Laney Iowa


If you lower minimum wage just a little bit, it could decrease the unemployment rate.

Dear Future President,

Do you think that unemployment is an issue that is getting to be a bigger problem? If you lower minimum wage just a little bit, it could decrease the unemployment rate.

Unemployment rates change all the time. They rise and fall for various different reasons that have to deal with the economy. Unemployment doesn’t only help people without jobs, it helps demand. The benefits get spent fast on consumer goods. People who have been unemployed for a while may be financially and emotionally unstable. It can also lead to illness, depression, and suicide.

Everyone is affected by unemployment, it’s like a ripple effect. The effects of unemployment are not having enough money for general everyday needs, like food, water, shelter, clothing, education, etc. More and more people are becoming unemployed. When they apply for assistance, government spending raises and the borrowing increases too. The people who are unemployed don’t spend as much money. That directly affects the businesses. If the businesses don’t have enough money coming in, they have to watch how much it costs to run the business. The long term effect of unemployment on businesses would be more unemployment due to lower sales. If there isn’t money coming in businesses would not be able to afford to keep the people they have, or to hire new people.

There are three main ways that people become unemployed; Frictional, Structural, and Cyclical.

Frictional Unemployment is when people keep switching jobs looking for higher pay, or a job that fits the person’s abilities better. It could also be from lay offs that don’t relate to the economy.

Structural Unemployment is when things don’t match up in the population of the local economy. Some companies have to lay off workers, saving the business money, to stay competitive with other businesses.

Cyclical Unemployment is when there isn’t enough demand for goods and services in the economy, and there isn’t enough jobs out there for all the people who want one.

There are people in Iowa, where I am from, that have concerns about unemployment. Right now Iowa’s unemployment rate is 4.9%. That makes Iowa the 16th best state to live in, by unemployment standards. This rate can change, and it could become higher. This matters because I live here. Something could happen to my family, friends, etc. that could make it so they would become unemployed. We are trying to get the unemployment rate down and doing that could possibly help government spending.

I think that lowering the minimum wage could be beneficial. It could help small businesses during hard times, spending less to get the work done. Most people earning minimum wage aren’t poor. They are mostly students who work after school or people who just started a new job. If the minimum wage increases, it could hurt the businesses. They would have to raise their prices on the goods they provide due to having to pay more to employees. If they raise the minimum wage, the business owners have to pay the employees more money, which means they have to come up with the money somewhere else if they don't want to raise their prices. If they don't raise their prices on the goods and services, they won’t have enough money coming in. Eventually having to layoff an employee or two. If minimum wage increases, the business will have to raise their prices on goods. You will end up spending the same amount of money as you would’ve if you just left it the way it was. It sounds good to make more money, but you have to look at both sides of the problem.

In conclusion, the government should do something to reduce the unemployment rate. Even if that means lowering the minimum wage. A lot of people are unemployed, and it hurts the nation in a variety of different ways.