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Should The Minimum Wage Be Increased?

Sami Salamoun

Northwest Career and Technical Academy

English 12, Period 1

Ms. Acosta

March 5th, 2021

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Abstract

Throughout this argumentative paper, the topic of increasing the minimum wage is

discussed. I have conducted research about the effects on people and the economy for raising the

minimum wage to 15 dollars an hour. After examining several sources, I have found that there

are more negative impacts than positives for increasing workers’ pay, and a few of the impacts

involve rise in unemployment, inflation, and shutting down businesses. You may also read about

the effects of the current pandemic towards this situation and how it may worsen the causes of

the minimum wage raise.

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Should The Minimum Wage Be Increased?

Increasing the minimum wage to $15 an hour may sound really good to people living

below the poverty line, but will it destroy the economy for everyone else? With the inauguration

of Biden's presidency in January 2021, it’s in the president's interest to increase the nation's

minimum wage to $15 an hour from the previous $8.25 (in Nevada). A difference of over $6.50

in extra pay can really make a dramatic change in how we make and spend our money. With over

42.4% working under $15 an hour, we can expect a definite increase in over 17 million

American workers’ paychecks. Although some may say that increasing the minimum wage

would lift workers out of poverty, raising the minimum wage would ruin the economy by causing

inflation, laying off employees, and lead to businesses closing.

For many American workers, minimum-wage jobs are temporary to moving on to more

suitable higher paying jobs. Raising the minimum wage will make it more expensive for

employers to hire workers, therefore a massive unemployment will occur if this happens.

Especially now going through a pandemic, many businesses are struggling to pay their workers

which is causing millions of Americans to be laid off. “The country has lost 20.6 million jobs

since mid-March, resulting in an unemployment rate of 14.7%, a level not seen since the Great
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Depression in the 1930s”(Soucheray 2020). This conveys how much the pandemic affected

several workers as this increase of unemployment has not been this bad since the 1930s which

shows how negatively this base pay will impact workers. Many people have already lost their

jobs due to the pandemic, and raising the minimum wage would create even more job loss. This

is because it would be too expensive for businesses to keep the same amount of employees and

raise all their pay which results in laying off workers. “One-third of small businesses anticipate

laying off workers if Congress increases the federal minimum wage to $15 an hour, according to

the latest CNBC|SurveyMonkey Small Business Survey”(Subin 2021)

Not only does raising the minimum wage nationwide affect the availability of the

workforce, but also causing inflation to occur in our economy. Inflation is the general increase in

price and fall in the purchasing value of money. “Many recent state and city-level minimum

wage increases have been scheduled to be implemented over time and often are indexed to some

measure of price inflation”(Carinci 2016). When employees are given more money to spend that

money overtime will be worth less and less as the years go on. This is causing all the money

saved up for long periods of time worth much less than it should. One way in preventing loss of

money value is investing in the economy so it can grow with it rather than just saving. “We have

been stuck at near-zero inflation and near-zero interest rates for almost a decade, from well

before the Covid-19 pandemic. As long as this remains true, the Federal Reserve Board cannot

use the interest rate as a tool for stimulating the economy, since interest rates cannot fall below

zero”(McNelis 2021).
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More than anyone, the increase of minimum wage can really hurt small

businesses/companies the most by not being able to provide the wage an employee needs. “On

the demand side, many businesses face plummeting net revenues and even closing; this is

particularly true of the small businesses already damaged by the COVID-19 recession that

disproportionately hire those workers” (Soto 2021). With the loss of employees to an employer,

the business may not have the people it needs to function and serve customers successfully, this

would result in the business having to close which can ruin an entrepreneur's dream in starting a

business which can also lead to their unemployment. As the time goes on without small

businesses up and running, we may not have new products/services in the future because all of

the big companies we know today like Amazon and Walmart started small, but began to grow

with the help of thousands of employees. That wouldn't have been possible if those companies

had not paid the low minimum wage.

Ultimately, raising the minimum wage could not only negatively affect the employment

rate, but could also affect businesses owners. Although this increase sounds like a great idea for

those who would like to make more money during a pandemic, it actually allows less job

opportunities in a time where the unemployment rate has risen to the extreme. Increasing the

minimum wage also has greater negative effects than positives as it results in inflation and

increased costs. While conducting research and examining several different sources, it can

clearly be seen that the idea of raising the minimum wage is not sustainable.
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References

Stephanie Soucheray | News Reporter | CIDRAP News  | May 08, 2020. “US Job Losses Due to

COVID-19 Highest since Great Depression.” CIDRAP, 8 May 2020,

www.cidrap.umn.edu/news-perspective/2020/05/us-job-losses-due-covid-19-highest-great-

depression.

“Does Increasing the Minimum Wage Lead to Higher Prices?” Upjohn Institute,

www.upjohn.org/research-highlights/does-increasing-minimum-wage-lead-higher-prices.

McNelis, Paul D., et al. “Raising the Minimum Wage Will Increase Inflation. That's a Good

Thing.” America Magazine, 17 Feb. 2021,

www.americamagazine.org/politics-society/2021/02/17/raise-minimum-wage-increase-infl

ation-fifteen-dollars-debate-240031.

Soto, Isabel, et al. “Examining the Effects of Raising the Federal Minimum Wage to $15.” AAF,

27 Jan. 2021,

www.americanactionforum.org/insight/examining-the-effects-of-raising-the-federal-minim

um-wage-to-15/.

Subin, Samantha. “$15 Minimum Wage Will Result in Layoffs, One-Third of Small Business

Owners Say: Survey.” CNBC, CNBC, 10 Feb. 2021,

www.cnbc.com/2021/02/10/one-third-of-small-businesses-say-15-minimum-wage-means-

ayoffs.html.