Raising the Minimum Wage Will Reduce Poverty

Government has had a strong place in lifting people out of the poverty line ever since the great depression era. The federal government set a minimum wage law called the Fair Labor Standards Act in 1938. The minimum wage was made for the purpose to create a minimum standard of living to protect the health and well-being of employees. Fast-forwarding 80 years later the minimum wage grew from $.25 an hour to currently $7.25 an hour. Currently, 29 states and the District of Columbia have a higher minimum wage than the federal rate which is due to such a demand for increasing minimum wage. Although the rising minimum wage has benefited the country in many ways, people and businesses have been very opposed of it.

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There are many benefits to increasing the federal minimum wage. Many arguments are that the federal minimum wage is far too low to keep working families out of poverty. According to a study in 2017 by the U.S Government Accountability Office, the minimum wage is leaving millions of families in the U.S in poverty. 20% of families working at the federal minimum wage, 13% of families working up to $12 per hour and 5% of families with a worker working for up to $16 an hour are living on or below the poverty line. This is a common argument often brought up by many people, and a reason many states have increased their minimum wage.

Although there are many supporters of raising the minimum wage there are equally as many that oppose it too, especially from businesses. It is important for many businesses to run efficiently and labor might be their biggest costly factor. Opponents often mention that many businesses cannot afford to pay their workers a higher compensation because of the amount of lay-off that would be created. This would lead to an increase in unemployment, which would not only negatively affect our businesses, but our economy. Businesses may be forced to close, lay off workers, reduce hiring and make the hiring process a bit more competitive. It is said that raising the minimum wage would especially hurt low-income communities and teenage workers since businesses may not be willing to pay little or no experienced workers with a higher wage.

Unemployment has become a constant battle the government has been combating since the great depression. The U.S since learned that our economy runs in a cycle, from great times to recessions. Due to our economic climate, unemployment rates always seem to fluctuate. Our economists have always pondered and studied where the countries jobs are going. Outsourcing has played a big role in the loss of jobs in our country since wage and benefits are often protected and increased, leaving companies to find cheaper alternatives. The 14 million outsourced jobs are almost double the 7.5 million unemployed Americans. Countries like china and Mexico often don’t offer work protections and minimum wages so many most companies take advantage of those opportunities. Outsourcing has forced our country to become a more competitive one on a global marketplace scale. Our American job-seeking employees aren’t willing to work for such a lower wage, and companies aren’t willing to compensate them for it so unemployment increases.

Another problem that’s hard to tackle is that if we force restrictions on our country, like when president Trump has suggested to renegotiate NAFTA and add tariffs, this only raises prices and increase costs of all consumers which might be an inefficient strategy for the long run. A compelling strategy for many economists is to re-focus one of our biggest industries into a different direction, and that is from fossil fuels to renewable energy.

Renewable energy is a fast-growing industry that shows promise in bringing jobs into this country. This renewable energy industry includes solar panels, wind turbines, hydropower plants and more. Renewable industry a much more labor-intensive industry than its counterpart like oil. This industry is in demand for work from all types of skilled and unskilled labor like sales teams, project developers, technicians, and more.

Our government focusing their efforts to replace non-renewable energy with renewable energy would create more than three times as many jobs as producing an equivalent amount of electricity from fossil fuels, according to a study by The Union of Concerned Scientists in 2009. This can also bring more stability to energy prices, which would be a good long-term strategy that our federal government should take in consideration. In 2016, the solar industry alone employed more than 260,000 people, including jobs in the installation, manufacturing, and sales sectors, a 25% increase from 2015. The hydroelectric power industry employed approximately 66,000 people, and the geothermal industry employed 5,800 people in 2017.

In contrast, the entire coal industry employed only a mere 160,000 people in 2016 according to the U.S department of energy. The renewable energy industry might as well be called an employment generator considering how much it has advanced in expansion and how much of an influence it’s had on employment. Thousands of Part-time and Full-time positions are waiting for job seeking individuals as the industry expands, so government should further focus their efforts away from fossil fuels and into alternatives like renewable energy.

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Raising the Minimum Wage Will Reduce Poverty. (2022, Jan 29). Retrieved October 5, 2022 , from
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