Pros and Cons of Increasing Minimum Wage

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ECO 202
Part One: Pros and Cons of Increasing Minimum Wage
The United States is a popular destination for many individuals particularly from developing and under-developed nations because of abundance of employment opportunities. That as it may, the country’s minimum wage has for a significant period remained quite low compared to other developed regions. Latest efforts in 2019 to increase the minimum wage to $15 dollars proved futile as the proposed legislation was floored in the senate. Nonetheless, the US government is contemplating increasing the minimum wage to $25 per hour to ensure a living wage for all workers in the region. The initiative has its pros and cons in equal measure.
To begin with, increasing the minimum wage to $25 per hour will improve the standard of living of all workers. Gindling (2019) reaffirms the above position and shares that “A 2019 Congressional Budget Office (CBO) report projected significant standard of living benefits for at least 17 million people, assuming a minimum hourly wage of $15 by 2025, including an estimated 1.3 million people being elevated above the poverty line” (p.5). The cost of living in the US is increasing drastically and a raise of the minimum wage will assist workers to afford the rising costs of commodities and services (Miller p.34). Secondly, the move will aid to reduce income inequality and consequently unite the different races in the region. Thirdly, raising the minimum wage will reduce government expenditure on financial aid for the disadvantaged in society. Currently, the US government spends a substantial amount of money providing basic services such as health care and education to person’s whose incomes are insufficient to meet these needs. Fourthly, the initiative will motivate employees and fuel them to become extra productive.
Conversely, raising the minimum wage will increase labor costs. Labor is one of the largest cost for most businesses in the US and is the number one reason why some companies are forced to employ few workers to perform different roles. As such, once the government forces firms to pay their workers more, there are high chances that many workers will be let go. Secondly, it will also force companies to outsource their jobs in regions without such restrictions....