Should our government raise the minimum wage?

There has been a long debate over how much the government should intervene in our economy.  Sometimes the public finds it appropriate for their intervention and sometimes not so much.  Should the government impose price controls on services and goods? It is beneficial sometimes but what about the topic of raising minimum wage? Should government make a law on raising minimum wage since the wage set right now isn't enough for a family of four?  What if new businesses can't afford to pay their employees more? These questions and other doubts will be discussed about later on, but first we should understand the economic process of setting an accurate minimum wage for the public. 

A suitable average rate of minimum wage can be calculated through knowing the supply and demand of the labor workforce.  Government should calculate the supply of how much people can work and how much demand there is for them to work.  Based on these numbers in a supply and demand graph, there would be an equilibrium price on the point where they meet.  This point would represent a price where there wouldn't be more workers than necessary (surplus) or a lack of workers (shortage). Potential problems in raising the minimum wage could offset the balance of workers in the laborforce.  Any price below the equilibrium point will result in a shortage: a lack of workers.  Any price above the equilibrium point wil result in a surplus: excessive number workers.  Check out the diagram so you can have a better idea.

 With the conclusion of these facts I can support my opinion that government should not raise minimum wage as it will produce a surplus of workers if many want to get paid higher but in the long-run might also cause a shortage of workers if some get fired becasue of paying employees higher.


Finding this perfect wage price is very difficult and that's why the minimum wage rate that is now set in place is not really suitable for everyone around the country.  This brings me back to my first question of concern.  Should the government raise the minimum wage?  What are the effects of raising minimum wage and what potential problems could arise from this. 

My opinion is that government should not interfere in  raising the minimum wage and just let us take care of business. The  negative consequences of raising minimum wage are the following: small business owners will struggle, there will be a loss of jobs, and there will be a decreased incentive for the public to get higher education and live better. 

If minimum wage were to get higher then owners of small businesses will see an increase in operating costs and a decrease in profit.  Most of the businesses that will be affected will be restaurants who have 60% of minimum wage earners in the country.  If the minimum wage were raised then the restaurant owner would have to take negative actions to make up the difference in his lost profits.  A survey done by Golden Gate Restaurant reported that " ninety-eight percent of the restaurants raised prices, and eighty-nine percent raised prices significantly".  This can help prove that raising minimum wage has a huge impact on consumers as well.  The public will be paying for the losses of businesses in paying their over-paid waiters and employees.  On top of that non tipped employees like the ones who work in the kitchen will be getting paid the minimum wage again to make up for the business losses instead of getting paid a lot more as they originally were. 
Other businesses instead of raising prices might just cut back on employees.  According to the Journal of Economic Perspectives, advocates of the minimum wage knew perfectly well that it would lead to job losses.  Out of only the restaurants, fifty-four percent of them reduced the number of employees and ninety-one percent reported lower profits.  This means that it is mot likely that small businesses or restaurants will resort to laying off their employees to save money and will make them work harder to make up for the loss of employees.  This could evoke a bad treatment of minimum wage earners and cause high dissatisfaction for them.  The point of  raising minimum wage is for a better life for employees but what if the raise actually causes them to get fired?
My last point in supporting non-government intervention is our wages is that if employees start making higher profits than before, then they will be motivated to stay at their jobs and not be compelled to continue studying and to earn more in the future.  This can cause a future decline in the standard of living for families of minimum wage workers.  More than half of the minimum wage earners are under 25 and more than quarter are 16 to 19.  This age range is for students which means that they will be less motivated to study and get degrees if they get paid a lot more in their minimum wage jobs.  The incentive to work harder and go up the social ladder will dramatically decrease everywhere. 
We should be against all these future complications and not support government in raising minimum wage as it will lead to more problems than benefits to society.

Glossary:
price controls- Government intervention in markets in which legal restrictions are placed on the prices charged
supply- the total amount of a good or service available for purchase
demand- the total amount of a good or service that people are willing to buy
equilibrium price- price where supply and demand meet
shortage- lack of product due to demand exceeding supply
surplus- excess product due to supply exceeding demand

Citations:

Sarkar, Pia."Restaurants feel pain of wage law." The SFGate. Accessed December 30, 2012. http://articles.sfgate.com/2003-11-06/bay-area/17518239_1_minimum-wage-wage-increase-workers-compensation-costs.

"Minimum wage ACORN roots." Washington Times . Accessed December 30, 2012.

http://www.washingtontimes.com/news/2006/jan/3/20060103-093213-4084r/.

Apathetic Voter. "Raising the Minimum Wage – What Are the Consequences?." Accessed December 30, 2012. http://www.apatheticvoter.com/Newsletter_Articles/RaisingMinimumWage.htm.