Minimum Wage

Is there anything more rewarding that working a 16-hour day, picking up your kids from the corner where they beg for food, doing this for thirty years and then dropping dead? This sounds like hyperbole, but it is the reality for millions in the developing world, where without protections people cannot earn enough to pay for their own existence, much less that of their children. Some want America to look like that as well, a plutocracy where the fortunate enjoy the benefits of modern living while the less fortunate are lucky not to starve to death. This is not a good vision for a civilized society.

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Worker protections are integral to our overall well-being as a country. Thus, the minimum wage should not be abolished.

The social case for maintaining a minimum wage is clear. When people work hard, they deserve to be able to survive, and to take care of their families (Greene, 2013). The minimum wage as it stands barely does that, so any move to remove the minimum wage would eliminate this already-thin protection for America’s workers. By allowing people to feed and house their families with the fruits of their labor, the minimum wage creates a society where there is hope, if not for oneself but at least for one’s children, who would have the ability to stay in school rather than go to work, and thus have a chance at a better life. The minimum wage does little, but at least it provides a foundation on which a better life can be built. Rewarding people for the work they contribute is the least our society can do.

There is also a strong economic case for the minimum wage (Romer, 2013). Some would argue that competition for workers keeps wages high, so there is no necessity for a minimum wage. This is a false argument for two reasons. The first is that in many businesses the competition for workers is global. Americans cannot work at Chinese wages. We do not have 25 cent lunches on the street corner or $75/month apartments. There are inherently inequities among costs in different countries, so the wages cannot be set to a global scale. No American would work for Third World wages, so those jobs would be lost to the Third World. Additionally, the idea that competition for workers would keep wages high assumes that workers have the mobility to seek better opportunities. This is not always the case, especially when one has a mortgage that is underwater, or sick parents to look after. Workers lack the mobility needed to make such a system work.

There is another economic argument in favor of the minimum wage. The free market can only efficiently set wages when there is a balance of bargaining power between employers and employees. However, while employers are keenly aware of the job markets not only in a given city but anywhere in the world, they hold the balance of bargaining power. Minimum wage workers, often the least-educated among us — do not have sufficient information about the position, the state of jobs markets around the world or even the value of their own skills, to bargain effectively with a large company. The company can also allow a position to go unfilled for a time to increase its leverage; the unskilled worker would starve trying to stall for a higher wage. This again invalidates the argument that the free market can set wages effectively — it cannot given the imbalance of bargaining power between workers and businesses. The minimum wage serves a specific economic role of balancing the bargaining power between workers and businesses.

One must also take into consideration the effect that the minimum wage has on the overall economy, and what would change if the minimum wage was abolished. By providing workers with a guaranteed living wage, the minimum wage ensures that they are able to purchase goods and services. Without a living wage, they would not purchase to the same level. If the minimum wage was abolished, companies would not lower the prices to reflect lower costs; rather, they would pocket the difference. Thus, the economy would lose consumer purchasing power and it would not be offset with lower prices. Whatever case there might be for not establishing a minimum wage in the first place, clearly once it is in place it should be maintained to avoid such negative economic consequences.

There are arguments on both sides of the minimum wage debate. However, for both social and economic reasons, the minimum wage should be maintained. The case for abolishing the minimum wage rests on economic orthodoxy that simply does not withstand real world scrutiny. Socially, America is a better country when its children have the opportunity to focus on education, rather than supplementing household income, a fate that children in countries where there is no minimum wage suffer. Additionally, knowing that one’s work is rewarded enough to feed one’s family enhances the social order and feelings of well-being. Beyond the social arguments, the economic case for the minimum wage is just as strong. The minimum wage serves to balance the bargaining power between corporations and workers, and to avoid having American workers get into competitions for lower wages with Third World countries, competitions Americans simply cannot win with the higher cost of living in our country. Abolishing the minimum wage would have direct negative consequences for the economy as well, with an erosion of consumer buying power and little corresponding deflation or business investment to counterbalance that erosion. Undertaking a policy that harms American workers, lowers the GDP, and places the U.S. into direct competition with nations whose markets operate according to different standards is not recommended. Instead, to promote a stronger U.S. economy both today and in the future, and to ensure a socially-just country for all Americans, the minimum wage should not be abolished.


Greene, B. (2013). What if there were no minimum wage? CNN. Retrieved March 5, 2013 from

Romer, C. (2013). The business of the minimum wage. New York Times. Retrieved March 5, 2013 from