Sengphanlaya 1

Taylor Sengphanlaya
Professor Collins
ENGL 1302
24 July 2016

The Harms of Increasing Minimum Wage

Wages are defined as payments meant to reimburse individuals for their time and work
spent on manufacturing materials and labor. According to Funk and Wagnalls New World
Encyclopedia An industrious and skilled worker who produces a more valuable output than
workers of lesser capabilities is worth more to an employer and usually is paid more. Earnings
have a variety of averages based on the overall cost of business, value of products, profits of
each company, the employers, or the occupation. According to Victor Devinatz, a distinguished
professor in the Department of Management and Quantitative Methods, minimum wage was
meant to provide workers the basic necessities for a stable, livable environment, and protect their
welfare (The Significance). Currently in the United States, minimum wage is at seven dollars
and twenty five cents (Devinatz). According to Leah Cayson, who has a Bachelor in Arts of
Journalism & Political Science, News-Editorial, and Public relations, the most recent minimum
wage increase happened in 2007 by George W. Bush. It increased from five dollars and fifteen
cents to seven dollars and twenty five cents (Majority: Raise). The salary of minimum wage
estimates around fifteen thousand dollars, but the required salary for a single worker household
estimates about thirty thousand dollars (Devinatz). Minimum wage should not be expanded any
further because it will harm the people and the businesses well-being through economic and
financial means.

Sengphanlaya 2
Raising minimum wage affects the rates of unemployment and poverty, prices of goods,
and the citizens welfare. Increasing minimum wage illustrates as beneficial to the people,
because it provides more money to go towards their basic necessities, but also affects the
standards of living. Minimum wage is based on the ability to live off of ones salary, and
covering their living expenses. If a person makes seven dollars and twenty five cents an hour,
works forty hours a week, for fifty two weeks, their salary would estimate fifteen thousand a
year. (Devinatz). In order for a person to survive they would have to make at least thirty
thousand dollars a year, but working minimum wage does not prove adequate enough without
government assistance. Businesses closing, workers laid off, unequal opportunities for entry
level jobs, and companies outsourcing will elevate unemployment rates (Should The). Cayson
states that an adequate amount of money is required to be spent to prevent companies from
laying off, outsourcing, or replacing their staff (Majority: Raise). Instead of benefitting from
the increased wages, some workers may be laid off, causing them not have a source of income
and expand poverty rates. Should The states The higher prices are, the smaller the quantities
of goods and services demanded and the number of workers employed in producing them (qtd. in
Reisman). If the business decides to raise prices rather than firing employees, they may lose
profits because the prices will exceed the demand. Expanding minimum wage could lead to
cutting hours of the employees, firing them, or not hiring qualified people for the job (Cayson).
Another effect of increasing minimum wage would prevent teenagers and young adults from
gaining entry level jobs (Should The). Companies barely consider hiring teenagers or young
adults for minimum wage jobs, because of their lack of skills. If hourly wage increases it will
causes more doubt for hiring a young worker, especially without any skills or experience, and
prevent any employment. Increasing minimum wage would entice high schoolers to drop out and

Sengphanlaya 3
work, rather than striving for a better education to receive a better paying career (Should The).
When adolescents perceive that they can receive a higher pay without completing any education
they feel less inclined to finish school. Teenagers fail to realize in the future the significance of
having a degree to receive a high paying career. Raising minimum wage harms the people
because it prevents the improvement of the standards of living, prevents them from gaining or
maintaining employment, and causes difficulty in providing for themselves and their families.
Extending the minimum wage affects business through different factors: closures, prices
of goods produced, and their economic impact on the community. In order for businesses to
maintain overhead cost, profits, and keep up with an increased minimum wage they would have
to lay off employees. Costs of increased minimum wage will damage nearly all of small
businesses or franchise owners, this has closed a few Wal-Mart stores, causing hundreds even
thousands of employees to be fired (Should The). This will result in closing certain chains of
already established or newly established business, and preventing new ones from opening. The
heightened wage will make citizens jobless, affect the economy, and the local towns
unemployment rate. At the same time the prices of manufactured goods will rise, causing the
standards of living throughout the town to elevate as well; causing people to relocate to a more
affordable area and providing less revenue to flow through the town. In areas of lower cost of
living standards, like Mississippi, raising minimum wage would change people from poverty
level to median range. Compared to areas of higher cost of living standard, i.e. Hawaii, raising
minimum wage would not be much of assistance (Should The). Depending on the area,
businesses may have to increase their prices especially if located in an area with higher standards
of living. This may fail to cover the costs to pay for a higher minimum wage because the price is
higher than the demand resulting in the inability for people to afford goods. This may also result

