Will increasing the US minimum wage really affect poverty?

Question

So the United States Senate voted overwhelmingly today to raise the minimum wage in the US for the first time in a decade. Will this have any impact on poverty, like Sen. Ted Kennedy says it will? (Interesting aside: where I live, even someone earning twice the minimum wage would find it hard to support themselves..so I still think people are gonna be hurtin...)

Answer 1

Consider the effects of raising the minimum wage to $50 per hour. That would make everyone would be rich, right? Of course not. Artificially increasing the minimum wage does not help alleviate poverty because the amount of production provided by minimum wage workers remains the same.

In fact, the least skilled workers are hurt the most because the market rate for their skills would be below the minimum wage. Business owners, especially those who earn small profit margins in their line of business, would likely pass more work onto their existing employees instead of hiring new ones.

Another possible outcome is an increase in the price of goods or services they sell. Since all U.S. employers must abide by federal wage laws, this could happen as well. Of course, that would make the U.S. less competitive in the world market.

As is the case with many government laws and mandates, raising the minimum wage - although a well intentioned idea - would likely do more harm than good.

Answer 2

No. It will hurt the economy in that prices will go up and everyones money will buy less. They could raise minimum wage to $50 and hour and it would still not help. Why well the price of gas would go up to $25 a Gallon, and Gallon of milk would run around 35 and loaf of bread at about $10. Any time there is a vote in the House and Senate that is over 80% know that the politicians are doing a feel good excersize to convince everyone they made the right choice in the last election. It is political grandstanding at its very worst!

And what would that snotty little rich kid Ted Kennedy now about poverty. He is the biggest Hypocrite in the World.

Answer 3

Nope, not a bit. For starters, minimum wage is made by .6% of the US workforce. An increase will result in a price hike in all goods and services, so everyone will be spending more for the same thing, including minimum wage earners. Some business will close down whenthe hike gets signed into law. A raise in minumum wage will also do nothing to make sneaking into America any less enticing either, will it?
More important than any of this. America is based on a free market. Any move the gov't makes into business is another step in destroying a free market. Should that happen, we become more and more like western Eurpoe, and I shudder at the thought.

Answer 4

People just don't seem to understand that raising the minimum wage benefits no one, it sounds good in theory. The cost of living increases as a result to keep up with the inflated wage. It's better to get an education/job skills and promotions. That actually makes a difference not raising the minimum wage.

Answer 5

Earning the minimum wage is never going get someone over the poverty line, even if they work 40 hrs. a week. It will help people, in the short term.

Long term, it's simply a catalyst for the rest of the economy to raise prices, especially in areas where the poor are concerned. Gas, food, lodging, taxes and other costs will always continue to rise.

If you're making minimum wage now, you'll feel better about your finances for a few months, then you'll realize you're really no better off than you were before.

.... also, the idea that small businesses will lay off massive numbers of employees is bunk. The business passes on to the consumer the cost of having to pay employees a higher salary.

Answer 6

its as simple as this: you are an employer, you now have to pay your workers more money per hour. How do you make up that money? answer: by doing the only three things you CAN do
1. lay off some of your work staff
2. cut down on labor which means cutting work hours scheduled
3. By raising the prices of whatever goods or services you provide

I guarantee you will see fast food prices increase across the nation and in many other areas of commerce where minimum wage is paid.

Answer 7

Yes and no. It'll increase the wages of the people who have jobs but the jobs have to be aquireable to begin with. A major thng about poverty is the jobs not being aquireable to those who need them, a.k.a. the felon, the single mother, the homeless, etc. Increasing the minimum wage will help some of the poor but admittedly not most. As I said-- the jobs have to be attainable in the first place.

Answer 8

I wish someone could really answer this question. I believe that those on minimum wage are young entry-level employees for the most part. They don't stay at minimum very long.

If we at least had some idea of who is actually collecting minimum wage, we might better understand whether a raise is good or bad for the economy. It is mostly good for those who earn minimum wage now as long as it does not destroy the viability of their employer.

I have not hired new employees for less than $8.50 per hour for years. EVen then, I understand that they must move up in pay or they will move on to some job that does pay better.

Answer 9

People are still going to be in bad shape. As a matter of fact, many employers may have to lay off some minimum wage employees because they cannot afford the higher payroll.

Answer 10

in my area, wages are low. although raising min. wage looks good at the first glance, it has deep effects. higher wages, when its all boiled down, just add to the rate of inflation by driving prices that consumers have to pay skyward. along with higher prices comes more sales tax earned. It also means fewer jobs. Less people expected to do more. Basically, someone has to pay for it. the reason the government wants to raise min. wage is because they make more taxes of of you, the american worker, for their wallets. also, a slight increase in wage to many will throw them above the maximum income to recieve government assistance- also in their benefit. so, its basically another way to try to make you feel good being a slave to the american government.