People who really need it will get it. For example, Obama care and Medicare are misused by a lot of families. Families who don’t need extra money have Medicare. People who actually deserve it are those who cannot pay for their daily checkups or who are really sick. Raising the minimum wage will help people understand that they do not need the governments help. They can buy better insurance that covers more. This will automatically help the economy. Economy goes up and so does employment.