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Will Raising the Minimum Wage Help Unemployment?
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When the Minimum Wage was introduced, millions of people were delighted. Those in the service, retail, farming and mining industries were particularly pleased as they were amongst the lowest paid in the US. When you are on a low wage, a rise of just a few cents per hour can make such a difference.

The Minimum Wage has risen steadily since then, and now stands between approximately $5 and $9 per hour. The rate varies dramatically from state to state and there are some states that do not have a Minimum Wage at all.

There has been lots of debate recently around raising the Minimum Wage. President Obama has suggested that he would like the federal Minimum Wage to be increased to $10.10 per hour. This has opened up all sorts of discussions about the pros and cons of an increase.


  • • Increasing the hourly rate to this level encourages people to make positive changes in their lives. Perhaps they will be able to give up their second job, allowing them to spend time with their family. Perhaps they can buy a car or even afford to take a vacation.• This in turn puts money back into the economy, freeing up and producing more jobs for those who are unemployed.• Many businesses believe that the larger economic forces were the most important aspect. Therefore, whilst raising the Minimum Wage may prevent some employers from taking on more employees, you will find that Minimum Wage jobs such as those in the service industry in restaurants, stores and motels have seen a boom in those areas where the Minimum Wage is higher, particularly where there is no sales tax.

    • The knock on effect from this is to force other businesses to raise their wages in order to attract staff. Of course, people will go where the money is to make a living.


    • When employers have to raise the wages for their employees, a knock on effect is often a rise in prices for the customers.
    • Employees often have to work even harder for their money. When paying higher Minimum Wage, employers may not be able to afford so many staff. So, for example, a server in a restaurant may have to cover the washing up as well, as the employer will not be able to afford to fill that position.
    • Even if the number of jobs is not reduced, often the hours are. Full time jobs may become part time. Everything becomes a trade off.

  • Conclusion

    The introduction of the Minimum Wage has made millions of US citizens’ lives much better, allowing them to have a better standard of living. However, conversely, it has also made lives much harder for employers, as their staff costs have gone up, meaning they have to up their prices and maybe cut down on the number of staff they employ. So upping the Minimum Wage is a double-edged sword. It really depends which side of the fence you are sitting on.

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