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Necessary for The Boost of The Economy
If you have ever worked for minimum wages, I am sure you have felt as if your time was worthless after tax you brought home next to nothing, no matter how often you worked. Most people do not dream of working the rest of their lives on a minimum wage, but this is the harsh reality for Americans. The minimum wage was set for workers, so they will not get underpaid. This paper discusses the advantages of a higher minimum wage, why it is necessary to boost the economy, solve the class difference for women and minorities, and a housing problem.
According to the trusted article, the economic institute found out that for every dollar that minimum wages rise, spending on government assistance drops by $5billion(CBO 2). By raising minimum wages, it would stimulate the economy in many ways. It would increase the purchasing power of money workers whose wages would also go up. It also helps to decrease government spending for food assistance programs, health care, and affordable housing. The more people spend, the better the economy. The increase in the minimum wage will greatly reduce the national poverty level and lift approximately 900,000 people out of poverty. If 900,000 people are lifted out of poverty, this will reduce the total number of poor families by about 2% (CBO). People will be able to support themselves and their families with extra spending money. This leads to an increase in sales tax for entertainment, groceries, and restaurants spending.
Since the wage hike in 2009, the minimum wage has not been able to keep up with inflation and average wages, and most shockingly, it has not been able to keep up with the top 1% of earnings and the CEO’s salary. Growing differences in the earnings of workers in the United States have contributed to the inequality crisis. As a result, low-wage workers have not benefited from economic growth and productivity.
According to data from the Center for Economic Policy Research, if the minimum wage tracks productivity gains, the minimum wage will be around $ 15 an hour. The main argument for increasing the minimum wage is that minimum wage workers will be provided with a better level of income to cope with the increase in their living costs, thereby improving their overall standard of living (Cooper).
At the same time, intangible benefits can be turned into tangible benefits for businesses and employees could arise from the rise of the minimum wage rate. This is due to improved employee morale due to higher wages. Employers often find the challenge of providing sufficient incentives to motivate workers to do their best to perform their jobs. This especially applies to the low-wage employees as they perceive their efforts useless against shielding them from poverty.
Improved employee morale can easily translate into more specific benefits, such as better employee retention and lower hiring and training costs. Employees who tend to stay with the company longer can benefit from greater progress and overall reductions in work-related transfer costs.
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Solves the Class Differences for Women and Minorities
It is a human right issue to get paid equally for equal skilled workers regardless of age, gender, or beliefs. According to U.S. Department of labor statistics, nearly two-thirds of minimum wage workers are identified as females (CBO). Women make less than their male counterparts, $10.07 for women at the median verse $10.68 for men” (economic policy institute). This is simply a comparison of the median wage of men and women who works full time. This is caused by several factors such as lower female education, cultural norms about gender roles, and the stereotype thinking of the society to think women are the primary caregiver of the family. Women earn 61 cents for every dollar men make. Men make $1172 a year more than their counterparts women’s simply because of their gender. This also climbs too big for women in minority groups too, who are facing the effects of being women and a person of color socioeconomically. While increasing the minimum wages cannot close the racial pay or wealth gaps, it directly increases the income of millions of minorities. By bringing these women and ethnic minorities closer to economic security and helping to narrow the gap between rich and poor over time.
Most of the minimum wage workers fought for $15 an hour by January 2021; however, they could not have predicted the threat as covid-19. Restaurants, warehouses, and grocery stores were ordered by the governor to lock down or to serve only take out. This means that their total income has dropped sharply. Therefore, the minimum wage will not be increased in January 2021. According to Denver 7 news, it is the most challenging crisis in the century that the restaurant industry faces in 2020 (Riggs). “twenty-four percent of the restaurant are under threat of imminent closure thanks to the indoor dining shutdown, and 60% may not make it for three months” (Riggs).employees in the circumstance like this will have very much benefited for the idea of raising minimum wages so that employee do not worry paying their rent or paying their bills, however, increasing the minimum wage during this time is inappropriate and very difficult for small business owners in order to pay. From what I see from the news, most of the small businesses are closed, and they lose all income they cannot afford to pay the mortgage, benefits, social security for their employees. The government shall to assess the situation for the hospitality industry before they pass the bill to increase the minimum wages.
People who have been marginalized in history and generally do more than their share in low-paying jobs could benefit excessively from a rise in minimum wage rates. Many American families depend on the incomes of women, especially the incomes of single mothers’ homes. The minimum wage has a greater impact on women’s pay inequalities, as women’s wages are generally lower than those of men and therefore closer to the lowest point of the pay scale. Between 1979 and 2012, the decrease in the minimum wage accounted for 48% of the increase in the female wage gap between the distribution of minimum and intermediate wages (David et al., 60).
