Research Paper. Impact of Mandatory Minimum Wage of $15 on Employment

Impact of Mandatory Minimum Wage of $15 on Employment
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Impact of Mandatory Minimum Wage of $15 on Employment
The topic of minimum wage has been debated for a while, and some states in the United States are already considering enacting policies that make it mandatory. Policy makers have often believed that minimum wage will alleviate poverty and increase the local economy while at the same time the national level experiencing the spillovers of these advantages. On the other hand, economists and business owners have taken a different view of this policy. They argue that a mandatory minimum wage of say $15 is likely to attract and cause long-term adverse impacts on employment, the local economy, and a spillover of these adverse effects to the national level. This paper takes the second view of the impact of minimum wages on the employment and economy at large by analyzing Newman’s article (2018) and supporting the arguments raised in the article with similar points of view from Millsap (2018). Mandatory minimum wages of $15 do not help the intended poor, but instead locks them out of employment opportunities, hence increasing poverty.
Employment is the backbone of different economies at the state level and the national level in the U.S. Proponents of raising the minimum wage argue that making it mandatory at $15 will alleviate suffering for low-skilled people, eliminate wage inequality for minority group, and significantly push for an economic boom in the short-term and the long-run. According to Newman (2018), the push for raising minimum wage is politically motivated, considering that many workers would wish to earn enough money for them to enjoy financial freedom. When people are earning higher wages, it implies that there will be enough money in circulation, allowing people to save and invest in different alternative businesses. This could translate to employees becoming employers and eventually translating to economic growth.
In spite of the convincing argument of the proponents of an increase in minimum wages, economics have posed significant arguments backed with evidence to refute the claim that higher minimum wages help the poor and minimize inequality. According to Newman (2018), employers are the implementers of the policy and will respond accordingly to make sure that policy makers do not interfere with the profit margins of the firm. As a result, it is important to analyze the impact of mandatory minimum wage of $15 from the employers’ point of view and how their response to the policy will affect employment and the economy at large. This view is essentially important as it helps masses and thousands of low-skilled and semi-skilled determine the essence of raising minimum wages and whether it has their interests at heart.
Mandatory minimum wage of $15 implies that the empl...