What’s The Economic Impact Of A High Minimum Wage?

0
97

More political debates are raging across the country right now than ever before in modern American history, with racial, social, and economic issues often taking the center stage. These days, chatter about raising the minimum wage has grown more noticeable than in living memory, with many American cities and localities experimenting with increasing the minimum wage in an effort to bolster the wellbeing of workers everywhere.

What’s the economic impact of a high minimum wage, and how have cities which foster such high rates fared since they implemented their new policies? It’s becoming increasingly obvious that, as most economists believe, steadily increasing the minimum wage is essential towards economic vibrancy.

Success stories abound

The most notable aspect of a high minimum wage across the United States is that success stories abound when it comes to paying workers more; with real wages having largely remained stagnant for decades, those localities which opted to increase how much workers were paid mostly saw economic progress instead of economic retreat. While employers and certain moneyed interest groups have long fought against raising the minimum wage because it would cost them personally, it’s growing increasingly indisputable that high minimum wage rates benefit everyday workers and contribute to broad economic growth.

Most of those who once argued that the city of Seattle’s efforts to raise the minimum wage would backfire have since turned around and admitted they were wrong, for instance. As extensive reporting from the New York Times illustrates, “large stacks of academic papers have shown that, for the average worker, a minimum-wage increase does more good in raising pay than it hurts by prompting some employers to cut back on hiring or hours.” This should come as little surprise; after all, there are many more workers in the United States than there are employers, and paying everyday laborers their fair share of profits has historically driven growth and economic well being across the board.

While many people will continue to debate the pros and cons of raising the minimum wage for years to come, most economists and policy makers have aligned on the issue, and believe that championing better wages for workers is the way to go. Nevertheless, it’s still worth diving into this complicated issue even further, as simple “yes it’s good” or “no it’s bad” answers seldom carry enough gravitas to convince everyday people.

Some workers benefit more than others

It’s growing more obvious, for instance, that some workers benefit more than others when the minimum wage is suddenly raised. Workers who are on the clock more often than others benefit more when the minimum wage is high, for instance; in other words, those low-income earners who work longer hours and more frequently than others will benefit more than low-income earners who don’t work as many days of the week or for as many hours. The inverse can be troubling, however; when the minimum wage is high, those who are unemployed and have been for some time may have a harder time finding a job, as companies are less likely to hire new recruits when their existing workers cost more to keep on board.

Workers who lack formal education, training, or extensive work experience may find it difficult to find employment when the minimum wage is high, but those who are already hard at work will almost certainly take home more pay at the end of the day. Some cities are better than others when it comes to the minimum wage, too, so it’s worth considering regional factors when it comes to determining the overall economic impact of this policy. Some cities can be so ludicrously expensive that they’re prohibitively costly to live in for poor workers, for example, even if they’re being paid a higher minimum wage.

With a presidential election coming up, we’re doubtlessly going to be inundated with claims from both sides of the political aisle about raising the minimum wage. Rather than discussing hard economic data or relying on extensive studies, presidential candidates are likely to summon anecdotes and make impassioned emotional pleas in the midst of their election, so it’s imperative to keep a clear mind when it comes to debating this issue. It’s almost indisputably true that certain workers benefit more than others from a high minimum wage, however, so don’t be surprised if emotions run high as people debate their future livelihoods.

When it comes to temporary employees like part-time workers or those who have been out of the workforce for many years, a higher minimum wage could make it harder to find a job. For most others, however, especially those who work often and frequently for low wages, bolstering the minimum wage produces great economic benefits and contributes towards long-term economic growth. For good or for ill, efforts to raise the minimum wage to a higher figure will doubtlessly continue for years to come.

LEAVE A REPLY

Please enter your comment!
Please enter your name here