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Minimum Wage Problems in America That You Might Not Know

Updated on May 18, 2017

Minimum wage in america today

Minimum wage problems in America

The Federal minimum wage has been eroding away since the 1970’s. It is time for people to have the ability to have a good life without hardships even though they are working minimum wage. It is time for change. It is time for a minimum wage that people can live on. It is time for the federal government to raise its minimum wage as 19 other states already have. It is time to slow down the rapidly increasing wage gap in America. It is time for a minimum wage increase, America! Throughout this paper, the reader will be pounded with facts on the people, the wage, the states who do not agree, and the wage gap.

It is almost impossible to believe the hardships that the minimum wage workers in the United States face. They must face extreme choices like to pay for food or rent for the next month. They work 40 hours every single week, long and hard hours just like other American workers. They are not even able to support a family easily, and that is a sad fact to see. This is not just a few people. This is twenty eight million people. Try to imagine that many people struggling by every single month. Living paycheck to paycheck but not getting anywhere in life, just working hard and staying in the same place.

This topic is huge in the United States at the moment. The minimum wage does not just affect the people earning the wage. It hurts everyone. The low wage causes people to turn to public assistance using the taxes that could be spent on other things if they had a decent wage. The United States’ taxpayer pays these taxes for the minimum wage workers’ public assistance. If anyone is against raising the minimum wage, they must remember they are affected by this low wage too. The economy is also hurt by this low wage. Consumer spending makes up 70% of the economy. For an economy to thrive, the lowest wage workers still must have the ability to purchase items on the market. Raising the minimum wage would no doubt help the economy. It would take the hardships away from the workers. Lastly, the tax money used for public assistance can be used for something else. This problem is not just affecting the workers. It is affecting the entire United States and it is time for change.

The average minimum wage worker and also the U.S taxpayers are hurt by this low wage. Many full-time minimum wage workers must choose to pay for rent or food or medical care (Peirce 2). There are people who go to the workplace and work hard for 40 hours a week, every single week of their lives and have to make extreme life choices. These choices include whether to pay rent to obtain shelter or obtain enough food to get through the month. Hunger and homeless survey found 42% of people requesting emergency food assistance were employed (Sklar 2). This fact is scary to some people. Almost 50% of the people requesting food assistance are employed. Any job should provide the worker with enough money for the basic necessities like food and water. Minimum wage hurts young adults trying to work through college because the wage falls far behind the rising cost of tuition (Sklar 4). The low minimum wage challenges students trying to work minimum wage to pay for their college tuition. With college tuitions rising and the minimum wage staying in the same place, students are forced to work long and hard hours just to have a college education. People working full time in a minimum wage job make $14,500 yearly after taxes (Obama 5). It is almost impossible to make only $14,500 and make it last an entire year. That is only taking home around $279 a week and around $1,115 a month. People who want to work hard should have the ability to obtain a decent wage. In some us cities, the minimum wage worker would have to make 2-4 times the current minimum wage to pay rent in a decent apartment (Peirce 1). Trying to have an apartment while working minimum wage means the worker is going to be spending 40-50% of their checks just to pay rent in a small city. In larger cities rent can be 2-4 times more than the current minimum wage salary. Some workers are unable to obtain adequate shelter. “It's not just fast food workers who pay the price. US taxpayers end up picking up the tab” (Logan 2). The businesses paying employees the bare minimum is causing the employees to seek public assistance and it is costing the United States taxpayers. For example, if an employee needs food, they most likely will apply for food stamps and food stamps are paid for through taxes. “We have all these low-workers who are getting $7.50, $8, or $9 an hour, and because they earn such a small wage, the government subsidizes them with billions or tens of billions of dollars of social-welfare spending that comes from the taxpayer. It's a classic example of businesses privatizing the benefits of their workers while socializing the cost” (Ornstein 2). The business should have to pay a living wage to the employee so they do not have to seek public assistance. The government is spending tens of billions of dollars because the minimum wage is too little to support someone. The government needs to step up and increase the minimum wage so it's the employer's duty to pay their employees a salary that can be lived on without public assistance. “Anyone who thinks minimum wage should not be raised should try living on it” (“The Minimum Wage Helps Small Businesses." 3). If anyone who reads this thinks the minimum wage is adequate, they should try living on it. Over the summer working around minimum wage full time gave the feel of what it's like to live on this wage. Every paycheck around $475 every two weeks, for a high schooler this is enough to live comfortable and even save cash. On the other hand, people who work in the same building were earning the same wage trying to support a family and even children. It is mind blowing that someone could take that little bit of cash and support a family with it. “When businesses don't pay a living wage society pays” (Sklar 1). If the wage stays this low, the U.S. taxpayers will continue to pay for it through their tax dollars. This low wage is not just hurting the workers it is hurting everyone. There needs to be action. Someone has to make a change in this economy.

