Minimum Wage At The United States - 1129 Words

In the summer of 2014, legislature intended to raise the current minimum wage floor of $7.25 in the United States stalled in Congress. As the November election approaches, many Democratic senate members are placing the issue of minimum wage at the forefront of their election campaigns, hoping to sway working-class voters in their favor. The issue of minimum wage has become a matter of politics, politics which far overshadow the far more pertinent concern of minimum wage’s economic effects. Minimum wage is a complex issue, and understanding both the benefits and harms associated with minimum wage is critical to making an informed political decision, a decision hopefully substantiated by economics. One of the most convincing arguments†¦show more content†¦Moreover, in order to efficiently grow supply, companies must hire more workers, creating more jobs. Naturally, the people who fill these jobs will earn money that they too will put back into the economy via spending. This cyclical pattern is known as the multiplier effect, an effect which causes unfathomably rapid growth of the economy. Without minimum wage, however, low-income workers would likely earn less money and therefore stimulate the economy less. Without consistent consumer spending, businesses and jobs alike fall by the wayside, two components of the economy which catalyze economic growth. Thus, without minimum wage, the economy threatens turbulence and even collapse. Moreover, an effective minimum wage decreases the income gap, a prominent issue in capitalistic economies. Though the income gap is unfortunately ignored on a national level, the impending culmination of a growing disparity between the rich and the poor promises to be devastating. The World Economic Forum, an independent Swiss organization comprised of business leaders, heads of government, and other influential titles, states, â€Å"a chronic gap between rich and poor is yawning wider, posing the biggest single risk to the world in 2014, even as economies in many countries start to recover†¦Ã¢â‚¬  (Hirschler). A leading trigger for the income gap’s growth is inadequate compensation for labor. Statistics from the Economic Policy Institute reveal that since 1948, net productivity in the United States has