Effects of Minimum Wage on Poor Families
The federal minimum wage in the U.S. -- as of July 24, 2009 -- is $7.25 an hour, although in some states it is higher. There are multiple benefits and drawbacks to the minimum wage law, especially where poor families are concerned.
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Provides Income Security
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Having a minimum wage means that workers from poor families are protected by federal law from earning less than $7.25 an hour. This earned income is what feeds and provides shelter for poor families -- having a minimum income provides security for the family in knowing that they will not earn less as long as there is someone working.
Creates Unemployment
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A minimum wage, as it keeps increasing, can create more unemployment, as it is more costly for companies. For less skilled workers, their jobs could be on the line or become more competitive to keep; they may not even be hired at all if companies find the minimum wage too expensive to employ many people.
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Loss of Benefits
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The minimum wage was raised from $5.15 to $7.25 per hour between 2006 and 2009. As it was increased, employers became more reluctant to offer health benefits. For poor families, the just over $2 an hour difference hardly makes up for loss of health benefits, which can be extremely expensive. While the increase in the minimum wage may aid a family in terms of paying the rent and food, a medical emergency could jeopardize them even more.
Employer Expectations
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With a minimum wage, employers expect more from their employees. They might try to reduce costs by lowering the standards of work conditions or leave out employee training. For employees from poor families, this can cause a lot of strain, especially if they are lack education to find other employment.
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