Positive and Negative Effects of Minimum Wage on People
A. Attention Getter: Imagine this: You’re a single parent working a full-time minimum wage job, or multiple minimum wage jobs, and still are living paycheck to paycheck if you make enough to even provide for your family. Would minimum wage rising make this better? Or would there be a domino effect of higher prices?
B. Reason to Listen: Millions of people across the country are living paycheck to paycheck off of minimum wage. Everyone’s first reaction to this is usually raise minimum wage.
However, many don’t know the positives and negatives of raising minimum wage.
C. Thesis Statement: Raising minimum wage has a range of positive and negative effects on people, businesses, and the government.
D. Credibility Statement:
1. I have done extensive research on the topic of raising minimum wage.
E. Preview of Main Points:
- First, I will tell you about the effects of raising minimum wage on people.
- Second, I will explain how raising minimum wage affects businesses.
- Lastly, I will discuss the effects of raising minimum wage on the government.
II. Raising minimum wage would solve all of our problems, right? Not exactly.
A. First, I will start with some background on raising minimum wage.
- Not everyone even makes minimum wage.
a. According to the US Department of Labor, about 1.8 million workers earned at or below the federal minimum wage of $7.25/hour in 2017 (Background of the Issue, 2018).
a. This could include tipped employees as well.
- There are multiple movements to raise minimum wage.
a. First, the Fair Minimum Wage Act of 2007 raised the federal minimum wage to $7.25/hour (Background of the Issue, 2018).
b. Other big efforts are the Harkin-Miller proposal to raise the wage to $10.10 and the Living Wage Movement to raise the wage to $15 (Background of the Issue, 2018).
B. Minimum wage will affect everyone in the workforce.
- A positive effect would be reducing poverty.
a. Studies by U.S. government while creating the Harkin-Miller proposal suggest that a raise in minimum wage could move almost a million families out of poverty (18 Crucial Pros and Cons of Raising Minimum Wage).
- Another positive effect would be more spending money.
a. According to Liana Fox, Senior Analyst at the Economic Policy Institute, increasing minimum wage would increase our spending money because it would match purchasing power to inflation (Minimum Wage, 2018).
- A negative effect would be replacement of jobs.
a. Oxford researchers Carl Benedikt Frey and Michael Osborne stated in a 2013 study that robots are already doing many simple service tasks. Many restaurants are already working on taking humans out of the picture for cost purposes (Minimum Wage, 2018).
Transition: Now that we’ve established some positive and negative effects of raising minimum wage on people, I will explain how raising minimum wage affects businesses.
C. Raising minimum wage would encourage offshoring.
- Offshoring is sending jobs to other countries for cheaper labor.
- From a business perspective, offshoring would be saving a lot of money on labor but it negatively affects people and the government domestically (18 Crucial Pros and Cons of Raising Minimum Wage).
D. Increasing minimum wage would decrease employee turnover and increase worker productivity.
- According to Alan Manning, Professor of Economics at the London School of Economics, As the minimum wage rises and work becomes more attractive, labor turnover rates tend to decline. (Minimum Wage, 2018).
Transition: Now that I’ve explained how raising minimum wage can affect businesses, I will describe how it affects the government.
E. The government can tax more when more is made.
- According to a report by David Cooper of the Economic Policy Institute, finds that raising the federal minimum wage would reduce public spending (Raising Minimum Wage Would Reduce Public Spending, 2016).
F. Minimum wage increasing would also increase the GDP (gross domestic product) of the country, meaning the country would be more productive and making more money based on this.
G. Increasing federal minimum wage too quickly can cause inflation.
- When minimum wage is raised too quickly it can cause inflation, which would have the adverse effect of getting people out of poverty. Everything would cost more if it was raised too quickly (How Does the Minimum Wage Impact the Economy, 2017).
- This is why most acts to raise minimum wage have a time span to raise it.
III. A. Review of Main Points:
- Today, I spoke about how raising minimum wage impacts people, businesses, and the government.
B. Restate Thesis: Raising minimum wage has a range of positive and negative effects on people, businesses, and the government.
C. Closure: Next time you think about wanting to raise minimum wage, think of all of the positive and negative effects it has on everyone.