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4 Consequences Minimum Wage Detractors Predict If It's Raised

By    |   Monday, 06 Apr 2015 03:21 PM

Raising the minimum wage from $7.25 to $9 or $10.10 sounds great for some people. However, the problem opponents of  raising the minimum wage have is that the proposals could potentially hurt people and the economy.

Here are four consequences adversaries predict will happen if the minimum wage is raised:

1. Opponents of a raise in the minimum wage believe employment would be adversely affected. The effects from a raise in the federal minimum wage to a proposed $10.10 an hour could cost about 500,000 workers their jobs by the end of 2016, according to a review by the Congressional Budget Office. Raising it to $9 would lose about 100,000 workers.

Urgent: Do You Think the Minimum Wage Should Be Raised?

An analysis of state minimum wage increases by Dr. Joseph Sabia of the University of Georgia indicated a relationship with a decline in employment between 1979 and 2004. A 10 percent increase in the minimum wage correlated with a decline in retail and small business employment by just under or over 1 percent, according to Employment Policies Institute. Teen unemployment dropped by 2.7 to 4.3 percent in the retail sector.

2. Younger people with fewer skills would be hurt the most. A raise in the minimum wage would make many people looking for jobs unemployable because many small business owners wouldn't be able to fit the increase in their budgets.

Younger people would most likely be the ones to lose their jobs or unable to find one. They would be denied the chance to learn skills for higher-paying jobs. According to Yaron Brook and Don Watkins, contributors for Forbes, "it isn't low pay that's unfair — it's preventing people from offering and accepting jobs that's unfair."

3. Small businesses would be hurt when minimum wage increases force them to hire fewer people or even go out of business.

Vote Now: How Do You Feel About the Minimum Wage?

Geoffrey Pike, a contributing editor for Wealth Daily, gave the example of a small business with 20 employees. Half of them might make minimum wage. When wage increases become federal law, experienced workers might face working for the same amount as inexperienced workers.

The employer might even close the business if increases go up by $2.85 if the rate reaches $10.10, because it could cost an extra $5,000 for that business. Not only does the business close but the employees are now out of work.

4. With the unemployment rate going up because of minimum wage hikes, more people, especially younger people, would be trapped in a cycle of poverty and joblessness. They would begin to lose their feeling of self-worth and value. As jobs become scarce, they would become more dependent on the government and welfare, according to Sen. Alexander as reported by The Huffington Post.

Tell Us: Should the Government Raise the Minimum Wage?

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Raising the minimum wage from $7.25 to $9 or $10.10 sounds great for some people. However, the problem opponents of raising the minimum wage have is that the proposals could potentially hurt people and the economy.
minimum wage, consequences, detractors, predict
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2015-21-06
Monday, 06 Apr 2015 03:21 PM
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