Introduction: The minimum wage has been a growing issue in recent decades, ever since many individuals in our nation began to question its effectiveness as a strategy to reduce poverty. To determine the validity of using the minimum wage policy, you need to understand why this policy was originally initiated and put into place. Background: This policy was originally established as a way to help reduce poverty rates in the United States and help low-income people meet their basic needs and be able to enjoy certain segments of their day to stay healthy. health and far from exhaustion. Poverty is defined as “a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living” (Chen, n.d.). Thesis Statement: Therefore, to determine whether raising the minimum wage is an effective strategy, we will need to analyze its effectiveness in improving the lives of low-income individuals and families and its ability to reduce the level of poverty. Many opponents of this policy have highlighted their concern that raising minimum wages will increase the unemployment rate, which is a major determinant of the economy's health. This article will analyze several studies and articles that examine both the arguments for and against on the topic of raising the minimum wage and its various effects on improving or worsening our economy. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Topic Sentence: Many studies have been conducted to demonstrate that raising the minimum wage is not necessarily an effective method of reducing poverty, but rather can also negatively impact the health of the economy as a whole. Evidence and Citations: Drs. John P. Formby, John A. Bishop, and Hoseong Kim conducted a study collecting data to correlate raising the minimum wage to improvements in the lives of low-income families and found no correlation between raising the minimum wage and the monetary benefit in the population targeted by this policy (Fomby, Bishop and Kim). The study argues that since most low-income families have members who do not work or have a low-wage worker, this presents a fallacy in the effectiveness of this policy, as it only improves workers' conditions (Fomby, Bishop, Kim). Comment: They supported their claim by noting that “more than 85 percent of low-income families saw no direct monetary benefit from each of three 70-cent wage increases” (Fomby et al.); thus, this study highlights a major problem with the proposed minimum wage increase policy, as it fails to target the individuals it was originally intended to benefit. This was further supported by a study by economists Joseph Sabia of San Diego State University and Robert Nelsen of the University of Georgia, which found that 54.7% of poor and less educated people between the ages of 16 and 64 are not working . Additionally, 53.6% of those who have missed rent or mortgage payments do not hold any job positions (Sabia & Nielson, n.d.). Their study also revealed that approximately 87% of those who actually benefited from the 40% increase were earning an income that is more than double the poverty level and living in homes, and that a third of them were also earning an income three times higher than the poverty level. threshold(Sabia & Nielson, n.d.). Also, Michael Saltsman, Research Fellow atThe Employment Policies Institute (EPI), a nonprofit research organization that studies unemployment policies and issues, found that $9.80 workers who will benefit from the minimum wage increase are already earning $50,662 a year. , which is well above the poverty line of 15,080 per year(Saltsman, n.d.). These studies, in support of the findings, highlight a serious misunderstanding about increasing the minimum wage, as they reveal that this policy would not contribute to increasing the level of poverty and financial conditions of the intended population, as it lacks those who are below or to the poverty level, as most of them do not even hold any job positions. Topic Sentence: Additionally, the EPI found that raising the minimum wage would increase the level of unemployment, which would make the economy worse. Evidence and Citations: EPI studies have highlighted that raising minimum wages would lead to 467,500 job losses and that “Taking into account the smaller post-recession workforce, job losses in the range 256,200 to 768,600 are based on previously found results. economic literature” (Saltsman, n.d.), which demonstrates that these results are based on historical and literary references, which further support their correctness. Raising the minimum wage would also make teens less employed, as according to the Bureau of Labor Statistics, nearly 50% of those earning the minimum wage are under 25; therefore, increasing the minimum wage would make employees less willing to hire teenagers as it would require time and money for training, which would increase the labor costs that employees have to pay; therefore, they will reduce the number of workers and get fewer but already trained people (Saltsman, n.d.). To further support the negative effects of raising the minimum wage, a survey of the country's labor economists found that 