businesses: “A small increase of $1. 60 per hour would cost a bake shop with ten clerks and bakers aver $30,000 per year, not counting the increases that a higher payroll brings in the costs of workers compensation insurance, unemployment insurance, Social Security taxes, Medicare taxes and even liability insurance in some cases. ” (Mark Alesse and Matthew Guilbault, 2004). And it is just a simple comparison of small shop, where minimum wage increase adds another problem to existing situation of debt, taxes and state’s spending. Therefore, raised costs in small businesses will force its owners to reduce costs on operating business.
Yet, federal government has no other way out to increase wages for low-income workers. Let’s look at workforce that fills the ranks of low-income citizens. Among them are: teens without high school diploma (4%), part-time workers, who work less than 35 hours/week (6%), service occupations’ employees – food preparation and service jobs (7%), employees of leisure and hospitality spheres (13%). Workers with high school diploma or college graduates make 2 and 1 percent accordingly, Asians – 1%, white, black and Hispanic – 2%, full-time workers – 1%, employees in such fields as management, natural resources and construction make up 1% of minimum-wage workers.
Moreover, 4 percent of minimum-wage workers reside in states like Alabama, Oklahoma and Arkansas; while only 1 percent of them live in California and Minnesota. Therefore, it is obvious, that low-income employees have a fair wage, because most of them have no diploma or higher education, thus, can make good performance only in services related to food and leisure, they prefer or must choose part-time job to full-time, and they live in undeveloped or unindustrialized area.
Besides, minimum-wage increase may result in teen’s school leaving. Teenagers, as a young and, usually, brilliant workers (their energy and knowledge still wonder adults), may enter workforce and replace lower-skilled employees – single parents, people with physical disabilities, immigrants with low reading and communicating skills and those, who had to drop from school. Hence, teens will block the opportunities for this workforce and rob themselves of education and training in order to get high-paid job.
So, it is not finally determined by federal government, whether increase in minimum wage has negative or positive effect, but, it is clear, that it is not so essential for average American citizen. It should be remembered that the U. S. government provides cash, nutritional, healthcare, real estate and tax assistance programs that give sufficient support for single parent or low-income families.
Alesse and Guilbault investigated that a minimum wage of a single parent with two children in NY area in 2003 composed $14/hour (Gotham Gazette, 2004). Thus, employees that are considered to be among low-income and middle-income workers may get equal wages, if social programs and governmental support would be added to the first group. Federal minimum wage increase should be counted in a long-term perspective and effects on the U. S. economy, for if it fails to meet the existing goals, the whole nation would run the risk of failure and bankruptcy.
1. Alesse, Mark and Guilbault, Matthew. (2004). A Minimum Wage Increase Will Hurt Small Business and the Working Poor. Online. February 16, 2004. Internet. Gotham Gazette. Available: http://www. gothamgazette. com/article/20040216/202/871 2. Characteristics of Minimum Wage Workers: 2006. (2007). Online. March 2, 2007. Internet. U. S. Department of Labor. Available: http://www.bls.gov/cps/minwage2006.htm