What are some different ways that raising minimum wage can negatively affect the economy (opinions welcome)?

Question

I am writing a persuasive paper, taking a stand against raising the minimum wage rate. I would like to hear some opinions/facts from both standpoints. Pros and cons, if you will. Thanks!

Answer 1

We have to keep in mind that payroll taxes and workers comp insurance are based on wages, so it isn't just the salaries that increase but also all the associated costs of an employee. Raising the minimum wage to a level that small employers cannot afford encourages employers to hire 'under the table' (including hiring more undocumented workers, thereby diverting jobs from our citizens). This deprives our government of necessary funding by way of employment taxes and deprives the employee of the benefits of being a true employee. It also affects the employee in his retirement years, because he will not be earning points to receive social security if he is not being legally reported as an employe.

Answer 2

By constantly raising minimum wages, a government can make it so that labor costs increase to a point that it is more profitable to move operations overseas to another country with less expensive labor costs. Thereby costing people jobs, which negatively influences a local economy.

Example: Take a look at where everything in your house is made. I will bet that over 95% of the durable goods in your house/apartment are made overseas.

Answer 3

It may create more jobs, but would drive all wages down (beyond just those with minimum wage jobs)....and those jobs created would be of little value (to those that have them, for society, and as it concerns the government). Prices may decrease a tad....but would likely not be significant.

Answer 4

They will just raise the prices of things we need or want after they raise the wages.