Running head: ECON DISCUSSION 1

Econ Discussion

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Econ Discussion

Martin (2017) talks about the Raise the Wage Act, a bill introduced by what he calls “top

congressional Democrats.” The legislation, which was suggested in 2017, aimed at increasing the

minimum wage from $7.25 to $15 per hour by 2024. The law, according to Sen. Bernie Sanders,

aims to make sure people who work for around 40 hours every weak do not languish in poverty.

In a Congress that the Republicans control, however, it is unlikely that the bill will get through.

Republicans, too, have wanted to raise the minimum wage, but the suggested rate might be way

too high for the Republican's liking. Economists fear that increasing the minimum wage rate

might cause unemployment, especially because small-scale businesses might not afford to pay

workers at that rate. Several states, including Los Angeles and San Francisco, are already

working with the $15 per hour rate.

The minimum wage rate is the economic idea that this news story presents. According to

Fanti and Gori (2011), the minimum wage has a massive impact on economic growth and

development. A higher rate, for instance, might reduce income inequality by making sure

workers earn enough money to live a good life. However, a higher rate might also deter

economic growth, especially when it targets SMEs. While protecting average workers from low

pay is the goal of minimum wage rates, the government must ensure that it does not set the rate

too high that it scares off investors and entrepreneurs from setting up businesses in the country

(Edo and Rapoport, 2019).

I think there are good reasons why the legislators should champion for a higher minimum

wage rate. Making less than $8 in an hour is no longer adequate, mainly because the cost of

living is rising steadily. However, I do not support politicizing the issue. Congress plays a vital

role in policymaking and development, but I think any decisions that it makes needs to have the
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backing of economists and industry experts. Employers and their organizations should be

adequately engaged. Without proper consultation, increasing the minimum wage might result in

labor strikes.

Raising the minimum wage would, without a doubt, help many people. It will allow

people to live better lives, including buying homes and taking their children to school. Proverbs

22:22 talks about not exploiting the poor, calling employers to be fair in the way they

compensate their workers. Generally, the Bible calls Christians to care for one another, being the

"brothers' keepers." However, increasing the minimum wage might also have adverse impacts on

the economy, which the poor will also experience. For instance, it will make it hard to start a

business, which will limit job opportunities. Employers will pass on the cost of labor to products

and services, thereby making them more expensive. Christians, therefore, would want to find the

best balance that will ensure employers decide on fair wages that will not adversely affect the

economy.
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References

Edo, A., & Rapoport, H. (2019). Minimum wages and the labor market effects of immigration.

Labour Economics, 61, 101753.

Fanti, L., & Gori, L. (2011). On economic growth and minimum wages. Journal of Economics,

103(1), 59-82.

Martin, J. (2017, May 25). Democrats officially introduce $15 minimum wage bill. Retrieved

January 31, 2020, from https://www.washingtonexaminer.com/democrats-officially-

introduce-15-minimum-wage-bill