The minimum wage has been at the heart of many economic debates in the past several years. Just recently, though, with President Biden’s proposal to more than double the current federal minimum wage to $15 an hour, the debate of whether the government should increase the minimum wage has been brought back to the forefront. Although the Biden Administration failed to pass the $15 minimum wage legislation through the 2021 COVID-19 relief bill, it’s still a topic worth discussing. In this article, I will address some of the popular arguments against the minimum wage made by the opposition.

A survey conducted by the Federal Reserve found that almost 40% of Americans cannot afford a surprise $400 expense out of pocket. That means that about 130 million citizens of one of the richest countries in the world cannot afford things like surprise car troubles, medical expenses, or home repairs. Based on the Economic Policy Institute’s (EPI) calculation, the average person in America would need to make $31,200 annually to achieve a “modest but adequate standard of living.” Someone working on $15 an hour would make an average of $30,600. Even in states with seemingly low housing and living costs, an increase in the minimum wage is necessary. For example, a single adult living in rural Missouri will have to be making $39,800 annually or $19 an hour to keep up with food, rent, and other basic costs of living. Not to mention, in large, expensive cities, the EPI expects that a single adult with no children will need to be making at least $28.70 an hour in New York, $24.06 In LA and $23.94 in Washington D.C. by 2025 in order to keep up with the increased costs of living. Even in less expensive southern cities like Fort Worth, Phoenix, and Miami, a $15 minimum wage would not cover the high cost of living.

Actually, a growing number of small businesses have begun to support the minimum wage hike. Across the country, business organizations, including Business for a Fair Minimum Wage and the American Sustainable Business Council, which represent thousands of small businesses, have come out in support of the $15 minimum wage. There is also evidence that the minimum wage has less of an effect on employment than we think. Research from the Center for Economic and Policy Research suggests higher wages have no discernible effect on employment. Rather than laying off workers, businesses tend to organize the work process or see their profits fall in order to adjust to new wages. In fact, after San Francisco raised its tipped minimum wage to $12.25 an hour in 2013, the city saw growth in the leisure and hospitality industry the following year. Additionally, there is strong evidence to suggest that as wages increase, employers tend to see lower rates of staff turnover and harder, more efficient work from employees. These two facts can eliminate costs for businesses and even compensate for higher wages. Additionally, there is evidence that an increase in the minimum wage supports economic growth. According to the Economic Policy Institute, a $15 minimum wage would result in $107 billion a year in higher wages. This means that more people would have more money to circulate through the economy.

Gradually increasing the minimum wage would increase pay for 32 million American workers. That’s 21% of the workforce. The EPI also estimates that 88% of workers who would benefit from a wage hike are at least 20 years old. So yes, a $15 minimum wage would increase the pay of high schoolers working summer jobs, but the vast majority of the recipients would be adults working to cover all of their expenses and costs of living. Additionally, a disproportionate number of minimum wage workers across the country are Black and Hispanic/Latino. A pay increase would serve to reduce the pay and wealth gap along gender and racial lines. According to the National Employment Law Project, as much as 31% of African Americans and 26% of Latinos would benefit from an increase in the minimum wage. Tightening this gap would aid in reducing the inequality running rampant throughout our country. Increasing pay for marginalized groups would also aid in spurring increased economic activity in historically marginalized areas of the country. Because many minimum wage workers tend to spend money within their communities, increasing their disposable income would bring heightened economic activity and job growth in these areas.