Since the beginning of COVID-19, our country’s economy has been struggling. The pandemic has caused an increase in unemployment and financial stress. Our nation’s current minimum wage is $7.25. President Joe Biden has planned to lift the minimum wage to $15.00, but this proposal still has yet to be approved by Congress. Economists feel that raising the wage could aid the wallets of those in severe financial distress, but it may also hurt small businesses and companies who are already struggling with this great recession.
PROS OF INCREASING THE MINIMUM WAGE:
1. More Americans Will Be Pulled Out Of Poverty
Experts believe that Biden’s plan could result in taking Americans who make the lowest-wage out of poverty. This could also help the degraded groups of Americans who work unbalanced minimum wage positions.
2. Increasing The Wage Will Help Those Who Have Been Heavily Impacted By The Global Pandemic
The majority of businesses we lost during this pandemic were restaurants, hospitalities, and tourism workers. According to Bankrate, around 62 percent of all positions at clothing stores as well as 49 percent with leisure, hospitality, food, and drinking places have been cut by employers between last February and April.
3. Putting More Money In The Hands Of People Who Will Spend It Helps The Economy
By granting the chance for Americans to have more money in their pockets, that also means they will eventually readily spend that money towards the community. It will give Americans the opportunity to stimulate consumer spending which will benefit our economy. According to the Louisiana WAFB9 News, Dawn Starnes McVea, with the National Federation of Independent Business (NFIB), said “Maybe a little increase in the costs of goods and services may not be such a bad thing, but we’re not in a good economy, given the situation right now,”.
CONS OF INCREASING THE MINIMUM WAGE:
1. It May Harm Both Small Businesses And Companies
According to Bankrate, a CBO report calculated that hiking up the minimum wage to $15 may result in putting about 1.3 million individual Americans out of work. This is going to restrict economic growth at some capacity. CBO disclosed, “Real income is also reduced for nearly all people because increases in the prices of goods and services weaken families’ purchasing power,”.
2. Employers With Budgets Will Lay Off Employees
This raise will result in those employers with budgets laying off their employees in order to remain neutral. All the negative effects that unemployment is going to weigh down on the economy, preventing it from growth.
3. Businesses Will Pause New Hires
Since there will be employees laid off by their employers, it will become harder for college graduates and others to seek new jobs. This will limit both the opportunity to receive pay, which will limit their amount in spending toward society; resulting in less stimulation towards the economy.
Overall, raising the minimum wage could benefit or hurt certain people and businesses, depending on where they stand financially with their employment.
Advocates weigh in on pros and cons of proposed $15 minimum wage hike
Pros and Cons of Raising Minimum Wage
Biden’s $15 Minimum Wage Plan — Here’s Who It Might Help And Hurt | Bankrate