To answer this, we need to first go through some facts and figures before jumping to solution. Recently US President, Barack Obama announced to increase the minimum wage to $10.10 per hour for workers–in three steps- in 2014, in 2015, and 2016.. This news definitely is a overwhelming for some, but there are others who thinks that increasing a wage could directly impact and results into reduce of total employment rate in United States. Whereas a study on minimum wage, which was published at the University of Massachusetts, University of North Carolina, and University of California, in November 2010 by economists worked extensively and compared employment data and wages between 1990 and 2006, and interestingly found that minimum wage rises did not cost jobs.
The federal minimum wage in United States, was signed into law in 1938 by President Franklin Roosevelt, when the country was at the high grief and great depression. It was a setup made for America’s workers to keep them out of poverty and increase purchasing power of consumers to stimulate the economy.
Like the idea behind, this federal minimum wages helped country and its people in effective way, resulting in lower poverty rate in country. But due to recent rise and inflation in economy, the current wage of $7.25 does not cover basic necessities of life.
In recent years, we have witnessed a major inequality in income among unskilled workers and other Wall Street executives or skilled servicemen, where one earns one thousand times more than what someone on minimum wage earns. It is true that such a major differences cannot be curbed in but definitely a wages that can support one to survive happily is required at this point of time. As far as loss of jobs are concerned, many economist believes that a rise in minimum wages, would help businesses to shape up. This way managers or authorities would find ways to make their workers or employees more productive and skillful. It can also decrease turnover as more employees would be happy with their paychecks. So it’s not false if we say whenever minimum wage rises, it forces businesses to get thinner as well as fitter.
As far as increase in consumable goods or services are concerned, definitively it rises along with rise in wages. This elevated purchasing power across the board ultimately helps stimulate the economy and finally benefits small businesses. The right indexing of minimum wages in each year undoubtedly keep pace with the increasing cost of living. Many states like – Florida, Arizona, Colorado, Montana, Vermont, Nevada, Missouri, Oregon, Ohio and Washington have adopted this best practice.
So at last, in my opinion it is good to raise the federal minimum wage.