Minimum Wage Policies in the United States

Why the USA Government Should Not Change the Minimum Wage
Author's Name
Institutional Affiliation
Course Code and Name
Professor's Name
Date
Why the USA Government Should Not Change the Minimum Wage
The minimum wage entails the least remuneration that the United States of America's (USA) government requires employers to pay their workers for the work done within a specific period. The amount cannot be decreased through an individual's contract or a collective agreement. The primary purpose of the minimum wage is to ensure that employees are not poorly compensated by their employers. The federal government plays a significant role in setting the minimum wage since workers enjoy the fruits of their labor, and it promotes equality. For instance, the minimum wage does not depend on employees' gender, but anyone must be paid an amount that equates to it or above it. The best thing about the minimum wage is that it only caps the lowest amount of money that an employee can get, but it does not restrict employers from paying more. In reality, states have distinctive minimum wages, which are determined by the living standard in each region. The primary aim of this paper is to show why the USA's government should not change the minimum wage.
The implementation of the federal minimum wage took place in 1938 after the Fair Labor Standards Act (FLSA) was enacted. In particular, it was the first time that the USA government intervened to set the standard pay for all workers. During this time, the minimum wage was set at 40 cents per hour, an amount that was reduced to 25 centers per hour so that it gain support from the representatives of the southern states. Since then, the minimum wage has risen about 22 times to what it is today, $7.25 per hour (Smith, 2021). From the 1940s to the 1960s, the minimum wage was increased to keep pace with inflation and the growing productivity, meaning the services and goods produced hourly. As the country became more economically stable, the pay that workers received ought to have increased. However, without the government's intervention, some employers were not going to increase wages. Since 1968, the economic growth has been gradual, and it was from that time that raising the minimum wage has never been a priority.
The government should not raise the minimum wage since it would lead to job losses and a high rate of unemployment. When the federal minimum wage was first established in 1938, it resulted in massive job losses. The majority of southerners were unable to keep up with the minimum wage of 40 cents per hour, which was why it was dropped to 25 cents per hour. What happened in 1938 is no different from what would occur today if the government tried to increase the minimum wage. Based on a 2010 report by Richard Burkhauser and Joseph Sabia, approximately 1.3 million jobs could be lost if the government raised the minimum wage to $9.50 per hour (cato.org, n.d.). On that note, the primary focus should not be on increasing the federal minimum wage but instead on emphasizing the consequences of raising it. A high rate of unemployment is a significant economic issue that might lead to increased crime rates and engagement in illegal activities. As a result, the government should not raise the minimum wage if it would lead to job losses and unemployment.  
The New York Times and liberal economists have warned the government about the adverse effects of raising the minimum wage. Many proponents of the minimum wage increment think that it would decrease the rate of poverty (Skorup, 2021). Nevertheless, what these people do not understand is that the majority of individuals living in poor households are unemployed. Numerous families earning average wages are not living in poverty since they have several members who are employed. Those living in abject poverty are not employed since they cannot secure job opportunities due to their lack of educational qualifications. As such, increasing the minimum wage will not affect poor families but rather make their lives more miserable. For instance, it would make it extremely difficult for those living in poverty to secure jobs. Besides, many families without a source of income find it challenging to educate their children, meaning that they have no hope of redeeming themselves from poverty in the future. If the minimum wage is increased, employers would consider hiring only talented, highly skilled, and educated people to ensure high productivity. Notably, poor families will be abandoned since the economy would not give them a chance to get jobs so that they can change their lives positively. 
The USA economy was among those hit by the adverse effects of the Covid-19 pandemic, and it is recovering now amid numerous issues arising, such as the war between Russia and Ukraine. In June 2020, the unemployment rate was 11.1%, and it is likely to stay constant for a few years before things get better (Greszler, 2020). Some medium-sized and small businesses have closed entirely, and others are on the verge of declaring bankruptcy. In that light, raising the minimum wage would be the last nail in the coffin, meaning that some businesses will never reopen their doors, and others would be obliged to shut down their operations. Based on a 2020 Yelp survey, as of 15th June 2020, about 35% of retailers had closed their doors for good, totaling 9,682 stores (Greszler, 2020). Companies should be left alone to determine the right time to raise their employees' wages. For example, in 2018, Amazon.com announced that it would increase its workers' minimum wages to an hourly rate of $15 (Greszler, 2020). The global firm decided to raise its employees' wages due to increased productivity and the automation of numerous low value-added jobs. Consequently, companies are the ones that should determine the right time to raise the minimum wages of their employees when productivity increases, but the government cannot assume that every firm is performing well and increase the federal minimum pay.
The dynamic monopsony model suggests that an increase in the minimum wage would have detrimental impacts on the economy (Kaufman, 2020). To start with, employees are usually paid based on the scope of work, skills, knowledge, experience, and level of education. As such, a company searching for workers with doctorate degrees would have to pay them higher than one looking for bachelor's graduates. Similarly, increasing the minimum wage would force companies to perceive as if they are raising their salaries and would have to look for highly educated and skilled applicants. On that note, individuals with little or no job experience and skills will not be hired (The Heritage Foundation, 2019). In addition, many organizations would do away with workers with disabilities who do not meet the minimum qualification threshold based on a firm's compensation model. Young people, especially fresh graduates, will not get any company interested in their services due to the government's wage requirement. As a result, the government should let the minimum wage remain unchanged so that graduates can easily secure jobs and acquire the needed experience to develop and grow their careers.
For many employees, the federal minimum wage does not change their lives significantly since large companies have already surpassed that threshold. In 2019, Bill de Blasio, New York City's Mayor, joined picketers outside a MacDonald's, demanding the fast-food c...