Benefits Of Raising The Minimum Wage

Minimum Wage: The Benefits of Raising Minimum Wage

The debate over whether increasing the minimum wage would yield positive or negative effects on society remains a highly pertinent issue. Advocates argue that raising the minimum wage enhances economic stability and social equity, while opponents fear potential job losses and economic downturns. The core question is whether implementing a higher minimum wage is a beneficial policy for the nation, particularly in ensuring fair compensation, reducing poverty, and fostering sustainable economic growth.

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Raising the minimum wage has long been a contentious policy proposal, with the primary goal of promoting economic fairness and reducing poverty. The current federal minimum wage of $7.25 per hour has remained unchanged since 2009, despite inflation and rising living costs. Many states have set their own minimum wages, often higher than the federal level, reflecting regional differences in cost of living. This disparity highlights the ongoing debate about whether a national increase is necessary to ensure a livable income for all workers.

Proponents argue that increasing the minimum wage provides several tangible benefits. Firstly, it directly elevates the income of low-wage workers, allowing many to meet basic needs such as housing, food, healthcare, and education. According to Cooper and Hall (2014), boosting the earnings of the lowest-paid workers extends beyond individual benefits, positively impacting broader economic stability by increasing consumer spending and reducing dependence on public assistance programs). They state, “The immediate benefits of a minimum-wage increase are in the boosted earnings of the lowest-paid workers, but its positive effects would far exceed this extra income.”

One significant issue with current wage levels is the high reliance of low-income workers on government assistance. The Economic Policy Institute (2016) reports that over 50% of workers earning less than $12 an hour depend on forms of means-tested aid such as food stamps, Medicaid, and housing subsidies. Increasing the minimum wage would not only improve workers’ financial stability but also reduce government expenditures on welfare programs, which would save billions annually. These savings could be redirected toward affordable housing initiatives or other social programs, bolstering overall societal well-being.

Housing affordability remains a critical concern. The National Low Income Housing Coalition (2015) reports that a person earning minimum wage would need to work over 100 hours weekly—more than two full-time jobs—to afford a modest two-bedroom rental in many parts of the country. This economic reality leaves minimum wage workers vulnerable to homelessness and substandard living conditions. Raising the minimum wage would enable workers to afford adequate housing, thus improving health outcomes and family stability. Marta Podemska-Mikluch (2016) argues that sharing housing costs through dual-wage earners can mitigate some affordability issues; however, this is not a feasible solution for single-parent households or those with only one income earner.

Health outcomes are also significantly impacted by income levels. Studies indicate that increased wages correlate with improved psychological and physical health. Leigh and De Vogli (2016) found that higher wages lead to better mental well-being, decreased stress, and healthier lifestyles. Moreover, sufficient income during pregnancy reduces incidences of low birth weight and infant mortality, which have lifelong consequences. Komro et al. (2016) demonstrated that a minimum wage increase could reduce adverse birth outcomes, thus saving many infants’ lives and improving long-term health prospects.

Despite these compelling benefits, opponents express concern that raising the minimum wage could lead to increased unemployment, particularly among teenagers and low-skilled workers. Critics argue that higher wages compel employers to reduce hiring, automate jobs, or even shut down. However, research from the National Employment Law Project (2015) counters this view, indicating that businesses often absorb increased labor costs through increased productivity, reduced turnover, and higher employee morale. Additionally, a study by Sanja Blazevic (2013) found that employment decreases among teenagers following minimum wage hikes, but many argue that teenagers’ work experience is a temporary phase that does not outweigh the long-term benefits of fair wages for adults supporting families.

To address economic concerns while securing the benefits of increased wages, a phased approach is often recommended. Robert Pollin and Jeannette Wicks-Lim (2016) propose implementing gradual increases over four years, allowing businesses to adjust without significant layoffs. Regional adjustments based on local costs of living are also suggested, so wages are tailored appropriately, preventing undue economic strain in areas with lower living expenses.

From an ethical standpoint, utilitarianism provides a compelling rationale for raising the minimum wage. This ethical framework emphasizes actions that produce the greatest good for the greatest number. By increasing wages, society maximizes overall well-being, reduces inequality, and promotes social justice. Julia Driver (2014) states that utilitarianism advocates for policies that enhance overall happiness, which aligns with the societal goal of providing fair compensation to all workers. The Economic Policy Institute (2016) estimates that raising the minimum wage to $12 by 2020 could benefit over 35 million workers, significantly improving their quality of life.

In conclusion, the evidence suggests that increasing the minimum wage is not only a moral imperative but also a practical policy tool to promote economic stability, improve health outcomes, and reduce poverty. While concerns about potential job losses are valid, empirical data indicates that the overall benefits outweigh the negatives, especially when such increases are implemented gradually and regionally. Ethical considerations rooted in utilitarian principles reinforce that ensuring fair wages aligns with societal interests in promoting collective well-being, fairness, and long-term economic resilience.

References

  • Blazevic, S. (2013). Is Employment Decreasing Due to Minimum Wage Increase? Ekonomska Istrazivanja/Economic Research, 26(1), 69-100.
  • Cooper, D. (2015). Raising the Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Workers. Economic Policy Institute.
  • Cooper, D., & Hall, D. (2014). How Raising the Federal Minimum Wage Would Help Working Families and Give the Economy a Boost. Economic Policy Institute.
  • Driver, J. (2014). The History of Utilitarianism. Stanford Encyclopedia of Philosophy.
  • Economic Policy Institute. (2016). The Impact of Raising the Federal Minimum Wage to $12 by 2020. EPI.
  • Komro, K. A., Livingston, M. D., Markowitz, S., & Wagenaar, A. C. (2016). The Effect of an Increased Minimum Wage on Infant Mortality and Birth Weight. American Journal Of Public Health, 106(8). doi:10.2105/AJPH.2016.303268
  • Leigh, J. P. (2016). Could Raising the Minimum Wage Improve the Public’s Health? Retrieved from
  • National Low Income Housing Coalition. (2015). Out of Reach 2015: The High Cost of Housing. NLIHC.
  • Pollin, R., & Wicks-Lim, J. (2016). A $15 U.S. Minimum Wage: How the Fast Food Industry Could Adjust Without Shedding Jobs. Journal of Economic Issues, 50(3).
  • Sanja Blazevic. (2013). Is Employment Decreasing Due to Minimum Wage Increase? Ekonomska Istrazivanja/Economic Research, 26(1), 69-100.

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