President Obama proposes raising the national federal minimum wage from 7.25 percent to 10.10 percent to fill the gap of income inequality. Obama wants to give America a raise. He said, “That too many Americans are working just to get by. Some are not working at all.” He wants to speed economic growth by putting more money into the pockets of the low-income families. He wants to help them get out of poverty by raising the federal minimum wage and pegging it to inflation. The President believes that this solution will help big businesses in the long run by decreasing employee training cost and cutting back on high turnovers. In contrary, Obama will hurt the people he is trying to help.
“This proposal will only harm the people the President wants to help, especially teens, who have already endured more than four years of 20+percent unemployment,” Saltman said. “If the President wants to boost the economy and have an impact on the country’s unemployment rate, he needs to lower barriers to hiring, not raise them.”
The minimum wage class is mostly made up of teenagers and young adults. These people are usually people with low skills and have little or no experience. Some of them are first time job seekers just starting out in the work force. Most of us at some point in our lives have started out working a minimum wage job. Why? We need the minimum wage jobs to help us gain the experience we need to climb the success ladder for a higher paying job. They are stepping stone jobs. Minimum wage jobs were not intended to support a family. They were created to help get our foot in the door. No one wants to stay at a minimum wage job forever. In fact, it gives us motivation to want to get a higher paying job later on in life.
What class of people or earning minimum wage? Only 2.9 percent of wage earners earn the federal minimum wage. Most minimum-wage earners are teenagers or young adults, not head of families. Over half of minimum-wage earners are between the ages of 16 and 24. Two-thirds work part-time defined as less than 35 hours a week. The average family income of a minimum-wage worker is 53,000 per year, less than the national average of 79,500 a year but well above the poverty level. Two-thirds of minimum-wage workers live in families with income above 150 percent of the poverty line. Just four percent of minimum-wage workers are single parents working full-time, compared to 5.6 percent of all U.S. workers.
When people are asking the question where the jobs are? Why would we want to make it harder for small employers to hire people? Instead, Boehner said, the focus should be on policies to get people to enter the workforce. What happens when you take the rungs away on the economic ladder, you make it harder for people to get on the ladder, Boehner said. Our goal is to get people on the ladder and help them climb that ladder so they can live the American dream.” Boehner told reporters at a Capitol Hill news conference Tuesday that a unilateral increase in the minimum wage is bad policy that will cost low-income Americans their jobs. Raising the minimum wage does not increase the value of the worker’s labor. It increases the cost of the worker’s labor. And as everyone knows, the more something costs, the less of it we buy.
How does it benefit an Employer by raising the minimum wage?
By tradition, the federal minimum wage gets hiked nominally every few years by Congress. The more significant piece of Obama’s proposal is to link the minimum wage to a cost-of-living adjustment, guaranteeing that it rises with inflation over time.