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Should the Federal Minimum Wage Be Increased?

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Featured Media Resource: VIDEO: Do You Understand the Minimum Wage Debate? (Citizen Tools)
View a non-partisan explanation of the history and current status of the minimum wage debate.

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Learn More about Raising the Minimum Wage

The federal minimum wage is currently $7.25 per hour. Many people believe that it should be substantially higher and others believe that increasing it would harm small businesses and the economy.

According to Heather Boushey, Executive Director and Chief Economist at the Washington Center for Equitable Growth, raising the minimum wage is an important anti-poverty measure. A person earning the current minimum wage and working a 40-hour week makes $15,080 per year, which is barely above the poverty line for a single adult and is well below it for someone supporting children. The most recent proposal to increase the federal minimum wage would  have raised it to $10.10 per hour, though it didn’t pass. More than half of the states (including the District of Columbia) already have higher minimum wages than the federal minimum wage. The District of Columbia is currently the highest at $10.50/hour. There has been discussion lately about increasing the federal minimum wage to $15 per hour, which would bring a family relying on a single wage-earner above the poverty line.

[media-credit standalone=0 name="United States Department of Labor" link="http://www.dol.gov/whd/minwage/america.htm" align="aligncenter" width="800"]Minimum wage laws in the states as of January 1, 2016[/media-credit]
Minimum wage laws in the states as of January 1, 2016

Some sources cite growing income inequality and the shrinking middle class as a reason to raise the minimum wage. The Pew Research Center defines a household as “middle-income” if it earns between 67 and 200 percent of the state’s median income, and for many years America was a predominantly middle-class nation. But by 2015, only about half of adult Americans were living in middle-income households, with 29% below that and 21% above. Income inequality adversely affects life expectancy. According to the Department of Health and Human Services, in the 1980s, wealthy Americans lived 2.8 years longer than the poor, but by the 1990s, when the income gap had widened, the rich were living 4.5 years longer than the poor. Income also plays a significant role in a person’s education, and vice versa. Simply put, the higher the education level, the higher the income. In 2009, people with professional degrees earned, on average, more than six times as much as people who did not graduate from high school: $128,000 versus $20,000. With the cost of higher education continuing to rise, a college degree is out of reach for many people from low-income families, making the gap even worse.


[media-credit name="401kcalculator.org" link="http://www.401kcalculator.org/" align="alignright" width="400"]Piggy Bank[/media-credit]

Those on the other side of this debate believe that raising the minimum wage would hurt small businesses, which would not be able to pay their employees. Businesses might even have to close, and employees would lose their jobs. There would be fewer job opportunities because businesses would be doing as much hiring. So, while employees who kept their jobs would be making more money, unemployment would rise. Raising minimum wage could also cause inflation, since business owners would have to make up for increased labor costs by raising prices. Therefore, the cost of living would increase, and the value of the new minimum wage would decrease.

Do you support increasing the federal minimum wage? Why or why not?

More Resources

Article: ProCon.org
Should the Federal Minimum Wage Be Increased?
This article provides background information on the history of the minimum wage and discusses current arguments for and against increasing it.

Article: Washington Center for Equitable Growth
Understanding How Raising the Federal Minimum Wage Affects Income Inequality and Economic Growth
This article is the testimony of the executive director and chief economist of the Washington Cto the U.S. Senate Committee on Health, Education, Labor, and Pensions in favor of a higher minimum wage.

Video: WSJ Video
Opinion Journal: Why Wage Hikes Increase Poverty
A senior fellow at the Manhattan Institute explains why he thinks increasing the federal minimum wage will hurt lower-income Americans.

Video: London School of Economics and Political Science
Designing a Minimum Wage to Reduce Poverty and Wage Inequality
A senior fellow at the Manhattan Institute explains why he thinks increasing the federal minimum wage will hurt lower-income Americans.

Article: New York Times
How the $15 Minimum Wage Went from Laughable to Viable
Read a recent history of the minimum wage debate.

Video: PBS NewsHour
Is a $15 Minimum Wage a Boon or a Risk for Low-Paid Workers?
California and New York have recently approved increases in the minimum wage to $15 per hour over the next few years. Hear a discussion about the potential consequences.

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This post was written by Samuel Baker, Annaleigh Benoit, Koran Dunbar and Elizabeth Jones-Thomas, students at Pennsylvania State University, Mont Alto.

KQED Do Now U is a bi-weekly activity in collaboration with SENCER. SENCER is a community of transformation that consists of educators and administrators in the higher and informal education sectors. SENCER aims to create an intelligent, educated, and empowered citizenry through advancing knowledge in the STEM fields and beyond. SENCER courses show students the direct connections between subject content and the real world issues they care about, and invite students to use these connections to solve today’s most pressing problems.

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