In industries where tipping is common, such as restaurants, women experience particularly unusual hardships (such as the hit of Covid19). There are a lot of mothers who work in these industries. The majority of tip workers are women and generally have low incomes. Well-being in the workplace is also very low, the proportion of living is poor, and the instances of sexual harassment are very high. The general conclusions about the difference between the normal minimum wage and the lower minimum wage indicate the current problem.
A fair minimum wage law will be an important step in closing this gap and saving people from poverty. Raising the minimum wage to U.S. $ 10.10 will free 6 million workers from poverty, 60% of whom will be of color (David et al., 68). Blacks, Asians, and Hispanics will benefit as, in fact, that their share as minimum wage earners is greater than their share in the total labor force. In 2013, they represented only 32% of the workforce but still represented 42% of minimum wage workers (David et al., 72).
Raising the minimum wage benefits not only individual workers but the economy as a whole. This cuts government spending by reducing the number of people who have to rely on subsidies. Workers also have more money for their basic needs, which in turn brings more customers to the business, thereby boosting the economy and increasing the demand for additional labor.
Emily Martin, vice president of education and workplace justice at the NWLC, said: “When the bill will increase the wages of women who would be the majority of those getting a raise that would help to shrink race and gender wage gaps.” The raise would moreover raise the earning of women who make up more than two-thirds of tip workers, including restaurant waiters and waitresses. The federal minimum wage for these workers is only $ 2.13 an hour if they do not receive additional income from tip customers (David et al., 89).
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Solving the Housing Problem
Raising the minimum wage will help to control the skyrocketing apartment rent price. Through my personal information, my apartment increased by 20% in three years; however, my wages increased from $7.64 to $8.00 per hour between 2012 to 2014, which is a 4.5% increase in my wages. With a strong economy and increase in population in cities like Denver, the rent is higher and higher since 2010, the rent increases over 66%, which leads to affordable housing problems (cooper). “A full-time minimum wage worker cannot afford a two-bedroom rental anywhere in the U.S.” (Alicaia). Housing is one of the basic human rights element everyone can get it. To be considered affordable, the rent has to cost less than 30% of the gross income. Whereas in this country, full-time workers need to pay 60% to 70% of the total income that they make. Therefore, minimum wage workers cannot even live a standard lifestyle. It is so astonishing people work a full-time jobs, but they cannot afford their basic necessities.
The minimum wage should be raised to provide a low-income family with money to spend. As well, the more people spend, the better the economy, so raising the minimum wage will boost the economy. The government should raise the wage to solve the income and inequality and to fulfill the basic need of society; many people live in poverty, and not all people get paid what they deserve. Even if we live in the capitalist system raising the wage will accelerate to eradicate poverty.
Higher minimum wages improve housing affordability, reduce enrollment in public support programs, and increase local and state taxes. Raising the minimum wage will allow low-wage workers to buy a house, but there is a need for affordable household production (Adamczyk). Raising the minimum wage does not reverse the tendency for housing costs to rise faster than income growth. In addition, low-income seniors and people with disabilities who lack a workforce continue to face the challenge of affordability.
Raising the minimum wage benefits tenants with very low incomes, even if the landlord eventually increases the rent. At the lowest market prices, by charging a higher rent, the landlord may, in theory, be able to make much-needed repairs to their home (if the landlord has an incentive to do so). Theoretically, increasing the minimum wage also contributes to increasing the supply of social housing. Tenants who use vouchers or live in social housing can pay part of their income in rent. The more income they have, the more able they are to pay. This means that the granting agent will theoretically allocate more money to other tenants. In addition to limiting evictions, raising the minimum wage shall provide more housing assistance and more investment in affordable housing across the country to increase the income of the renters.
Works Cited
Adamczyk, A. “Full-Time Minimum Wage Workers Cannot Afford a 2-Bedroom Rental Anywhere in the U.S.” CNBC, CNBC, 26 June 2019, www.cnbc.com/2019/06/26/minimum-wage-workers-cannot-afford-2-bedroom-rental-anywhere-in-the-us.html.
Cooper, D • October 16. “Raising the Federal Minimum Wage to $10.10 Would Save Safety Net Programs Billions and Help Ensure Businesses Are Doing Their Fair Share.” Economic Policy Institute, www.epi.org/publication/safety-net-savings-from-raising-minimum-wage/.
David H. Autor, Alan Manning, and Christopher L. Smith, “The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment,” American Economic Journal: Applied Economics 8 (1) (2016): 58–99.
“The effect of minimum wages increase on employment and family income.” Congress of the United States. Jeanine Rees, February 2014 https://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf
“Where Are Denver Apartment Rents Headed in 2020?” Colorado Real Estate Journal, 15 Nov. 2019, crej.com/news/where-are-denver-apartment-rents-headed-in-2020/.
