Richard Berman, the Executive Director of the Employment Policies Institute, argues against an increase in the minimum wage. Jared Berstein, Director of the Living Standards Program for the Economic Policy Institute, supports a raise in the minimum wage.
Arguments Against Increasing The Minimum Wage
Berman states that increasing the minimum wage would make labor cost go up by $283 million, and staff cut backs would be the only way to balance expenses. He highlights his belief that Bill Clinton's mandates of increasing the minimum wage hindered the very people that the former President tried to help.
Moreover, Berman believes that mandated benefit legislation hurts people with inadequate skills and training the most. He suggests that businesses are the ones who should make decisions on employee benefits, not the government. He indicates that corporations become successful when they pay their workers based on productivity rather than government mandates.
He makes the point that when decisions on wages are made by businesses, it encourages employees to work harder for benefits such as paid vacation and health insurance. Furthermore, he touches on his idea that these same workers receive raises anyway because their employers choose to provide it to them.
Berman stated that when Franklin D. Roosevelt introduced federal legislations to improve the economy during the Great Depression, very little improved. Instead, he says that the Great Depression ended because of World War 2, which introduced new employment opportunities for the public, especially women.
Arguments For Increasing The Minimum Wage
Bernstein, on the other hand, points out his belief that when Bill Clinton raised the minimum wage in 1996, poverty fell to historic lows, particularly for the most disadvantaged workers - less skilled minorities and single mothers. He says that raising the minimum wage didn't cost jobs, but instead created new ones at a quick pace.
Another argument made by Bernstein is that both small and large businesses can benefit from raising the minimum wage because they can become more attractive for people who seek employment. He suggested that workers will put more effort into their jobs if they receive higher pays in the process.
Likewise, he indicated that if government increases the minimum wage, they are less likely to spend money on social welfare programs. As a result, according to Bernstein, the employees who get paid higher amounts are more likely to spend money, bringing larger revenue for businesses
With the current recession taking place, individuals are arguing whether or not raising the minimum wage would improve the economy. Supporters of a minimum wage increase believe that workers will work harder for their pay and are more likely to buy things. Critics of a minimum wage increase state that more jobs will be lost as a result.
Sources
www.epi.org/publications/entry/issue_guide_on_minimum_wage/
www.heritage.org/Research/Labor/minimumwage.cfm
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