73% of these economists support the position that raising the minimum wage would increase unemployment levels (“There is an economic consensus in favor of wage mandates?', n.d.). This highlights another major negative effect of raising the minimum wage, as it will lead to the loss of many jobs and increased unemployment rates, which would significantly affect the health of the economy and the stability of many families and communities . Topic Sentence: Opponents of Minimum Wage Increase Increasing the Earned Income Tax Credit (EITC) and decreasing the Federal Insurance Contribution Act (FICA) tax would be more effective in reducing poverty levels in states United (Formby et al., n.d.). Evidence and Citations: The EPI study found that 1.95 million people living below 150% of the poverty level would escape poverty if an EITC growth policy were implemented, and that 1.65 million would they would come out with a deduction in the FICA. The authors of the EPI study state that “In other words, 2.5 times more Americans would escape poverty with an expansion of the EITC than with the FMWA” (Formby et al., n.d.). This was also demonstrated in another study by EPI economists Joseph Sabia and Robert Nielsen, who found that “Every 1% increase in a state supplement to the federal EITC reduces poverty rates by 1%.” (Sabia & Nielson, n.d.). Comment: This provides an alternative approach that many studies have shown is more effective than raising the minimum wage and avoids the economic problems and risks associated with raising it. Topic Sentence: Having looked at the potential downsides of the minimum wage and the opinions of its opponents, we will now look atthe opinions of its supporters and their evidence. Evidence and quotes: Jack Jenkins, of the Center for American Progress, says there are more than 10 million people living at wages below the poverty level and that a majority of Americans believe that even when low-income workers work extremely hard, they still can't do it. ensure a sustainable living wage, due to low wages (Jenkins, 2013). According to a 2013 Hart Research Associates poll (Jenkins, 2013), 80% of Americans favor raising the minimum wage and adjusting it for inflation so it can support low-income families. Comment: Jenkins' findings reveal that since the minimum wage was last increased from $5.15 to $7.25 in 2007, its value in 2013 is worth $2 less, further indicating the need for raise the minimum wage to improve the financial stability of low-income homes in America, from now on, inflation is leading them to have to endure many worsening conditions in order to support their basic needs. Although many argue that most low-income workers are teenagers, which should make the current minimum wage sustainable for them, this is actually not true, since 70% of fast food workers are adults and have over 20 years old, and 1 in 7. 4 have and raise children (Jenkins, 2013). Topic sentence: To counter the argument of minimum wage increase opponents that raising the minimum wage would have negative impacts on the economy, supporters of this policy raise the concern that because these low-wage -income individuals they are unable to support themselves and depend on government assistance programs that are costly to the economy. Evidence and Citations: Studies show that $1.7 million is spent each year, just at one Walmart Supercenter, on public benefits including food stamps, child care subsidies, and reduced-cost school breakfasts and lunches ( Jenkins, 2013). Comment: Another study by the Chicago Federal Reserve found that if the minimum wage were increased from $7.25 to $9 an hour, annual household spending would increase by $48 billion and more than 30 million would benefit from the increase wage, and 23.3% of children would have a parent benefiting from the minimum wage increase (Jenkins, 2013). This shows that lower incomes increase government spending on assistance programs, and if the minimum income were increased, the government would be able to invest in this money, instead of spending it on these programs, and therefore this would have a great advantage and would allow the economy to recover. advantage as it reduces public spending and increases demand for company products. Topic Sentence: While many opponents argue that raising the minimum wage would increase the unemployment rate, many studies have shown that there is no correlation between higher minimum wages and lower employment rates (Jenkins, 2013). Furthermore, it has been shown that increasing the minimum wage would increase productivity and demand for new workers, since there is greater demand for the products that businesses produce, because incomes increase and families are able to afford more goods and services than before (Jenkins, 2013). States that have a higher minimum wage tend to experience greater job growth, and studies show that an increase in the minimum income would result in raising billions of dollars in retail revenue (Jenkins, 2013). Additionally, T. William Lester, David Madland, and Jackie Odum conducted a study to examine the effects of raising the minimum wage on rates.