Raising the Minimum Wage: Beneficial or Not?


As of 2020, the minimum wage for Arizona increased from $11 per hour to $12. As a working student, this announcement greatly excited me. However, as I began to hear other working students around me discuss the new increase in their personal salaries, they mentioned things like cost increases in their establishments, such as things like increase in costs of meals in restaurants. After hearing various conversations, my excitement began to shift a bit, and I have been left with the question: is an increased minimum wage actually beneficial for employees?


With this question in mind, I decided to look into the issue. After weighing out the pros and the cons of an increased minimum wage, I have found that there can be a middle ground between opinions. According to Toggl, minimum wage can really do numbers on individuals, and even groups.


Among the pros, the increase can do things like boost the economy, create more jobs, and reduce unemployment.


When consumers are given more money, they will naturally spend more money. When money is circulating through businesses, it can bring in a lot of success. When businesses flourish and consumers are happy, the economy is boosted. When consumer activity is increased, a higher demand for workers will then be initiated, which will then cause higher job availability for the unemployed.


With a higher amount of people employed, and a lifted economy, people can be brought out of poverty, low-income families can become more successful, and the poverty gap between the rich and poor can become smaller.


However, along with these pros, come the cons. According to Investopedia, they can consist of an increase in cost on the cost of living by certain companies, smaller businesses can be harmed, and businesses may eventually downsize their staff.


In order to keep up with the rising minimum wage, it would make sense for businesses to increase the costs of their goods and services. However, this may be bad for business, which would disencourage consumers to purchase from them. The increase could also have a negative impact on local and small businesses. Without a major funding system like the most popular businesses seen today have, smaller scale businesses will have a harder time paying their employees. Eventually, if a business can’t afford to pay each of their employees the required wage, they may have to lay some of them off.


Minimum wage has pros and cons that contradict each other in most instances. According to the Economic Policy Institute, the federal minimum wage is predicted to increase  to $15 by 2025. This would boost annual wages for low-wage workers to $92.5 billion, a $2,800 increase per worker; but at what cost? In time, we are sure to see how the constant,y raising minimum wage will play out on the overall economy and society.