Feeder 2 Unit 2....Arguing Against an Increase in the Minimum Wage (Easier than you may think)

To most Americans, hearing a proposal to increase the minimum wage is a pleasant sound. They immediately think about the extra money they will have to spend, whether on goods and services, rent, or other monthly bills. The average American is unaware of the serious fiscal and societal consequences of such an increase. It is not sensible to allow government to pass litigation for an increase in the minimum wage of any size because high school drop-out rates, unemployment, and the prices of consumer goods would increase.
Earning money, and having the ability to buy goods independently, gives many teenagers a sense of freedom and adulthood. By taking part-time jobs, and working away from home, teenagers become drawn to making money in supplement of higher education. According to a study conducted by Neumark and Washer (2003), a higher minimum wage augments dropout rates for grades 9-10; teenagers who recently transitioned into high school, and find having a job more beneficial than studying the causes of the American Revolution. They conclude that a one dollar increase in the minimum wage could seem to be a convincing enough reason to leave high-school, with the falsehood that this extra money is more important than staying in school (Neumark 4). Instead of receiving a good education, which would result in a higher paying job and more wealth in the future, teenagers will drop out of high school in order to satisfy the desire for monetary rewards. This only damages American society, especially since our country stresses education as being the most important means for success in the future.
To some degree, teenagers leaving school to get a job may be beneficial to a family deep in poverty. The extra money earned could be supplemented for groceries or rent. This apparent positive drawn from an increase in the minimum wage does not overcome the fact that many adults become displaced out of work due to job cuts from employers. Adults, who demand more pay for their work because they feel they are more skilled, lose their jobs to teenagers who are willing to earn close to minimum wage. From a study conducted within the National Bureau of Economic Research (Do minimum wages fight poverty?), if the minimum wage were to be raised by 10%, or about fifty cents today, then the employment rate would drop by one percent (Neumark 3). Our nation is struggling mightily as it is to create jobs today, so an increase in the minimum wage would just compound this problem. Others, like Princeton Economists Alan Kreuger and David Card, profess that giving a boost to the minimum wage increases employment. They feel that more individuals will be compelled to seek employment. To counter for the extra money that the employer must pay his employees, the employer will have to layoff workers in order to maintain his profits (Convery 48).
In concert with having to layoff employees (which increase unemployment) to preserve their profits, companies would also have to increase the price of their goods. This means that the buying power of an individual’s money will decrease from year to year, because rising inflation offsets their improved wage (A Real Minimum Wage Raise...or?). If our government were to raise the minimum wage, it would have to allow for a perpetuation of the minimum wage in line with the inflation rate against the Consumer Price Index (CPI). This would guarantee the American public that the money they earn each year would no worse buy them the same amount of goods and services it did the year before.
Unfortunately for low-wage earners, the major corporations and small businesses in America would be unable to afford such increases. According to a GSCE Economics study, raising the minimum wage by forty cents in a company with 1,000 employees, would force that company to reduce its payroll to 750 workers (gsce 1). This further debilitates the opportunities to create jobs, and validates the negative aspects to which increasing the minimum wage would create.
Staying above the poverty line is challenge enough for low-wage earners in today’s society, and it is no wonder that many individuals are opposed to an increase in the minimum wage. Not only would our country experience rapid inflation, increased drop-out rates in school, and increased unemployment, but more people will be confined to welfare longer; draining our country’s economy further. According to Dr. Peter Brandon of the Institute for Research on Poverty, in states that raised their minimum wage, mothers were forced to stay on welfare 44% longer than in states where the minimum wage remained the same (Saxton). Thankfully, due to debating and research, our political and economic leaders have not raised the minimum wage in seven years.