Bus 626 week1 D2

In order to participate in a knowledgeable debate, you must have a firm understanding of each side of the issue. Your textbook discusses minimum wage in detail and like many traditional economists, for the most part, does not support increases in the United States minimum wage citing the negative impacts that such increases may create. Research at least two scholarly and/or credible resources. Use factual information; do not simply document or restate opinion.Write an essay post that either supports or does not support an increase in minimum wage. Be sure to use economist lingo and include facts that support your response with at least two scholarly and/or credible resources.

I support raising the minimum wage because it would stimulate consumer spending, help businesses’ bottom lines and grow the economy. A modest increase, in particular, would improve worker productivity and reduce employee turnover and absenteeism in firms across the country without hurting American companies.

Studies show that raising the minimum wage increases worker productivity, which translates to high-quality service from firms (Jayachandran, 2020; Ku, 2020). Critics of this proposal would argue that it would increase labor costs. However, Ku notes that in response to as little as a 6% increase in the minimum wage, worker productivity increases by about 4.6% in the bottom 40th percentile relative to the higher percentiles. Thus, the productivity increase driven by better wages could mitigate the higher labor costs associated with a higher minimum wage. It would also reduce turnover and absenteeism, saving companies unnecessary turnover costs (Bucila & Simon, 2010). All these changes would promote U.S. economic growth by increasing the labor force.

Against the arguments from most critics of raising the minimum wage, studies show that it has no discernible negative effect on employment. In a previous survey, Lemos (2008) found that the minimum wage does not impact too many jobs and does not raise prices too much. Some would argue that even this negligible effect is a concern. But, my view is that the benefits outweigh the drawbacks. There are documented benefits in those states that have raised their minimum wage. For instance, a study conducted in Arizona found that a 1% increase in the minimum wage led to a 1.13% increase in the state’s per capita income (Overstreet, 2021). Therefore, we should raise the minimum wage to benefit U.S workers, particularly the low-wage workers, and the additional worker income will get injected back into the economy to encourage a vicious cycle of greater demand for American goods and services.


Bucila, L., & Simon, C. J. (2010). Minimum Wages, Sickness Absenteeism, and Non-Sickness Absenteeism. Sickness Absenteeism, and Non-Sickness Absenteeism (April 12, 2010).

Jayachandran, S. (2020, June 18). How a Raise for Workers Can Be a Win for Everybody. The New York Times. https://www.nytimes.com/2020/06/18/business/coronavirus-minimum-wage-increase.html

Ku, H. (2020). Does Minimum Wage Increase Labor Productivity? Evidence from Piece Rate Workers. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3628244

Lemos, S. (2008). A SURVEY OF THE EFFECTS OF THE MINIMUM WAGE ON PRICES. Journal of Economic Surveys, 22(1), 187–212. https://doi.org/10.1111/j.1467-6419.2007.00532.x

Overstreet, D. (2021). Is Minimum Wage an Effective Anti-Poverty Tool? Journal of Poverty, 1–12. https://doi.org/10.1080/10875549.2020.1869660

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