The people living on this wage have to face undue hardship in the year 2016. In this paragraph the main points are who is living on this wage and why was the minimum wage enacted in the first place. The people making minimum wage are still very crucial to the American economic machine (Peirce 1). These people earning minimum wage in the United States are needed in the American economy. There are always going to be low wage jobs that nobody wants to do, but somebody out there has to do them or the economy will hurt. The people who are earning minimum wage are still very important in making the U.S economic machine push on. The regular worker who would benefit from the increase of the minimum wage is a person 35 years old (Obama 5). It is a sad fact to hear because a person that age should have the ability to start a family or if they have one, make enough money to provide for them. The Economics Policy Institute states that 28.5 million American workers are earning less than $8 an hour at the workplace (“A National Living Wage Will Improve Living Standards” 2). There are 28.5 million Americans going through the struggle of earning minimum wage. These people are not just school dropouts, most have achieved a high school diploma. There are very few people earning the federal minimum wage with a college diploma, however; education is the answer to escaping the low minimum wage. The downside is the average minimum wage worker will have a very difficult time completing a four year degree at any college because of their low wage and high cost of tuition. Consumer spending makes up about 70% of the United States economy (Sklar 1). The consumers that earn minimum wage have very little if no spending money and this hurts the economy. To have an economy flourish, the consumers must be buying products and services. A minimum wage increase would benefit the economy. The Federal minimum wage was also meant to promote economic development and stop the original “race to the bottom” by the employers moving to cheaper labor states in a terrible downward spiral (Sklar 1). The workers in the United States deserve a living wage. The employers will not give employees a decent raise over minimum wage if the employee has little to offer. For an example, a Taco Bell employee worked for one and a half years there and learned every skill needed to work there and only received a 40 cent raise over that period of time. Employers want their business to be the most profitable as they can. Paying employees the bare minimum wage is an easy way to save money and increase profits. “Labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and the general well-being of workers” (Sklar 3). This is the definition of the term minimum wage. The current minimum wage definitely does not promote healthy, efficient, and the general well-being of workers. If any minimum wage worker was to read the definition of minimum wage, they would surely not agree with the United States minimum wage. It would put a floor under workers’ wages, alleviate the hardship of inadequate wages, and stimulate the economy and job creation by increasing the consumer purchasing power (Sklar 1). This was how the minimum wage was supposed to affect America in the year 1938 when it was enacted. It did affect the people making minimum wage and it made their lives better. It also stimulated the economy during that time period. It stayed like that until around the 1970’s when the true value of the minimum wage started to erode away. The minimum wage was called “an essential part of economic recovery” (Sklar 1). As the minimum wage was essential back then and it still is essential now. Increasing minimum wage would stimulate economic recovery and help the people earning that wage, which is something needed in the United States.

There are multiple states with minimum wages over the current federal minimum wage. There are a good bit of people who are against increasing the minimum wage. There are 19 states that have a minimum wage higher than the national minimum wage of 7 dollars and 25 cents. There is a total of 9 states with a lower rate than the national wage or no minimum wage at all. (Cass 2). Almost half of the states in America have state minimum wages set above this federal minimum wage. This is an obvious clue that the federal minimum wage must increase since 19 states do not agree with its current rate. In multiple states particularly those who are Republican in the midwest, and also the south, there is a very little chance to increase the minimum wage over the current federal minimum wage (Scheiber 1). Those 9 states with wages lower than the national rate and ones who do not have a minimum wage established are mostly states that are Republican. The Republicans are against the increase of minimum wage and will not agree and maybe even fight it whenever someone tries to increase it. Those 9 states in the midwest and the south have very little chance of increasing their state minimum wage. Instead of the Republican party standing up for the better wages, they have been an attacker of the groups who are supporting the rights of the people making minimum wage and low wage workers (Logan 3). The Republican party as a whole is completely against the increase of the federal minimum wage. They attack and try to stop the wage from increasing. The Democratic party is in favor of increasing the federal minimum wage and they have been trying to for the past few years. The only problem is the minimum wage bill must make it through a Republican controlled Senate and that is a challenge since they are against it. “It’s a myth that minimum wage increases kills job development” (“The Minimum Wage Helps Small Businesses." 3). One big reason many people are against the increase of minimum age is the idea that when the wage increases, jobs will be killed off. The real question is who wants to put in long hard hours in a job that does not even give them the ability to support themselves and have a little extra cash? Increasing the federal minimum wage little by little is not going to kill any jobs or hurt job development. For example, Ohio’s minimum wage is almost $1 more than the federal minimum wage, and there are still plenty of jobs in this state.

