Minimum Wage There for a Reason?

Obama has been pushing for an increase in the federal minimum wage, though it has not made headway with congress. Some states, however have decided it is time to raise their regional wage. Bridging the gap between the poor and the wealthy is a noble cause, but it has its downfalls. Mark Wilson of the Cato Institute wrote an article titled The Negative Effects of Minimum Wage Laws on June 21, 2012. We need to think about who truly benefits from this policy if we are to understand it's effectiveness, according to Mark "Only 20.8 percent of all minimum wage workers are family heads or spouses working full time". The remainder of those people consists of either kids, or young people in college. We tend to believe that the people working for minimum wage are typically poor and need the money to raise their family, but these people make up less than 10% of the minimum wage workforce.

Raising the minimum wage does not affect workers in the way that we would hope; in many cases it causes an increase in unemployment. The minimum wage is there for a reason, so some businesses are able to function. With an increase in minimum wage labor cost will go through the roof. Businesses are less likely to hire, and with the increase in wages the job market becomes more competitive. people who have little to no skill are given the boot, and those with high skill are hired. If the people we intend to receive these wages do end up getting this wage boost, they won't be given nearly as many hours, benefits will disappear, and job training will decrease.

This policy is just a way of getting ahead in a political campaign. Several studies have shown how a minimum wage increase either does not do anything for the poor, or it makes things worse. A lot of the poor in our country are unemployed, or if they are employed they already make above minimum wage. Those who are less skilled will be pushed out of the workforce, and lastly, if prices rise to compensate for the wage increase the poor will suffer these costs more heavily.

The plan to increase minimum wage only appears to be a genuine cause.