Minimum Wage

Dear President, I am Alex, a eighth grade student from the Cleveland area. Minimum wage has a significant effect on everybody. Several people would like to raise the minimum wage. Raising the minimum wage would increase America’s poverty rate, increase the unemployment rate, and increase the prices on everyday goods. Raising the minimum would not benefit America. If minimum wage increases, America's poverty rate would increase. According to a study from the Federal Reserve Bank of Cleveland shows, if people are being paid more than the current minimum wage, their hours would decrease so the company could gain the same or more profit. Since the hours decline, the employee would see less income. Even if the minimum wage is raised, the worker would make the same amount or even less money than they would make with the current minimum wage. A Professor from the Stockholm School of Economics in Riga says that “The net effect of higher minimum wages would be unfavorable for impoverished households, even if there are no job losses. To the extent that some poor households also lose jobs, their net losses would be greater." The minimum wage should not be raised because the effects would not favor the poor. An increase of minimum wage, would increase the unemployment rate. If employees are paid more, a company or business would have to cut back on spending. A business would do this by letting go of employees, creating a higher unemployment rate. If the minimum wage is increased to $10.10, The Congressional Budget Office projects 500,000 jobs would be lost. 10% of jobs nationally would be lost. In a survey of about 1,200 businessmen and human resource workers, 38% said they would lay off workers and 54% said they would decrease the hiring levels. This would make it harder for people that do not have a job to get a job, and some people who have a job paying minimum wage would lose it. San Francisco's Office of Economic Analysis said that an increase to $15 would reduce the city's employment by about "15,270 private sector jobs." Increasing the minimum wage would increase the price of consumer goods. With the price of goods going up there would be an increase of inflation. A study from Purdue University shows that raising the wage of fast food restaurant employees to $15 or $22 per hour would result in a price increase of 4.3% and 25% respectively, or a reduction in product size between 12% and 70%. In Oakland, a study found that after an increase minimum wage to $12.25, the price of a cup of coffee would increase from 10% to 20%. The higher the minimum wage is raised, the higher the unemployment rate. You are responsible for keeping jobs in the United States. You promised your people to bring jobs into America. If you keep the minimum wage from going up nationally, you will keep many job in the U.S and you will continue to bring jobs to America. You can keep the minimum wage from going up by vetoing bills regarding the minimum wage. If you raise the minimum wage, you will hurt the economy more than do good for it. Sincerely, Alex