The $15 per Hour Minimum Wage: Good or Bad for the U.S. Economy?

Answer

The $15 per Hour Minimum Wage: Good or Bad for the U.S. Economy?

The federal minimum wage was instituted in 1938 to assist in ensuring that all employees would fairly be compensated and that regular jobs would give decent quality of life. Nonetheless, since the 1960s, the U.S. lawmakers have constantly let the minimum wage value to get eroded, permitting inflation to slowly minimize American’s purchasing power of a minimum earning. This gradual fall in people’s buying power implies low-income employees have to work for longer hours to attain the living standard that would be regarded the bare minimum about 50 years ago. Thus in January 16, 2019 Senator Bernie Sanders and Rep. Bobby Scott announced that they would launch the Raise the Wage Act of 2019, a bill which would be aimed at raising the federal minimum wage to $15 per hour by the year 2024 so that Americans’ purchasing power would be increased. The amended version of the bill was passed by the U.S. House of Representatives. Various views have been advanced regarding the future effect of the $15 minimum wage bill and how it will affect Americans and the U.S. economy as a whole. It is against this backdrop that this paper discusses the lengths and breadths of the bill with focus on how many people in America would be affected, how the bill would affect them, and how the bill would affect the U.S. economy as a whole.

Raising the U.S. minimum wage to $15 per hour would impact several people of different classes in various ways. While different studies have revealed different statistics, more studies have established that about 40 million Americans would benefit from the new minimum wage bill, including about 24 million full-time employees, 23 million females, 11.4 million parents, 5.5 million single parents, and about 15 million children. The 40 million Americans would be affected variedly by the wage bill by 2025. Raising U.S. minimum wage bill would affect the U.S. economy since it would erode the worth of real minimum wage that primarily started in the 1980s. Slowly raising the minimum wage to would directly increase the wages of about 28 million American workers, hinting that workers who work throughout a year would receive a minimum of $3,900 rise in their yearly wage income. Another 12 million workers would equally benefit from a spillover impact as workers raise wages of employees making at least $15 so that they entice and retain workers. During the phase-in period of the rises, the increasing wage would produce about $120 billion extra wages, which would ultimately ripple out to households of the employees as well as their communities. Since lower-paid employees expend much of their additional incomes, this wage influx would assist in stimulating the U.S. economy and spur greater commercial activities and employment growth.

Worth adding is that employees who would receive a pay rise will largely be adult workers. The average employee’s age that would be affected is 35 years. A greater proportion of employees aged at least 55 years would receive 14.6% relative to teens (9.3%). More than 50% of all American employees who would be affected are aged between 25 and 54. Notwithstanding the fact that men account for a greater proportion of U.S. overall labour force, the majority of Americans who would be impacted by the rise are women (57.9%). The $15 minimum wage rise would inexplicably raise incomes for people of colour. For instance, black employees constitute 11.8% of U.S. workforce but accounts for 16.9% of the impacted employees. This disproportionate effects implies that greater proportions of Hispanic and black employees would be impacted: 33.4% Hispanic employees and 38.1% black employees would receive the rise. Of employees who would receive a rise, 60% work full-time, 44% have at least some college experience, and 28.3% have children. About 38.9% of single parents would get higher earning and a total of 5.5 million single parents would realize benefits from the rise.

Similarly, employees with households who would benefit from the $15 per hour wage are the primary breadwinners in their families, earning averagely 52% of their families’ total income. The rise would disproportionately assist those Americans in poverty or those close to it. About 63.4% of America’s working poor population would get a pay rise if the $15 per hour minimum wage. Additionally, the wage bill would increase wages of parents of more than 14.5 million American children. The rise would also start reversing decades of growing income inequality between the middle and lowest-paid classes of workers. 

Undoubtedly, this paper would recommend the $15 per hour minimum wage bill since research also confirms the benefits associated with a rise in workers’ minimum wage in an economy. Some pessimists of the rise reason that a rise in a minimum wage would result in reduction of obs. Nonetheless, modest rises in an economy’s minimum wage have in no wise led to significant and detectable job losses. From former raises of the U.S. per hour minimum wages, studies have shown that America has exhibited raised incomes for employees and closed ethnic pay gaps with no significant effect on job openings. This is because a rise in an economy’s minimum wage benefits an economy’s low-income employees and their households by increasing their incomes, closing income and poverty inequality.

From the foregoing, it can be concluded that the $15 minimum wage is good and plausible for the U.S. entire economy. Presently, low-wage employees earn less dollars per hour compared to their colleagues did about half a century ago. However, since the U.S. economy has grown and workers are generating more income hourly and doubling the country’s productivity from the last 50 years, the country deserves to pay the workers better. Additionally, it is evident that the benefit of the wag rise far much outweigh its costs.