Regardless of what our political ideologies are, the issue of minimum wage in United States has been very controversial. The problem of income inequality becomes bigger as the economy grows. As David Cooper, an economic analyst at the Economic Policy Institute, argues in the article, this divergence between the rich and the poor can be found in economic data. As productivity increased, corporate profitability and the income for the highest earners increased as well. However, the wages for the middle and the lower classes did not change that much. Mr. Cooper says that incomes have actually fallen due to minimum wage.
Today’s minimum wage is $7.25. The question I want to ask everyone is: Is it enough? Full time minimum wage workers today earn about $15,000 a year, or about 1250 dollars per month. I am not sure if this would be enough for a family to make a living. Some might argue that there are other policies such as food stamps or tax credit, but can we continue these programs instead of making some changes with minimum wage?
There is a debate going on in the Congress about raising the minimum wage to about $10.10 per hour. If it happens, then about 30 million workers will get a raise with 9 million of them whom are parents.
At the same time, it is possible that raising the minimum wage can kill jobs and lower labor demand. However, as Mr. Cooper argues, there is ample evidence that increase in minimum wage has little to no effect on employment. It is also possible that with higher wage, workers have more incentives to work harder and lead to higher productivity. Raising minimum wage can be one of the steps to reduce the gap between the rich and the poor.
Source: US News