Professor D Heredia
English 1101 4376
Minimum Wage and it’s Effects on Poverty in the U.S.
In the United States, minimum wage and the poverty line seem to proceed arm in arm. Not in the sense that minimum wage has caused today’s poverty rate, simply in the sense that families living below the poverty line are made up of people with low wage jobs. If the simple solution to poverty in America is raising the minimum wage, why is the decision so controversial? Shouldn’t the goal be to bring every family in the U.S. above the poverty line? If only it was that simple. There are consequences to raising the minimum wage that must be taken into consideration before we change the laws that outline our income rates. How would raising wages effect employee turnover rates? We must answer important questions such as this one before any argument is made. Does our country truly need a higher minimum wage?
“Don’t Ignore the Costs of Minimum Wage Increases When Celebrating the Benefits,” by Michael Strain points out that raising the national minimum wage may not be as great as it seems. Taking data from the Congressional Budget Office, Strain shows that although raising the minimum wage has previously increased the total yearly wages by nearly $31 billion. Only a meager 19% of that massive amount would be going to households with incomes laying beneath the poverty line. Still, 29% of that $31 billion would go to households living at around three times the rate of those beneath the line of poverty. While this makes sense, not everyone that has a low wage job is living below the poverty line. The only reason we are even remotely concerned about raising the minimum wage is to assist those living in poverty, with an end goal to eliminate poverty altogether, however if a raise in wages doesn’t directly correlate to lowering our national poverty rate, there must be other factors to observe. If the minimum wage were to be raised, it would lead to an influx in middle and upper-class citizens vying for low income jobs, as what was previously considered to be an unlivable income would be enough to support a small family. Those that are above the poverty line would in turn, consume a majority of the newly available low-income jobs, leaving those below the poverty line to fight over the scraps that are left. When we look at it this way, there has been little to no progress in the struggle against poverty.
Heather Boushey counters Strain with her article entitled, “Benefits of Minimum-Wage Increases Seem Too Good to Be True, But They’re Not,” where she argues that raising the national minimum wage has only served our benefit. Using data from the U.S. Census Bureau taken from 2015, Boushey shows that on average, the annual household income for low income families raised by nearly 5.2% from 2014. This statistic was the greatest yearly increase in income since 1967 when the U.S. Government first began recording income statistics. The yearly income for low income families in 2015 taken by average, was around $56,500. After the raise of the national minimum wage in 2009, census data shows that around 3.5 million American Citizens worked their way above poverty the poverty line in 2015, directly linking the raise in wages to the decrease in poverty. However, the greatest obvious impact would have to be the increase in quality of life for low income families. While living paycheck to paycheck isn’t ideal, there’s ample hope that once another wage increase is in effect, we will see an even greater increase in families rising above the poverty line.
Taking the time to compare both articles, it is not so simple to determine whether the negatives out weigh the positives, and in turn if the positives out weigh the negatives when it comes to raising the national minimum wage. It is easy to fear that another national raise in minimum wage will do nothing to aid the impoverished, nevertheless we have already seen some of the benefits. There is always the argument that once the national minimum wage is increased, low income citizens will have a hard time keeping their jobs, but it is incredibly unrealistic. There will most likely be a greater competition for available low-income jobs, yet it isn’t reason enough to not raise the national minimum wage. We have already seen in data from 2014 to 2015 that raising wages in turn raised the annual income increase to the highest its been in 50 years. While I don’t think the wage increase should be as drastic as the “Fight for 15” cause, I do think that an increase is called for, even if it is simply to improve the general quality of life. Saying that this purposed wage increase successfully brings families out of poverty, we would also see an economic affect as well, for the better of course. This would give families the opportunity to invest, send children to college, take vacations, and buy houses, which would only help to better the economy. I see this as nothing but positive, as the negative arguments do not even begin to compare to those of the positive.
Now that I’ve examined and researched both the positives and negatives of this situation, I’ve come to the decision that a minimum wage increase can only serve our country for the better. The national poverty rate is something that our country needs to fix, and now that there is solid evidence proving that a wage increase may help, I see little reason not to proceed. While this is just my opinion, and I’m sure there are plenty of other opinions to contradict my own, I feel very strongly about a wage increase and cannot fathom why we would hesitate to put one into place. In closing, the idea of a raise in minimum wage may be daunting, but I feel as though it’s a needed change to help aid our all-around growth as a country.
Boushey, Heather. “Benefits of Minimum-Wage Increases Seem Too Good to Be True, But They’re Not.” New York Times. The New York Times, 29 Sept. 2016. Web. 29 March 2018.
Strain, Michael R. “Don’t Ignore the Costs of Minimum Wage Increases When Celebrating the Benefits.” The New York Times. The New York Times, 29 Sept. 2016. Web. 28 March 2018.