Sengphanlaya 4
in businesses not having an adequate amount of revenue to continue and causing them to shut
down. The Federal minimum wage created by the government disrupts the balance of the
market and prohibits the creation of new jobs (qtd. in Bylund). The government created wages
rather than the countrys market. It is more beneficial for the wages to be determined by the
worth of work being produced. Allowing the employers to appoint the required amount of people
at salaries that are appropriate and beneficial to the businesses and employees. Raising minimum
wage negatively affects businesses through costs, employment, profits, and goods which
prevents them from flourishing to help maintain a stable market.
The benefits to raising minimum wage may include increasing economic activity and
stimulate job growth, reducing poverty, and reduce the reliance on government welfare.
According to Should The the increase of minimum wage will increase economic activity and
spur job growth. It may increase economic activity and job growth, but will require an increase
and constant amount of money spending in order to keep up with increased salaries. Someone
working full time at minimum wage their salary would be about fifteen grand a year, while
someone who lives in poverty has a salary around twelve thousand dollars (Should The). If
minimum wage increased to nine dollars or ten dollars and ten cents an hour the average salary
would estimate around of eighteen thousand to twenty one thousand dollars. While increasing
minimum wage to nine or ten dollars will help citizens out of poverty it will not be an adequate
amount that is necessary to survive, which is an annually salary of about thirty thousand dollars.
Should The states that If low-income workers earned more money, their dependence on, and
eligibility for, government benefits would decrease. Even though raising minimum wage should
reduce reliance of government assistance, certain people may take advantage of this system.

Sengphanlaya 5
Extending the federal minimum wage would not be beneficial to the citizens and their
businesses, because it will affect their welfares monetary and commerce. A raised minimum
wage affects citizens employment, ability to obtain commodities, and debt. Business shut
downs, increased values of manufactured merchandise, and/or financial affected town can be the
result of a raised minimum wage. Expanding minimum wage may positively change the peoples
welfare through financial, economic, and ability to gain commodities, but may have unseen
negative side effects or requirements.

Sengphanlaya 6
Annotated Works Cited
Cayson, Leah. "Majority: Raise minimum wage." Decatur Daily, The (AL) 18 Nov.
2013: Newspaper Source. Web. 12 July 2016.
This article has factual data that supports how much minimum wage impacts the citizens
of the United States. Provides Gallup poll, expert opinion, and personal recounts of a
business owner and an entry level worker. Provides the pros and cons of raising
minimum wage through financial means.
Devinatz, Victor. "The Significance Of The Living Wage For US Workers In The Early Twenty
First Century." Employee Responsibilities & Rights Journal 25.2 (2013): 125-134.
Business Source Complete. Web. 12 July 2016.
Devinatz describes the history of minimum wage over the past forty years. Illustrates the
living situation how minimum wages is versus living wage. Explains the economic
effects living wage and minimum wage has on the people of the United States.
"Should the Federal Minimum Wage Be Increased?" ProConorg Headlines. N.p., n.d. Web. 12
July 2016.
This article describes the various pros and cons of raising minimum wage. It describes
how it affects people, businesses, and the government. This article provides expert
opinions about the different aspects minimum wage will affect the nation.
"Wages." Funk & Wagnalls New World Encyclopedia (2016): 1p. 1. Funk & Wagnalls New
World Encyclopedia. Web. 12 July 2016.
This encyclopedia entry explains the theories of how wages were created and
implemented. Describes the determining influences that creates wages. Describes the
history of wages: how they were created, who created them, and why they were created.