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Jordan Moss

Professor Mitchell

UWRT 1104 054

1 November 2017

We Need a Living Wage: Why the Minimum Wage Should be Increased

In the United States, 3.9% of hourly-paid employees currently make the minimum wage

or less. This is approximately 3 million Americans (Characteristics of Minimum Wage

Workers, 2014.). The minimum wage is the legal minimum that an employer is allowed to pay

their employee. Today, the federal minimum wage is $7.25 per hour, but some states and cities

have their own minimum wage that is set higher than the federal minimum. The states with

highest minimum wages are Washington and Massachusetts, where it is $11.00 (Minimum

Wage Tracker.). Although the federal minimum wage has not been raised since 2009 (7 Facts

about the Minimum Wage.), the minimum wage should have reached $21.72 an hour in 2012

if it kept up with increases in worker productivity, according Caroline Fairchild of the

Huffington Post. In addition, the cost of living has increased by nearly 12 percent. (7 Facts

about the Minimum Wage.) A survey of 1,000 business executives was conducted by

LuntzGlobal, and it found that 80% of those surveyed support a raise in the minimum wage

(DePillis). Even so, raising the minimum wage is still a controversial topic. In my research, Ive

found evidence that may suggest that the minimum wage needs to be raised. Such evidence

includes the fact that at its current rate, the minimum wage is not high enough for workers who

are paid that amount to afford housing. The evidence also shows that raising it would make it

easier for such workers to afford a home, decreasing the number of homeless Americans. Raising
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the minimum wage has also been shown to be beneficial to the physical and mental health of

low-income American workers and their families. Economists have also proven that raising the

minimum wage would not negatively impact the employment rate, as many people expect.

Currently, the federal minimum wage in the United States is not high enough for people

who work minimum wage jobs to afford housing. The federal government defines housing as

affordable if thirty percent or less of the households income is used to pay for rent and utilities.

In Charlotte, North Carolina, the amount of money a single full-time worker would have to make

to afford the average two-bedroom apartment is $17.44 per hour. The same worker would need

to earn $28.08 per hour to afford the average two-bedroom apartment in Manhattan, New York.

If they wanted a similar apartment in Little Rock, Arkansas, a state that has one of the lowest

average rent rates in the United States, they would need to make $13.72 per hour, which is still

nearly twice the federal minimum wage (Out of Reach). There is nowhere in America where a

person making minimum wage can afford a two-bedroom apartment, and there are only twelve

counties where that person could afford even a one-bedroom apartment (Gee). Because the cost

of housing is so expensive, even people with full time jobs often cannot afford a home, which

contributes to homelessness in the United States. However, economists have found evidence that

raising the minimum wage reduces the number of people living in poverty, which would make it

easier for low-income families to afford housing. In a paper by UMass Amherst economist Arin

Dube, titled Minimum Wages and the Distribution of Family Incomes, he analyzes statistics

from previous studies and discovered that raising the minimum wage reduces poverty. He wrote

that raising the minimum wage 10 percent, from the current $7.25 to approximately $8.00, would

lower the number of people living in poverty by 2.4 percent, meaning the minimum wage has an

elasticity of -0.24. Dube also was able to look at other elasticities from 12 different studies, and
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of the 54 elasticities he examined, 48 of them were negative (Konczal). Dubes work shows that

if the federal minimum wage were raised, it would benefit people living in poverty across the

United States, and it would make it easier for those people to be able to afford housing for their

families.

Another important reason why a minimum wage increase is necessary is because it would

greatly benefit the health of low income families, and because of the ripple effect, the health of

people who earn just above the minimum wage as well. Living in poverty can cause people to

have some serious health problems. For example, heart attacks in younger people, digestive

problems, and mental illnesses have all been shown to be linked to the stresses that come with

poverty (Furillo). Low wages can also lead to premature death, when someone becomes ill and is

unable to afford treatment. In 2014, Rajiv Bhatia wrote a report for Human Impact Partners on a

legislative proposal titled Health Benefits of Raising Californias Minimum Wage. It was a

proposal to raise Californias minimum wage to $13 by 2017. In the report, Bhatia found that this

wage increase would prevent the premature deaths of almost 400 low-income people living in

California every year. The report also mentions that in the United States, people living above the

poverty line live an average of five years longer than people who live below it (Krisberg). There

have also been research studies that have shown that raising the minimum wage by one dollar

can help reduce adolescent birth rates by around 2 percent, resulting in about five thousand fewer

births every year. Even though the rates of teen pregnancy have declined in the last twenty years,

the United States still has the highest teen birth rate of any developed country (Bullinger).

According to the research, the teen birth rate could potentially lower with a minimum wage hike.

The results of this research suggest that raising the minimum wage may cause teenagers to

believe their future is brighter, making them more motivated to make better health decisions
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(Castaneda). Raising the minimum wage would also help families afford food. According to the

U.S. Department of Agriculture, 68 percent of the families with children who reported hunger in

2014 have at least one full-time working adult (Furillo).

