Synthesis

Minimum wage rests solely on the idea of opportunity costs, or in other words, something has to give. You can’t raise the minimum wage and keep all of your employees, and you can’t get a job easily because less people are hiring. The debate on minimum wage is about which is more important, the people or the business.

If we were to raise the minimum wage, small businesses would take the hardest hit and it wouldn’t be worth. If the government forced a new, higher minimum wage, small businesses wouldn’t be guaranteed financial stability. This means that they can fire some employees and pay some more, move out of area and likely lose business, or take a loss and go out of business completely. In blog post #2 I said “firing employees would decrease the company's productivity and overall output, while the demand of their products/services would remain constant”, which means the businesses overall profit would decrease and could lead to the demise of said business. Large businesses on the other hand probably would take the minimum wage increase hit lightly or at least lighter than small businesses. Large businesses typically have a larger profit annually and can afford to pay employees a little more, but some would still be laid off. Similarly blog post #5 argued who the minimum wage most serves and why it shouldn’t be raised. It turns out that “most people in poverty don’t have minimum wage jobs, and most people that have minimum wage jobs aren’t in poverty”. This means that the majority of the people in poverty aren’t doing anything to help themselves get out, so many of them don’t have even a part time job or work at all. It is possible to work your way above the poverty line by having any type of job, including minimum wage. Majority of minimum wage workers aren’t the sole breadwinners for their household and have other income because many of these workers are teens and college students. In other words it is not worth it to raise the minimum wage because it would harm businesses and overall economic growth, only to help a very small percent of people who are in poverty that do hold a minimum wage job.

There is another way to help those in poverty, this is the Earned Income Tax Credit (EITC) which gives people that don’t make enough money a break. Blog post #4 argues “EITC will in fact ‘reduced current poverty and inequality in at least two ways (1) by supplementing the wages of low-paid poor or near-poor workers; and (2) by encouraging work’”, which I believe will hold true. In order to receive the benefits of the EITC, you must have a job, and knowing that you’ll get to keep more of your money can be motivation for people. Similarly, blog post #3 argues that raising the minimum wage “‘raises the incentive for companies to outsource labor to countries where minimum wage rates are lower’”. This means that higher wages lead to even less jobs because large businesses can afford to outsource their labor. With higher wages there is more competition for less jobs and less motivation for work.