Among the disadvantages of increasing the minimum wage is the probable consequence of businesses increasing prices, thus fueling inflation. Opponents argue that raising the minimum wage would likely result in wages and salaries increasing across the board, thereby substantially increasing operating expenses for companies that would then increase the prices of products and services to cover their increased labor costs.
Increased prices mean a general increase in the cost of living that could essentially negate any advantage gained by workers having more dollars in their pockets. Though the current federal minimum wage in the U. Another projected problem resulting from an increased minimum wage is that of potential job losses. Many economists and business executives who point out that labor is a major cost of doing business argue that businesses will be forced to cut jobs to maintain profitability.
The numbers could be substantially higher if companies made a major move toward outsourcing more jobs to less expensive labor markets outside the country. One potentially negative impact that is less readily apparent is the possibility that a higher minimum wage would result in increased labor market competition for minimum wage jobs.
The net outcome of an increased minimum wage might be a large number of overqualified workers taking minimum wage positions that would ordinarily go to young or otherwise inexperienced workers. This could impede younger, less experienced entrants to the job market from obtaining work and gaining experience to move their careers forward. Increasing the minimum wage is expected to lift individuals out of poverty and improve work ethic, however, it also comes with many possible negative implications, such as inflation and a loss of jobs.
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Measure content performance. Develop and improve products. List of Partners vendors. George L. Wehby, Dhaval M. See related work on Minimum wage Tipped Minimum Wage. See related work on Minimum wage and Tipped Minimum Wage. This fact sheet was updated February 19 with a new section on tipped workers. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, — Search for:.
Just as the minimum wage can be an important tool for reducing inequality among women, increases in the minimum wage have led to large reductions in earnings inequality between black and white workers.
The same research cited earlier by Derenoncourt and Montialoux found that the increases and coverage expansions of the late s were responsible for more than 20 percent of the fall in the black—white income gap during the Civil Rights Era.
Minimum wages have long been an effective tool for maintaining adequate pay, but the failure to adequately raise the federal minimum wage has denied American workers significant improvements in their standard of living. As a result, the lowest-wage workers today earn significantly less than what their counterparts did five decades ago, after adjusting for inflation. In addition, by automatically indexing future minimum wage increases to median wage growth, low-wage workers will share a common trajectory of wage growth with the broader labor market.
Finally, gradually phasing out the separate lower wage for tipped workers will help to eliminate disparities in labor protections between tipped workers and the rest of the labor force. See Paul J. Wolfson and Dale T. Areas here refer to all counties and metro areas. In November , the employed share of the teenage population was David H. Autor, Alan Manning, and Christopher L. See more work by Ben Zipperer. Download PDF Press release. The bulk of recent economic research on the minimum wage, as well as the best scholarship, establishes that prior increases have had little to no negative consequences and instead have meaningfully raised the pay of the low-wage workforce.
Minimum wage workers, and low-wage workers generally, are mostly adults and are also disproportionately women and people of color. We can afford to pay the lowest-paid workers more than they were paid 50 years ago Raising the national minimum wage is well overdue. Real federal min. Chart Data Download data The data below can be saved or copied directly into Excel. The data underlying the figure. Share on Facebook Tweet this chart.
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