Should Minimum Wage Be Raised? Write A 1000-Word Research Pa ✓ Solved

Should minimum wage be raised? Write a 1000-word research pa

Should minimum wage be raised? Write a 1000-word research paper arguing for or against raising the federal minimum wage in the United States. Use credible academic and policy sources, include in-text citations, and provide a References section with at least 10 credible sources. Address economic, social, and labor-market effects, consider counterarguments, and conclude with a clear recommendation.

Paper For Above Instructions

Introduction

The debate over whether to raise the federal minimum wage in the United States centers on trade-offs between improving living standards for low-wage workers and potential negative effects on employment and prices. This paper argues that a carefully phased and regionally-indexed increase in the federal minimum wage is desirable because it reduces poverty, raises worker productivity, and boosts aggregate demand, while manageable policy design can mitigate adverse employment effects (Cengiz et al., 2019; Dube, 2019).

Background and Context

The federal minimum wage has remained $7.25 per hour since 2009. Over the same period, costs for housing, healthcare, and education have risen substantially, eroding real purchasing power for minimum-wage households (CBO, 2019). Numerous empirical studies—using different methods and datasets—find small and sometimes negligible employment effects from moderate minimum-wage increases but consistent gains in wages for low-paid workers (Card & Krueger, 1994; Dube, 2019).

Economic and Social Benefits of Raising the Minimum Wage

Raising the minimum wage directly increases earnings for low-income workers, which reduces poverty and income inequality in the short term (Grishina & Kuznetsova, 2018). Higher incomes for low-earners translate into higher marginal propensity to consume, increasing local demand for goods and services and supporting small businesses in low-income communities (Zipperer, 2019). Empirical evidence also suggests that higher wages can raise worker productivity through reduced turnover, improved morale, and better on-the-job effort (Kim & Jang, 2019; Dube, 2019).

In addition, higher wages can reduce public expenditures on social safety net programs by lifting families above eligibility thresholds for certain benefits, thereby improving fiscal efficiency in the medium term (CBO, 2019). When structured as gradual, predictable increases tied to inflation or regional cost-of-living indices, minimum wage policy can provide stability for both employers and workers while preserving purchasing power (Cengiz et al., 2019).

Labor-Market Effects and Productivity

Concerns that higher minimum wages lead to large-scale job losses are common, but the literature yields mixed results. Natural experiments and quasi-experimental studies often find small employment effects, especially when increases are moderate and phased in (Card & Krueger, 1994; Dube, 2019). Some sectors, such as restaurants and retail, implement operational adjustments—fewer hours, modest price increases, or productivity-enhancing investments—rather than mass layoffs (Kim & Jang, 2019).

Moreover, firms that face higher labor costs have incentives to invest in training, technology, and process improvements that increase labor productivity and can offset wage costs over time (Dube, 2019). For many low-wage employers operating in tight local labor markets, raising wages can reduce recruiting and training costs by lowering turnover (Zipperer, 2019).

Counterarguments and Trade-offs

Opponents argue that a large, abrupt federal increase—such as to $15 per hour—could raise labor costs enough to induce layoffs, reduce hiring, or accelerate automation in some industries (Neumark & Wascher, 2008; Phelan, 2019). The Congressional Budget Office (CBO) estimated that certain proposed increases could result in fewer employed hours for some workers while lifting others out of poverty, highlighting trade-offs between employment and income gains (CBO, 2019).

Price effects are another concern. If businesses pass higher labor costs onto consumers, essential goods and services could become more expensive, partially eroding the real gains of a higher nominal wage for low-income households (Mullen, 2018). These risks are heightened in regions with low average wages and weak demand.

Policy Design to Maximize Benefits and Minimize Harm

Policy design matters. To capture benefits while limiting negative impacts, a federal increase should be gradual, allow regional adjustments, and be accompanied by supporting measures. Recommendations include:

  • Phasing increases over several years to give firms time to adapt (Cengiz et al., 2019).
  • Allowing regional or local supplements where costs are higher and allowing lower initial rates in low-cost areas to reflect local labor markets (Dube, 2019).
  • Coordinating wage increases with targeted tax credits or subsidies for small businesses and training programs to offset transition costs (Zipperer, 2019).
  • Monitoring outcomes with rigorous evaluation to adjust policy as needed (CBO, 2019).

Recommendation and Conclusion

On balance, the evidence supports a carefully structured increase in the federal minimum wage. When implemented gradually and with regional flexibility, increases can raise incomes for low-wage workers, reduce poverty, stimulate local demand, and encourage productivity-enhancing responses from firms while limiting adverse employment effects (Card & Krueger, 1994; Dube, 2019; Cengiz et al., 2019). Policymakers should combine a phased federal hike with regional indexing, targeted support for small businesses, and evaluation mechanisms to ensure that the policy achieves its social and economic objectives without undue harm to employment.

Raising the minimum wage is not a panacea, but as part of a broader policy toolkit—including earned income tax credits, workforce development, and affordable housing—an appropriately designed minimum-wage increase can be an effective tool to improve living standards and economic resilience for millions of Americans (Grishina & Kuznetsova, 2018; Zipperer, 2019).

References

  • Cengiz, D., Dube, A., Lindner, A., & Zipperer, B. (2019). The effect of minimum wages on low-wage jobs: Evidence from the United States using a bunching estimator. National Bureau of Economic Research.
  • CBO (Congressional Budget Office). (2019). The effects on employment and family income of increasing the federal minimum wage. Congressional Budget Office report.
  • Card, D., & Krueger, A. B. (1994). Minimum wages and employment: A case study of the fast-food industry in New Jersey and Pennsylvania. American Economic Review.
  • Dube, A. (2019). Minimum wages and the distribution of family income. Journal of Labor Economics.
  • Grishina, E. E., & Kuznetsova, P. O. (2018). Minimum wage as a tool to reduce poverty: Expected consequences of the reform. Journal of the New Economic Association, 40(4).
  • Kim, H. S., & Jang, S. (2019). Minimum wage increase and firm productivity: Evidence from the restaurant industry. Tourism Management, 71.
  • Neumark, D., & Wascher, W. (2008). Minimum Wages. MIT Press.
  • Phelan, J. (2019). 5 reasons raising the minimum wage is bad public policy. Foundation for Economic Education. Retrieved from fee.org.
  • Mullen, T. (2018). The best argument against minimum wage laws. Foundation for Economic Education. Retrieved from fee.org.
  • Zipperer, B. (2019). Gradually raising the minimum wage to $15 would be good for workers, good for businesses, and good for the economy: Testimony before the U.S. House Committee on Education and Labor. Economic Policy Institute.

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