The United States of America has a pretty large wage gap and it is growing by the day. In 1973, the richest 1% of Americans were receiving 9% of the United States national income. By the 2006, they had 23% of the nation's income (sklar 2). The income gap has exploded since the 1970’s. The 1970’s was when the minimum wage buying power started to erode away and CEO salaries shot through the roof . The United States has a total of 324,707,000 people living within its borders. This means only 3,247,070 Americans were earning 23% of the nation's income. In the year 1980, the average CEO at a big corporation made the same amount as 97 minimum wage workers (Sklar 3). This seems very understandable and agreeable. Unfortunately, this number has been growing ever since the 1980’s. In the year 1997, the average CEO made the same as 728 people working minimum wage (Sklar 3). The number of minimum wage workers salaries compared to CEOs just 17 years later exploded into 728 people earning minimum wage compared to a CEO at a big corporation. This number is still growing as the CEO's wage goes up quickly and the minimum wage slowly increases. In the year 2007, which was the longest period the Federal minimum wage did not increase, CEO’s made the same as 1,131 minimum wage employees (Sklar 3). This number is mind boggling that one CEO at a large company make the same as 1,131 minimum wage workers. The average minimum wage worker makes around $15,000 after taxes. Let's do the math and see how much big corporation CEOs make, $15,000 X 1,131 = $16,965,000. This number is not done growing. In the years to come, it is just going to keep getting bigger unless the minimum wage gets an increase. If the minimum-wage worker’s salary grew at the same rate as the pay of CEOs of American corporations for the past 5 years, the minimum wage should be about $23 dollars an hour or $49,000 a year (Peirce 2). If the minimum wage would have risen at the same rate as a CEOs, the wage would be $49,000 today. That is a little over three times the yearly wage of a minimum wage employee after taxes. The corporations are the employers of hundreds to even thousands of minimum wage employees. If they want to earn a huge paycheck but not pay their employees a living wage, something needs to be done by the government immediately. The CEO’s do not want to purposely lose profit. The government must increase minimum wage to force them to increase their wages. The richest 2.7 million people have the same income as the poorest 100 million people in the United States (Sklar 1). It is unbelievable that only 2.7 million people earn the same amount as the poorest 100 million. Those 2.7 million people make so much money it is almost impossible to know what you want to do with all of it. While the poorest 100 million people sometimes struggle by and do not have enough money to get through daily life. The extreme wage gap in America is just plain sad. Something needs to be changed and increasing the minimum wage is the answer to this problem.

After reading this paper, have your eyes opened to the problem that the low minimum wage is causing? In the years to come, people must push the minimum wage increase. The Republicans must agree with change and stop fighting the idea that the wage must increase. The public must work together for the betterment of the United States as a whole instead of their political views. This problem does not just affect one party it affects them both whether they want to believe it or not. The minimum wage has been eroding since the 1970’s, it is time for the erosion to be put to a halt.

Throughout this paper, the reader is slammed with true facts about minimum wage that people just do not want to believe. They think they are safe and are protected from this problem because they have a college degree and work a good job, but sorry people, you are affected too. It is crazy how the minimum wage was enacted in the year 1938 and it is already eroded away to almost nothing. There are 19 states who do not agree with the current federal minimum wage and have raised their state minimum wage. While 9 states have no minimum wage set or it is the same as the federal wage, to no surprise they are almost all controlled by the Republican party. The wage gap in the United States was also another huge part of this paper. As the minimum wage workers work hard for their salaries, there are people out there making their daily wage in just minutes. There are 2.7 million people making the same amount of money as 100 million of the poorest people in this nation. The minimum wage is causing many problems in the economy and it needs to be fixed. After you read this paper, after it has been reviewed and facts relinked, what is the reader’s feel on minimum wage? Ponder the question yourself. Think about the people, problems, solutions, and the way this country as a whole can fix this.

