Minimum Wage Increases Would Causes Problems

President Joe Biden made promises to the nation that when elected he would begin the process of raising minimum wage from $7.25 to $15, by doing this there will be nationwide problems.

According to the article from Quartz, Biden stated, “No one working 40 hours a week should live below the poverty line.” “If you work for less than $15 an hour and work 40 hours a week, you’re living in poverty.”

By raising the minimum wage to $15 it would create long term problems that could harm the nation’s economic state. Businesses are the ones to suffer the most because the value of the dollar would change.

According to the Investopedia website, that the main problem with increasing minimum wage is that businesses will be forced to raise their prices to keep up with the inflation rates.

Businesses would have to keep up with the minimum wage by raising prices. By doing this, owners would fire people because they cannot afford to keep a number of employees at that high of a pay because the businesses need to make a profit. It has been predicted by Congressional Budget Office, that by raising the minimum wage by the year 2025, 1.3 million jobs will be lost.

IZA World of Labor stated, “If low income workers lose jobs and cannot find new ones because of higher minimum wages and there are no social safety nets, higher minimum wages will increase poverty.”

This statement can be argued, because the main point of raising the minimum wage was to have people be able to rise over the poverty line.

According to the U.S. Census Bureau, the United States current poverty rate as of 2019 is 10.5 percent.

In 2019, the Congressional Budget Office’s project report about the increase of minimum wage stated “A significant improvement in the standard of living for at least 17 million people.”

Though if this predicted to be true, there are other people who could possibly not have a job at all because of the competitiveness of the job search after the wage is increased.

The increase to minimum wage would eventually harm families because of the price increases throughout the nation. With the predicted amount of job losses, raising minimum wage would create more harm.

Increasing the minimum wage from $7.25 to $15 is a dramatic increase that could have households and the economy suffering for years if done too quickly. By increasing the wage it could put families in worse situations then they were initially in to begin with.