Against Raising Minimum Wage People everywhere are voicing out that we need to increase minimum wage, again. They say that an increase will have a minor impact on jobs but there are no facts to back them up. The impact of raising minimum wage has been studied since the beginning, and has been concluded that raising minimum wage hurts the poor, and helps the rich. Raising minimum wage takes away jobs; especially the low-skilled and young worker, keeps people on welfare, and also encourages high school students to drop out. When you look at the facts, is it really worth raising minimum wage?
All credible research has come to the same conclusions, and these I will discuss with you. Poverty will rise When minimum wage is raised, businesses have to raise the price on whatever products or services they offer, to offset the loss of profits from having to pay the employees more money. With products more expensive, consumers will not be able to afford to buy as much as they normally would, and businesses will start to go under; causing a huge loss of jobs. Small businesses will start going out of business first, and will eventually lead to bigger businesses.
Take Visteon for example, in Connersville, Indiana. Visteon was one of the biggest employers around this area. 900 plus jobs were lost when Visteon went out of business. I’m sure several of you in here know someone that has been lost their job from Visteon. Luckily, they were able to draw unemployment, but that is only a portion of what they normally got paid. I personally know quite a few people who decided to go to college after being laid off of Visteon, in hopes of having a better future. Even the pensions that Visteon is paying out, is very poor compared to what the employees should have gotten.
Most of you can understand just how badly Visteon going out of business affected us in Eastern Indiana. Everywhere you go these days, you see for sale signs and out of business signs on business and houses, and very few help wanted signs. Here is a short list of businesses and brands going out of business around 2011. First one is Reader’s Digest. This is the most widely read magazine in the world, and has been around for quite awhile, but they have recently filed bankruptcy and are going out of business. Next is Blockbuster. Blockbuster was the national leading video rental business for 20 years.
They are hoping to keep their internet business alive, but their 6,000 stores are closing. Say you have an estimate of 30 people working per store, that is 18,000 jobs lost right there, just through Blockbuster. Dollar Thrifty Automotive Group is going out of business because they can’t compete with Hertz and Avis Budget car rental companies. Hertz and Avis Budget are currently fighting to buy Dollar Thrifty, so hopefully no lost jobs there. T-mobile, a U. S. mobile wireless provider is also going out of business. They are rated number four, in the American market for cellular providers.
Moody’s Cooperation, which is an investor service, is well over 100 years old, and going out of business. There is talk that BP will go out of business after the loss they suffered over the Gulf of Mexico Oil Spill. So far that’s just speculation, but also a good possibility. They lost quite a bit of credibility over the oil spill incident. Zale’s Corporation, which is one of the earliest jewelry retailers in the U. S. They were also one of the first to let you buy items on credit. RadioShack is one of the oldest retailers in the U. S.
There is speculation that Best buy is trying to buy them out, so hopefully there won’t be any jobs lost there. Merrill Lynch, which is a full-service broker in the U. S. , is going out of business. And last but not least is KIA Motors Corporation. They are also going out of business in 2011. These are just a few of the businesses that are going out of business. There are several more. Now back to why we shouldn’t raise minimum wage. With raising minimum wage, and the jobs lost, more people will be on unemployment. Eventually unemployment benefits will start dwindling down because the economy just can’t afford it.
There will be millions of people without jobs, some without homes, and their family, and some will be living in homeless shelters. And a lot more will be living on the streets, because there aren’t many jobs out there and there will be even less jobs in the future, unless we put a stop to raising minimum wage. Ten years ago the minimum wage rose from 4. 25 to 5. 15, and almost 100,000 jobs were lost. Minimum wage right now is 7. 25, but come in 2011; they might be raising it to 9. 50 per hour. If there were that many lost jobs ten years ago for raising minimum wage, imagine just how bad it will be this time… Prices will Increase
From a supply and demand perspective, prices on products will rise, and the demand for the product goes down, leaving a surplus of products. When you’re struggling with the way things are now, how will you survive when they raise the prices on everything? They have to raise the prices to afford to pay their employees when minimum wage is raised. Raising the minimum wage will cause price inflation, which is the rise in the general level of prices on goods and services in an economy over a period of time, as businesses try to compensate by raising the prices of the goods being sold.
Negative effects of inflation is that the real value of money and other monetary items will go down, uncertainty about the future discourages people from investing and saving. This overall reduces productivity rates, as the capital required to help companies will be more expensive. The lower the rates of inflation, the better off we are. Taxes are continuing to get higher; they are predicted to double before this decade is over. We already know gas prices are going to rise again. With all the loss of jobs and lack of money, our economy is in pretty bad decline, and it’s just getting worse. Psychological and Crime
With the high levels of unemployment, people are feeling like they have lost control of their future and their self confidence lowers. People start becoming depressed; normally within the first 6 month of being unemployed, and their symptoms just continue to get worse. As mind blowing as it sounds, suicide is on the rise with the unemployment rates, and the state of the economy. People are losing their jobs, homes, possessions and even their families. You really don’t know how bad it can get, till you have lost everything. When people have no hope and emotions are high, they make drastic decisions without thinking.
Decisions like suicide, theft, burglary, battery, and to the extreme with murder. When things get bad enough, people start hoarding and fight over food and supplies. The bad thing with unemployment depression is that most of those people don’t have insurance and can’t afford to get insurance. Without insurance to go to the doctor and get help, depression symptoms just get worse. I am completely against raising the minimum wage. A lot of this information came from Joint Economic Committee reports over 10 years ago. After 10 years, look at how bad the economy is now compared to then, and realize that the continual rise of inimum wage is part of what’s causing the decline in the economy. Can we really afford to lose any more jobs? Where will that leave us in the future? In much worse shape than we are now. Can we really afford to decline even further? If you think its rough now, imagine what it will be like then. The fact still remains that raising minimum wage causes unemployment, and has become a vicious circle of decline. Works Cited Wikipedia. “Minimum Wage” Web. 12 July, 2010. http://en. wikipedia. org/wiki/Minimum_wage United States House of Representatives. “JEC report” Web. 0 June, 2010. http://www. house. gov/jec/cost-gov/regs/minimum/case. htm MSN. “The recovery seems to be losing its pop” Web. 12, July 2010. http://www. msnbc. msn. com/id/38034014/ns/business-stocks_and_economy/ Yahoo Finance. “ 10 brands that may disappear in 2011” Web. 12, July 2010 http://finance. yahoo. com/banking-budgeting/article/110018/10-brands-that-may-disappear-in-2011 Reuters. “Thousands lose jobs due to higher federal minimum wage” Web. 12, July 2010 http://blogs. reuters. com/great-debate/2009/05/14/thousands-lose-jobs-due-to-higher-federal-minimum-wage/