Question

Should the federal government raise the minimum wage? Discuss pros and cons

Answer 1

Pros of minimum wage

Minimum wage has not kept up with inflation. Increasing minimum wage keeps us with inflation.

More money in the hands of people, increases spending and boosts the economy.

Minimum wage increase would reduce gender-based and race-based inequality as minimum wage applies to all workers

When workers earn more wages, they rely less on government ‘safety-net’ programs.

More revenue will be generated to the government through payroll taxes.

Cons of minimum wage

Employers may halt recruitment and lay off existing workers.

Employers may bring in more automation to save labor costs.

Outsourcing to othercountries where the minimum wage is lower.

Prices may increase as the additional labor cost will be added to the cost of production.