Should The Minimum Wage Be Raised? Essay

738 Words Nov 24th, 2014 3 Pages
There are many topics up for debate when discussing our economic policies. One of the most significant of these topics is whether or not our government should raise the national minimum wage. Many people promote a raise of the minimum wage, while others believe that there will be a downpour of negative economic effects stemming from the increase in minimum wage. We have gathered information to help understand what the effects will be when the minimum wage is raised. The supply and demand of labor will surely be among the things effected by a raise in the minimum wage. The supply and demand curves of labor show the different ways that these changes can effect firms and can also affect their workers. These curves show the number of workers willing to work in a firm or industry. While raising the minimum wage may seem good for the workers, it may come with some negative effects. When the wage is increased employers may be less inclined to hire new employees. This could cause a surplus in the demand for labor. Effectively, a federally set minimum wage is a price floor. There are certain repercussions on a market when a price floor is set and then a surplus is created. When there is surplus in the market and a price floor is in effect the market cannot get back to equilibrium. Employers may react in other ways to a mandatory raise in wage. They may have to make cutbacks to fringe benefits. Things such as training, paid insurance, and vacations will be among the things that…

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