Why Minimum Wage Should not be Increased and Better Solutions Found Essay

The issue of minimum wage in the USA has been a critical one even to the point of being one for the most important debates in the US congress. The arguments that have been bright forward are those that are for and against. Interestingly, both sides of the debate do seem to have viable points. However, this is an issue that must be addressed in a serious way. The only problem with increasing the minimum wage is the fact that this is a blanket decision and covers all kinds of employers from the biggest multinationals to the smallest startups. Minimum wage should not be increased because this will main that small business, which are said to play a very crucial role in the USA economy will be affected negatively and this will have a negative impact on the economy. As Hasset and Strain (Para 15) say, it is “….because it will make it more expensive for businesses to hire young and low-skill workers at a time of crisis-level unemployment”. The truth is that the minimum wage is a problem in the USA. With big corporations such as Wal-Mart and McDonalds taking advantage of the minimum wage to take advantage of their employees despite the fact that these companies can afford to pay better salaries, there is a need to consider this issue. However, the solution is not to increase the minimum wage for all employers, but to address the issue with much more wisdom.

However, there are experts who do not see this is this way. For instance, Cassidy (Para 2) argues that he minimum wages must be raised because of two major factors. First the inflation rates have increased over the years while the minimum wages have remained constant. This means that the workers are getting lower pay than can meet their daily needs because the inflation has reduced the value of the dollars. While the minimum wage does not increase as fast as the inflation rate reduces the value for the dollar, the firms that sell products and services to the consumers increase the prices of their products as soon as the inflation rate has reached a significant level to affect their bottom-line. Secondly, he shows that the American minimum wage is so much lower in comparison to the other first world nations like those in Europe and in Australia. However, what people like Cassidy do not realize that that there are more complicates issues when it comes with macroeconomics. This has been addressed by (Finnegan Para 5). Finnegan (Para 3) argues that increasing the minimum wage is not necessarily a poverty panacea and that those who think that this will solve everything are wrong on all counts. He argues that the issue of minimum wage is a complex issue and dealing with it requires knowledge of how macroeconomics works. In a nutshell, what the he is arguing is that the minimum wage should not be seen as the solution to all American economic problems.

Brenberg (Para 3) supports what Finnegan says. He argues that if the minimum wage is increased, the implication to the economy will be far worse than having low minimum wages. He argues that that the younger people are the ones to suffer the most because if the minimum wage is raised, this will mean that the businesses will stop hiring and since the young people are the ones without the work, they will have to stay jobless. Eventually, everybody will be affected negatively because an economy with high numbers of unemployment ends up having a negative impact on everybody. This is very true especially with regard to how small businesses which make a majority of the employers in the USA are going to be affected.

Hasset and Strain (Para 4) on the other hand have the same argument as Brenberg. They say that giving in on the pressure to raising the minimum wage will mean that most businesses can not be able to legally hire more people. Their argument is that the money has to come from somewhere and that business cannot make a loss while funding too high wages. If the workers have to be paid higher, the firms would have to incase the cost of their products to the consumers. Because this is not viable and would interfere with their market strategy, the more viable way to deal with this would be to lay off some employees and to refrain from hiring more workers. The same people demanding doe higher minimum wages would be the ones to suffer the most.

Surowiecki (Para 3) however brings another angle to the debate. His argument is hinged on three undeniable facts. First, the inflation rates have exceeded the rate at which the minimum wages have grown. Secondly, the minimum wages of today are even lower than those of the past years such as 1968, when adjusted to inflation and thirdly, the job market of today have changed. It is this third argument that is most convincing and compelling. He argues that while in past years low wage jobs were for young people and married women who were looking for part time jobs, today’s low pay jobs are taken up by people who have familial engagements and so the minimum wage they get only leads to poverty. Surowiecki is one of those people who look at macroeconomics from a linear point of view and assumes that as long as people can be paid higher wages, this will solve everything. This is however misguided because of two major issues. First, there is the issue of the fact that every action in the macroeconomics environment leads to a reaction. Increased wages can led to higher priced products leading to same problem or even more serious issues in the economy. Secondly, it would meant that the smaller businesses would be affected more drastically by higher minimum wage than the bigger business an this would manifest itself in a negative way in the economy.


With regard to the factor of minimum wage, there is no one solution that can be said to be effective. Increasing the minimum wage is definitely a far worse solution. While it is necessary to have a way to compel well established businesses to pay better wages and provide stable employment to their workers, this should not be applied to small businesses and the small businesses and startups. Minimum wages should not however be increased bit a better solution shroud be found.

Works Cited

Brenberg, Brian. There's no shame in starting at the bottom. 16 January 2014. 05 March 2015 .

Cassidy, John. The Minimum-Wage Debate in Charts. 14 February 2013. 05 March 2015 .

Finnegan, William. Demonizing the Minimum Wage. 14 September 2014. 05 March 2015 .

Hasset, Kevin and Michael Strain. The minimum-wage debate. 10 March 2013. 05 February 2015 .

Surowiecki, James. The Pay Is Too Damn Low. 12 August 2013. 05 March 2015 .