The Minimum Wage Must Be Increased Essay - 1488 Words

â€Å"Of course, nothing helps families make ends meet like higher wages. †¦ And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.† –President Obama, State of the Union address, Jan. 20, 2014 In the 2014 State of the Union address, President Obama called on Congress to raise the national minimum wage from $7.25 to $10.10 an hour, and soon after signed an Executive Order to raise the minimum wage to $10.10 for the individuals working on new federal service contracts. An increase in the minimum wage has been a topic of†¦show more content†¦Professor of Economics and author Ravi Batra found that employment has increased almost every time the minimum wage has gone up (187). For example, in the year following the minimum wage increase in 1997, the last time there was such a raise, employment rose by 1.9 million people. In 47 years the minimum wage increased 17 times, 14 of which saw a rise in employment a year after the increase took place. Even in the short-term, an increased minimum wage will not create unemployment. As for small businesses being harmed by an increase in minimum wage, Batra proves that a rise in minimum wage, as long as it is not faster than the rise in prices, will not adversely affect the businesses’ profits. He says that a business’s profit equals the revenue, less wage costs and all other costs. Batra offers an example with a popular fast-food franchise: Suppose you own a McDonald’s franchise; a teenage cook makes ten hamburgers per hour for you, and each hamburger is sold for $2. Your hourly business revenue from hiring that cook is $20, i.e., price times the cook’s output. Suppose all other costs add up to $12 per hour of production, and the minimum wage you pay the cook is $5 per hour. Then your hourly profit from hiring that cook is $3 [$20 - $5 - $12]. Now suppose all costs a prices double, that is, a hamburger fetches $4, the minimum wage becomes $10, and other costs rise to $24.Show MoreRelatedEssay on The Minimum Wage Must Be Increased1575 Words   |  7 PagesNo family gets rich from earning the minimum wage. In fact, the current minimum wage does not even lift a family out of poverty. -- Jon Corzine Many people can think back and remember what it was like to put in an application for that first job and be presented with a position. Taking that position represents adulthood and is a very exciting time for a young person. All first jobs usually start with a minimum wage. 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