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Is increase in minimum wages, a boon in the US?

New year has brought in good news for a few under-privileged Americans. Congress has proposed a rise from $7.25 to $10.10. A recent study shows that if the minimum wage in US rises as proposed, over 4.6 million people would rise above the poverty line. While this may be good news for so many, some show high displeasure from this proposal.

People who will get cut off

While this may pose a great opportunity for employees at better living conditions, it also poses a threat to the employers. Some say, they would avoid hiring part timers and unskilled labours if the wages increases as it may not be affordable to them when they can pay the skilled labour, the same wage and get work done in a better fashion.

 

Opposed by

The amendment has been opposed by many small scale and large scale businesses who hire maximum number of low-wage workers as their cost of business would increase manifolds. Some argue that making employees more expensive to hire who increase the number of unemployed workers.

To be benefitted by the raise

Residents of many states have voted for the raise to increase the living standards of millions of cooks, janitors, aides to the elderly and other low-wage workers. Even with the tax relief that have been implemented, a family with two kids which earns the minimum wage still lives below the poverty line. This single step would raise the incomes of millions of working families.

The White House said that the $1.75 increase in the minimum wage would be enough to offset roughly 10 to 20 percent of the increase in income inequality since 1980, though some economists argue that increase in minimum wages alone can’t reduce poverty as per www.nytimes.com. This step has been a major leap forward to reduce the gap between the rich becoming richer and poor becoming poorer.

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