The main argument that people who are against raising the minimum wage use is that it

would likely force employers to cut jobs, leading to an increase in unemployment. However,

dozens of studies have shown that this is not true. John Schmitt, a Senior Economist at the

Center for Economic and Policy Research, wrote a report in which he discusses many different

research studies and their conclusions, and possible reasons why they may have found what they

did. One of the more well-known studies, which Schmitt included in this report, was conducted

in 1992 by David Card and Alan Krueger. They conducted telephone surveys on fast-food

restaurant owners before and after a raise in the state minimum wage in New Jersey, and

compared them to the survey results of fast-food restaurants in Pennsylvania, whose minimum

wage did not change. Card and Krueger were unable to find evidence that the rise in New

Jerseys minimum wage reduced fast-food employment in the state. Many other economists have

conducted their own research as well, and have also found that when the minimum wage is

increased by a modest amount, there is no discernible affect on employment. Some have found a

very small increase, and others have found a very small decrease, but the majority of studies

have found that when the minimum wage is increased by a reasonable amount, the employment

rate remains approximately the same. Schmitt speculates that employment is relatively

unaffected because employers generally don't want to have to lay off their workers, so they'll

avoid doing so whenever possible. He says that different employers react to a minimum wage

increase in different ways, and lists some of the ways they may make up for having to pay

workers more. For example, sometimes employers do cut workers hours or benefits, or increase
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the consumer prices of their products. Some just accept lower profits instead. Schmitt claims that

employees also tend to work harder when the minimum wage is increased, and some employers

feel that the extra productivity is enough to make up for the amount they lose in profits.

In my research, Ive found that there is a significant amount of evidence to suggest that

the minimum wage should be raised. It should be raised because its not currently high enough to

allow minimum wage workers to afford housing, and a raise would lower the number of

Americans who are homeless. A minimum wage increase would also help improve the physical

and mental health of low-income Americans. It would help by making adequate healthcare more

affordable and accessible to them and by reducing the stress of living in poverty. Raising the

minimum wage by a modest amount is also shown to have no significant effect on employment.

If the minimum wage were gradually raised to $15 per hour over the span of several years,

thousands of American people would be able to get out of poverty, without the potential risk of

increasing it too much and employers being forced to lay off workers. If poverty could be

reduced, the American people would be positively affected in an important way, and that would

contribute to a more livable society.

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Works Cited

7 Facts about the Minimum Wage. U.S. Department of Labor, U.S. Department of Labor,

blog.dol.gov/2016/07/22/7-facts-about-the-minimum-wage.

Bullinger, Lindsey. Minimum Wage as Birth Control. Public Health Post, School of Public and

Environmental Affairs, Indiana University, 1 May 2017,

www.publichealthpost.org/research/minimum-wage-birth-control/.

Castaneda, Ruben. How Boosting the Minimum Wage Could Lower the Teen Birthrate. US

News, US News, 14 Sept. 2017, health.usnews.com/wellness/family/articles/2017-09-

14/how-boosting-the-minimum-wage-could-lower-the-teen-birthrate.

Characteristics of Minimum Wage Workers, 2014. BLS Reports,

www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-

workers-2014.pdf.

DePillis, Lydia. Leaked Documents Show Strong Business Support for Raising the Minimum

Wage. The Washington Post, WP Company, 4 Apr. 2016,

www.washingtonpost.com/news/wonk/wp/2016/04/04/leaked-documents-show-strong-

business-support-for-raising-the-minimum-wage/?utm_term=.d2d789510c6f.

Fairchild, Caroline. Minimum Wage Would Be $21.72 If It Kept Pace With Increases In

Productivity: Study. The Huffington Post, TheHuffingtonPost.com, 13 Feb. 2013,

www.huffingtonpost.com/2013/02/13/minimum-wage-productivity_n_2680639.html.
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Furillo, Jill. Raising the Minimum Wage Is a Matter of Public Health. New York State Nurses

Association, New York State Nurses Association, www.nysna.org/raising-minimum-wage-

matter-public-health#.WgEjhGhSzIV.

Gee, Alastair. Earn Minimum Wage in the US? You Can Afford to Live in Exactly 12

Counties. The Guardian, Guardian News and Media, 8 June 2017,

www.theguardian.com/us-news/2017/jun/08/minimum-wage-affordable-housing-rentals-

study.

Konczal, Mike. Economists Agree: Raising the Minimum Wage Reduces Poverty. The

Washington Post, WP Company, 4 Jan. 2014,

www.washingtonpost.com/news/wonk/wp/2014/01/04/economists-agree-raising-the-

minimum-wage-reduces-poverty/?utm_term=.16dddadf0cc4.

Krisberg, Kim. Raising Minimum Wage Good for Public Health, Not Just Wallets: Advocates

Call for Federal Increase. The Nation's Health, American Public Health Association, 1

Mar. 2015, thenationshealth.aphapublications.org/content/45/2/1.1.full.

Minimum Wage Tracker. Economic Policy Institute, Economic Policy Institute, 4 Oct. 2017,

www.epi.org/minimum-wage-tracker/#/min_wage/Massachusetts.

Out Of Reach. National Low Income Housing Coalition, 2017, nlihc.org/oor.

Schmitt, John. Why Does the Minimum Wage Have No Discernible Effect on Employment?

Center for Economic and Policy Research, 2013, Why Does the Minimum Wage Have

No Discernible Effect on Employment?, cepr.net/documents/publications/min-wage-

2013-02.pdf.