Did you know the last time the minimum wage was increased was in 2009? That was when the minimum wage was increased to $7.25 from $6.55.

Since 2007, the United States has seen significant transformations when it comes to how Americans spend their money, and what on. As a whole, we are spending more money on housing, transportation and food. The question is, does our minimum wage need to change to reflect and support our new economic lifestyles? Let’s delve into the cons and pros of increasing the minimum wage.

Cons

While it may seem there is a straightforward solution to poverty, there are several reasons the government and a portion of the U.S. have held back on raising the minimum wage during the last 17 years. A higher minimum wage could affect small businesses, job opportunities and education.

Small businesses

A majority of businesses in the U.S. are considered small businesses. Starting and maintaining a business with minimal investments can be difficult. Small businesses are more likely to have higher production costs, making profit margins small. Increasing the minimum wage would add to the overhead cost of the business, resulting in many being forced to close due to a shortage in profit.

Loss of jobs

As a business, if you see one aspect that is eating up a large portion of your profit, the obvious answer would be to get rid of it, right? Exactly. That’s why raising the minimum wage may cause employers to start automating processes. For example, where you once saw cashiers at a grocery store, you now see self-checkout stations. This will eventually lead to fewer job opportunities.

Education

Furthering your education after primary school has long been considered important to landing a career that brings satisfaction and provides a livable wage. Unfortunately, studies show that when the minimum wage is increased, fewer people pursue a degree. This could be because tuition increased or they are captivated by the initial higher earnings and less education time.

Pros

While the cons may seem to outweigh the pros right now, there are some benefits to raising the minimum wage. The positive impacts include income equality, consumer spending and job satisfaction.

Income equality

Income inequality is an important issue our country currently faces. The top 0.1% of Americans have control over more wealth than all of America’s middle class, making the divide between the wealthy and poor even bigger. Raising the minimum wage would aid in closing that gap by giving the lower class a boost to their income.

Consumer spending

Have you ever received a bonus from work and instantly thought of the fun vacation you could go on or the fancy dinner you could have that weekend at your favorite restaurant? Increasing the minimum wage would have a similar effect on Americans. A good portion of Americans’ income goes toward wants. So, if we are bringing home more money, chances are product demand will increase.

Job satisfaction

Who doesn’t love a little extra money added to their paycheck every week? By increasing the minimum wage, employees will feel a sense of pride and appreciation from their employers, causing employees to be more loyal and satisfied with their jobs.

Raising the minimum wage is a controversial subject because there are good arguments for both sides. Should we increase the minimum wage and see the gap between the wealthy and poor shrink, consumer spending multiply and more people satisfied with their jobs? Or should we leave it where it’s at due to possible small businesses going under, loss of jobs and fewer people pursuing an education? Now that you have a better look from both sides, what do you think?

Lindsey Certonio is a project manager at Fullcast, a Silicon Slopes-based, end-to-end RevOps platform that allows companies to design, manage and track the performance of their revenue-generating teams.

Newsletter