Abolishing the minimum wage could reduce the spending power of many people in the country, ultimately hurting the overall economy, according to supporters of minimum wage laws.
A set minimum standard improves the self-confidence of people getting into the job market. Here are four consequences opponents of abolishing the minimum wage say will happen:
1. No minimum wage would make it worse for lower paid people. Minimum wage laws tell workers they have value and will be provided with a certain amount of protection,
Bob Greene wrote in a column for CNN.
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Although the minimum wage may seem small and insignificant to some people, it makes a difference to many workers starting out in what they can purchase. Employees are guaranteed a certain salary that allows them to improve the quality of their food, buy more gas, pay the rent or handle other basic necessities. Without a set minimum standard, people wouldn't be able to make progress or improve their livelihood.
2. No minimum wage laws would encourage employers to hire less skilled workers or cheaper replacements when an employee leaves,
writes Jordan Weissmann, senior business and economics correspondent for Slate.
Many of these low-skilled employees would be teenagers or young people just out of college still living at home. They would be willing to take the low-paying jobs because they aren’t paying rent. This would affect more qualified adult workers, who need jobs to support their families.
"If increasing the minimum wage benefits the many at the expense of the few, eliminating it might well benefit the few at the expense of the many," says Weissmann.
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3. Low-paid workers would have less money to spend, continuing the cycle of poverty. Full-time minimum wage workers are making only $14,500 a year, which is below the poverty line for a family of four,
according to Think Progress.
It would be most harmful to women and minorities, reports Think Progress. Minorities make up more than 40 percent of minimum wage workers while women represent two-thirds of these workers.
4. Abolishing the minimum wage would continue wage stagnation. Businesses might lose because more people would have less money to spend for establishments in their communities.
According to Economic Policy Institute, "Setting the minimum wage at an appropriate level can help spur broad-based wage growth and move us toward an economy where workers benefit from productivity growth."
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