How could Minimum Wage Increase Help the Poor
It has long been debated whether the minimum wage would be beneficial for the poor. The minimum wage should be increased to help people from working-class families. The cost of living is so high, especially in major cities such as New York, that it is nearly unbearable to raise a family on a minimum wage income. A single-family has to make ends meet to survive on a minimum wage job. Living expenses are just too outrageous to simply live on a minimum wage alone. The minimum wage amount is crucial to the survival of the working class. To improve circumstances it is recommended that individuals seek a college education and government to increase the minimum wage.
In most households, the regular minimum wage offers a minimal contribution to family income. Employees who would benefit from an increase in minimum wages are full-time employees that work thirty-five or more hours. For families to survive today, the minimum wage needs to be increased as according to New York Governor Cuomo’s plan. “Since 1938, the minimum wage has only been raised 22 times. The last time the minimum wage was raised was in 2009, when it was brought to $7.25 per hour (Lambardo). The increase of minimum wage is long overdue.
The cost of education is unaffordable for minimum wage workers and working families. It is very important to receive a college degree in today’s world. A college degree is often considered a necessity rather than an option for most employers who are seeking to hire workers nowadays. With education, people can obtain a better job or career to better themselves. Due to impoverished families, many students must pay for college out of pocket for a college degree or obtain loans. If the minimum wage is not increased; these individuals are at a disadvantage if they are obtaining school loans. The debt created from school loans will hinder them to improve their financial situations. Many low-income individuals have either delayed college entry or postpone college to avoid hefty student loan debt. It is a vicious cycle; it minimum wage is not increased low-income individuals cannot change their circumstances. They cannot attend college and hence unable to support themselves. If the minimum wage is increased, numerous people can continue their education. Advanced education is necessary because the work requirement for a decent paying job is highly dependent on it. The education component also includes technology updates that individuals will learn in school.
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To be competitive in this current society both employers and employees must be up to date with new technology. There are some employers that are willing to invest in their employee’s future. These employers have tuition reimbursement programs. Individuals that work for such employers and get paid a minimum wage are fortunate. However, such employers are few and not the case for most low-income individuals. It is important to reiterate that advanced education is necessary and increasing the minimum wage will afford more individuals the opportunity to seek financial success.
There are many benefits to raising the minimum wage rate such as it would consumer spending while reducing reliance on government funding for basic needs. The increase will specifically help those working-class families. They will no longer have to live check to check. “The Economic Policy Institute reports that a rise in the federal minimum wage to $12 per hour in the United States by 2020 would reduce public assistance spending by $17 billion each year. These savings could then be used to strengthen the other social safety net programs which are operated by the government. At the current minimum wage level, almost 60% of workers receive some type of public assistance, for themselves or through a family member. For workers earning between $12.17-$14.72 per hour, those receiving public assistance is cut in half. Even in prices went up because there was more money within local economies, most households would be better off with the higher minimum wage than they were using public assistance programs” (Lambardo). To be clear public assistance will not be gone; however, the number of help families will require will be reduced. This can help save government funding and allow money to be reallocated to other important issues such as education. Families will be spending more on other items like clothing, vacations etc. that helps stimulate the economy.
An increase in the minimum wage is needed to help individuals’ access basic needs such food, shelter and medical assistance. All expenses from schooling, food, and medication have increased. As welfare reform services the poorest families to rely on their salaries from low paying jobs, I believe an increase in a minimum wage will help to minimize poverty. An increase in a minimum wage will also inspire people to go get jobs and not rely on public assistance. Individuals would feel that they are getting a reasonable pay rate for their job. I know people that are receiving more money from public assistant than a person that is making minimum wage. The real question is “Why would a person get a job making minimum wages when they can get public assistance, Medicaid, food stamps, and cash assistance for not working?” In such cases, it cost the taxpayers more money to support low-income individuals.
Raising the minimum wage can lower unemployment. Individuals with higher wages can increase tax revenues. An increase in the minimum wage also benefits employers as well in the long run. The retention rate is high, and they don’t have to deal with high turnover. This means that employers don’t have to spend a lot on training and can focus on increasing profit. When pay is low employees tend to seek additional employment or simply seek employers that are willing to pay them more. When the minimum wage is low, workers tend to seek a better-paying job in other companies. When workers stay in a job for a longer period, it can reduce businesses’ turnover rates and reduce training and hiring costs as mentioned previously. As a result, it is beneficial to both the employers and employees to increase the minimum wage.
An additional benefit of raising the minimum wage includes allowing people to have more savings. This can assist them in home purchasing, which is a major problem in cosmopolitan cities. Currently, many people from working-class backgrounds would share housing with multiple roommates to lower the cost. By raising the minimum wage, it can solve this problem. When people have more savings, they will likely purchase more goods. As a result, this can also be beneficial for the country’s economy. “This can increase production as demand goes up which will then increase the gross domestic product (GDP). “When a country’s GDP is high it means that the country is increasing the amount of production that is taking place in the economy and the citizens have a higher income and hence are spending more” (Hunter).
According to the Congressional Budget Office (CBO), raising the minimum wage can bring many people out of poverty. They stated that a minimum wage hike to $10.10 can raise average family income below the poverty line by 2.8 percent. In addition, it can also reduce the number of people living in poverty by 900,000. Although some people would lose their jobs because a rise in the minimum wage can cause employers to demand lest labor. The overall benefits of raising the minimum wage would outweigh the cost.
In conclusion, raising the minimum wage would reward those coming from working-class backgrounds. It allows them to make ends meet and lower their financial burden. It would afford them access to an advanced education, which will be beneficial to their financial success and possible to secure generational wealth. It will help employers to increase profits and the economy. An increase in the minimum wage improves the quality of life and society as a whole. It is said that as of January of 2019, the New York State minimum wage will increase to $15.00 an hour; based on research this is a great decision for all stakeholders involved.