Angela Langdon Entry #3: Minimum Wage Increase

Anyone who watched President Obama’s State of the Union Address has heard of the various plans he has for his second term. One of those is the plan to raise the minimum wage from $7.25 to $10.10 an hour. Obama plans to put this into action by signing an executive order, something that is only supposed to happen when it stems from an act of Congress or from the Constitution itself. It appears that the intention of this act would be to reduce the poverty level and increase wages for moderate to low income families. The Congressional Budget Office (CBO) estimates that this could cost roughly 500,000 jobs. However, this estimate is approximate and the actual impact could range from minimal job loss to a loss of one million workers. The White House responded by saying that “CBO’s estimate doesn’t reflect the overall consensus view of economists who say [the increase] would have minimum or no impact on employment.” So, will it work? The problem with this is that it’s impossible to guarantee whether or not employers will agree to pay their employee’s more. Some companies may not even have the budget to increase wages and will therefore have to fire workers. I heard something on the radio that made a lot of sense to me. They said what happens if the landlords of these low-income families decide to raise rent because they know their tenants are now making more money?  The benefits of this wage increase don’t seem to outweigh the risks. Sure, it could give people more money but there’s no guarantee. There’s a huge possibility that the people this is targeted to help will actually lose their jobs and businesses will have a harder time functioning because they can’t afford the proper amount of workers. It also seems like an overstep for the executive branch considering this isn’t exactly what executive orders were intended for.


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