To conclude this paper, it is simple. It is the year 2016, and not a single person in America who has the drive to work should be paid a wage where they have to struggle to live. We need to work together as a country to increase the minimum wage to solve many problems. An increase would benefit almost everyone in the United States. Just try to imagine how life is through a minimum wage worker’s eyes. Try to take the amount of cash they earn and budget your month. It is a challenge. It is a challenge 28 million people have to face because they have no choice.

Works cited

  1. Cass, Oren. "A Smarter Way to Raise Paychecks." New York Times 10 Sept. 2015: A31(L). Opposing Viewpoints in Context. Web. 7 Oct. 2016.

B. Committees of Correspondence for Democracy and Socialism. "A National Living Wage Will Improve Living Standards." Work. Ed. James Haley. San Diego: Greenhaven Press, 2002. Opposing Viewpoints. Opposing Viewpoints in Context. Web. 18 Oct. 2016.

C. Logan, John. "Fast Food Workers Are Exploited and Underpaid." Fast Food. Ed. Tamara Thompson. Farmington Hills, MI: Greenhaven Press, 2015. At Issue. Rpt. from "Fast Food Workers Need a Raise and a Voice." Hill 6 Dec. 2013. Opposing Viewpoints in Context. Web. 7 Oct. 2016

D. Obama, Barack. "Stronger Federal Economic and Social Policies Would Help Single-Parent Families."Single-Parent Families. Ed. Margaret Haerens. Farmington Hills, MI: Greenhaven Press, 2016. Opposing Viewpoints. Rpt. from "Remarks by the President on Women and the Economy." 2014. Opposing Viewpoints in Context. Web. 18 Oct. 2016.

E. Ornstein, Norm. "There Is a Moral and Economic Case for Raising the Minimum Wage." Ethics. Ed. Noël Merino. Farmington Hills, MI: Greenhaven Press, 2015. Opposing Viewpoints. Rpt. from "The Moral and Economic Case for Raising the Minimum Wage." 2013.Opposing Viewpoints in Context. Web. 7 Oct. 2016.

F. Peirce, Neal. "A 'Living Wage' Is Necessary to Help the Working Poor." Inner-City Poverty. Ed. Tamara L. Roleff. San Diego: Greenhaven Press, 2003. Contemporary Issues Companion. Rpt. from "Living Wages'—It's About Time." Liberal Opinion Week. 2000. Opposing Viewpoints in Context. Web. 20 Oct. 2016.

G. Scheiber, Noam. "Raising Floor for Wages Pushes Economy Into the Unknown." New York Times 27 July 2015: A1(L). Opposing Viewpoints in Context. Web. 18 Oct. 2016.

H. Sklar, Holly. "Raising the Minimum Wage Will Reduce Poverty." Poverty. Ed. Roman Espejo. Detroit: Greenhaven Press, 2012. Opposing Viewpoints. Rpt. from "Raise the Minimum Wage to $10 in 2010." 2009. Opposing Viewpoints in Context. Web. 13 Oct. 2016.

  1. Sklar, Holly. "Raising Minimum Wage Does Not Increase Unemployment." Unemployment. Ed. David Haugen and Susan Musser. Detroit: Greenhaven Press, 2011. Opposing Viewpoints. Rpt. from "Raising the Minimum Wage in Hard Times." Let Justice Roll Living Wage Campaign. 2009.Opposing Viewpoints in Context. Web. 17 Oct. 2016.

J. Sklar, Holly. "Raising the Minimum Wage Will Help the Poor." Social Justice. Ed. William Dudley. San Diego: Greenhaven Press, 2005. Opposing Viewpoints. Rpt. from "Raise the Minimum Wage to $10 in 2010." Let Justice Roll Living Wage Campaign. 2009. Opposing Viewpoints in Context. Web. 18 Oct. 2016.

K. “The Minimum Wage Helps Small Businesses." The Minimum Wage. Ed. Noah Berlatsky. Detroit: Greenhaven Press, 2012. Opposing Viewpoints. Rpt. from "Business Owners Welcome Minimum Wage Increase." 2009. Opposing Viewpoints in Context. Web. 18 Oct. 2016.

L. Scheiber, Noam. "Raising Floor for Wages Pushes Economy Into the Unknown." New York Times 27 July 2015: A1(L). Opposing Viewpoints in Context. Web. 18 Oct. 2016.

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