What Raising the Minimum Wage Would Mean for the Economy

By Andrew Friedrick

8/6/2020

The raising of the U.S. minimum wage has been widely advocated for by socialists. Everyone likes the idea of receiving more money for the same amount of work, but would that actually work in practice? Bernie Sanders has proposed raising the minimum wage to an astronomical $15 an hour. What effects would this have on the economy? 


In a Forbes article, Jack Kelly explains what drastically raising the minimum wage would entail. "Employers, especially small family and midsize businesses, will be disproportionately hurt by the extra costs incurred. The local neighborhood stores and businesses with razor-thin profits will be forced to raise prices to make up for the additional labor costs. With the increased prices, customers may elect to take their business elsewhere. Losing customers means losing income, which could result in the business having to layoff workers," Kelly explains. 1


Put simply, raising the minimum wage will, in turn, harm businesses as they have to use a majority of their profits to pay their employees. Business owners will also have to raise their prices in order to keep up with increased labor costs, which would push away regular or new customers. Kelly explains how employees that receive $15 an hour will actually experience a loss in income as business owners will have to cut their hours to keep up with labor costs. "Seattle's move to $15 an hour, a few years ago, resulted in workers given fewer hours and experiencing a net loss in pay," Kelly says. Even with the example of Seattle's failed minimum wage experiment, the idea of a high minimum wage is still appealing to many individuals. 2


Bernie Sanders made it his goal to make it seem like receiving average minimum wage pay is, in fact, very unfair. In a Tweet posted by Sanders on July 18, 2019, he states that "There's nothing 'extreme' about raising the minimum wage to $15 an hour." 3

Based on the proven negative implications this would have on both employers and employees, the belief that raising the minimum wage will have positive outcomes is very extreme and would be detrimental to the economy if practiced. 


About Andrew

Twitter: @keep_our_rights

Instagram: @keep_our_rights

Andrew Friedrick was born and raised in Jacksonville, Florida. He will be attending the University of North Florida in the fall. He loves all things related to sports, enjoys the outdoors, and is passionate about politics.

#Socialism #America #Capitalism

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