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There has been an increasing call by a majority of USA citizens in raising the minimum

wage from $7 to $15. However, there is a deep partisan divide that surrounds this proposed

policy. Although there is substantial support to raise this minimum wage, a separate group of

people has a different view. This, therefore, has stalled the enactment of a policy to see it

through. With the rise in the cost of living in the contemporary world, many people perceive the

rise in minimum wage as solution to curb this problem. The fact that the minimum wage has not

been raised for the last decade calls for action, with the promoters of this proposal requesting the

two chambers of Congress to enact a bill that will affect the change. Promoters of this policy to

increase the minimum wage assert that implementing this policy is vital to ensure income keep

up with the increasing cost of living and also to help lift many individuals out of poverty.

However, critics of the proposal to raise minimum wage claim that higher salaries will lead to

various negative effects such as inflation, job losses, and decreased organization

competitiveness.

Prior to making any decision on whether the minimum wage should be raised or not,

there several important factors that need to be considered, such as; cost of living; when raising

the minimum wage, the overall rise in prices and living expenses are vital concerns because

inflation diminishes the real values of the minimum wage over time. One measure used to

identify the price change is the "consumer price index (CPI) (Konny, 2020)." This index

monitors price variations for all goods and services consumers buy across time. Since the

countries may produce different CPI, the CPI used must be meaningful for most cases, because

CPI are more considered in cases where the food cost is higher than average prices as most low-

income families usually spend a large amount of their income on food. Predicted future inflation

is commonly considered since it's impossible to replicate past inflation in the future.
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Nevertheless, because most projections are not accurate and may deviate from actual inflation

rates, a corrective modification can be made if the prediction differs considerably from effective

rates.

Economic factors; when determining the minimum wage, lawmakers should consider the

economic factors. When the minimum wage is excessively increased, it's likely to significantly

impact the labor cost that the firms must pay. This will leads to reduced employment, inflation

and reduced export. However, if the wage is set too low, it will restrict household spending

negatively. Crucial economic factors are; labor productivity; while modifying the minimum

wage, it's critical to consider labor productivity. This provides information on the market worth

of a typical worker's output in the country's economy. It also ensures workers get a portion of the

fruits of growth in the economy. These factors are crucial to consider as they impact individual

life directly.

Evidence supporting both sides of the issues.

For years, the Democrats have tried unsuccessfully increase the minimum wage. To

ensure improvement of living standards for most people, the minimum wage must be raised. The

high minimum wage will offer the low-income earners a suitable income, which will protect

them from the rising cost of living. Research carried out by CBO shows that over 17 million

individual living standards will be raised from an increase of minimum wage to $15 by 2025

(Fox,2020). Furthermore, it indicated that about 1.3 million of them will be lifted from poverty

among these people. Besides lifting of many families and individuals above the poverty line,

increasing the minimum wage will also minimize the money spent by the state and federal

governments on financial assistance towards helping the poor families and low-income earners.
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The proposal's critics meant to increase minimum wage assert that it will cause inflation

and massive job losses. They argue that raising the minimum wage will result in higher wages

and salaries across the line, affecting the cost of doing business for many firms (Neumark, &

Shirley, 2021). Therefore for this organization to stay afloat, they will increase product prices to

compensate for the rising labor cost. Raising the prices translates to an increase in the cost of

living, thus canceling out the benefits achieved through increasing the minimum wage. The other

issues that will result from the raised minimum wage are job losses. CBO experts predict that 1.3

million employment opportunity will be lost if the minimum wage goes up to $15 by 2025.

Increased labor costs will force many organizations to cut jobs to lower the wage bill in ensuring

they make profits.

Assumptions from the arguments

The presumption is that the campaign to increase the minimum wage is a partisan issue.

As per a Gallup study, however, it might be a biased assessment given that most Americans

support the idea to increase the minimum wage. Most respondents, both from the democrats and

republican, favored the push to raise minimum wage. The assumption’s by critics of this idea is

that increasing minimum wage will results in high inflation and massive unemployment.

Nevertheless, this argument may be biased because CBO data which shows 1.4 million job losses

by 2025 if the minimum wage were to be increased to $ 15, has been disputed as incorrect. Dube,

a Massachusetts professor of economics, claims that CBO estimates are incorrect because of

their methodology. He argues that using the CBO data evidence, the minimum wage rises to $15

will only make about 500,000 people lose their jobs nationally. Daniel Kuehn, an associate

researcher at the Urban Institute, claims that higher wages will result in employment losses in the

long run; nevertheless, he asserts that the amount of jobs lost is statistically small.
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My position on the proposal

Considering the above, I am not in favor of increasing the minimum wage policy. While

there may be some benefits to this minimum wage increase, such as elevating families and

individuals above the poverty level, it will cause other low-income earners will lose their job.

Therefore rather than pushing for an increase in the minimum wage, there are other options like

the lawmakers should enact a tax cut program which should exempt people earning less than $15

from paying tax.

My respond

The call to have a minimum wage increase should come to an end because the impact of

this increase will not be favorable to everyone. According to several researches, increasing the

minimum wage will cause job losses inflation and make most firms less competitive. As a result,

this will have a negative impact on our economy's growth. Rather than advocating for a hike in

the minimum wage, it's a good idea to think about other ways to relieve the cost of living burden

on low-paid workers. The government can adopt various strategies to increase low-income

earners' wages without displacing low-skilled workers. For example, adopting refundable tax

credits such as the EITC will enable low-wage workers to increase their income without putting

others out of work.

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References

Fox, N. R. (2020). Minimum Wage/Living Wage. In Profits and Prophets (pp. 33-46). Palgrave

Pivot, Cham.

Konny, C. (2020). Modernizing data collection for the Consumer Price Index. Business

Economics, 55(1), 45-52.

Neumark, D., & Shirley, P. (2021). Myth or measurement: What does the new minimum wage

research say about minimum wages and job loss in the United States? (No. w28388).

National Bureau of Economic Research.