ENC1102 TCC How Increase in Minimum Wage Increases Poverty Rhetorical Analysis Include at least one direct quote from the primary source but no more than
ENC1102 TCC How Increase in Minimum Wage Increases Poverty Rhetorical Analysis Include at least one direct quote from the primary source but no more than three direct quotes. Include a Work Cited section at the end of your paper. Do not write in second person (e.g., you, your, imperative sentences).Length: 3-5 pagesOther reminders: Font Times Roman / Size 12; Double Spaced; Include Page Numbers (top right corner of page); and NO COVER PAGE. How Minimum Wage Laws Increase Poverty
Poverty in America, 2015
From Opposing Viewpoints in Context
George Reisman is professor emeritus of economics at Pepperdine University in southern California
and the author of Capitalism: A Treatise on Economics.
Raising the minimum wage would not help reduce poverty. In fact, it would have the opposite
effect because it would victimize the country’s lowest-skilled workers and make it more difficult
for them to find employment for which they are qualified. Raising the minimum wage will make
lower-end jobs more attractive to people with greater education and skills who may not have
considered them before at a lower pay scale. Those better-skilled and educated workers will
outcompete unskilled workers for jobs, further worsening the poverty of the least-skilled
workers and forcing them out of the labor pool. Raising the minimum wage would create more
poverty, not reduce it.
Raising the minimum wage is a formula for causing unemployment among the least-skilled members
of society. The higher wages are, the higher costs of production are. The higher costs of production
are, the higher prices are. The higher prices are, the smaller are the quantities of goods and services
demanded and the number of workers employed in producing them. These are all propositions of
elementary economics that you and the President should well know.
It is true that the wages of the workers who keep their jobs will be higher. They will enjoy the benefit of
a government-created monopoly that excludes from the market the competition of those unemployed
workers who are willing and able to work for less than what the monopolists receive.
The payment of the monopolists’ higher wages will come at the expense of reduced expenditures for
labor and capital goods elsewhere in the economic system, which must result in more unemployment.
Those who are unemployed elsewhere and who are relatively more skilled will displace workers of
lesser skill, with the ultimate result of still more unemployment among the least-skilled members of
society.
The higher the minimum wage is raised, the worse are the effects on poor people.
The unemployment directly and indirectly caused by raising the minimum wage will require additional
government welfare spending and thus higher taxes and/or greater budget deficits to finance it.
Your and the President’s policy is fundamentally anti-labor and anti-poor people. While it enriches
those poor people who are given the status of government-protected monopolists, it impoverishes the
rest of the economic system to a greater degree. It does this through the combination both of taking
away an amount of wealth equal to the monopolists’ gains, and of causing overall production to be less
by an amount corresponding to the additional unemployment it creates. The rise in prices and taxes
that results from raising the minimum wage both diminishes the gains of the monopolists and serves to
create new and additional poor people, while worsening the poverty of those who become
unemployed.
The Minimum Wage Hurts the Poor
Furthermore, the higher the minimum wage is raised, the worse are the effects on poor people. This is
because, on the one hand, the resulting overall unemployment is greater, while, on the other hand, the
protection a lower wage provides against competition from higher-paid workers is more and more
eroded. At today’s minimum wage of $7.25 per hour, workers earning that wage are secure against the
competition of workers able to earn $8, $9, or $10 per hour. If the minimum wage is increased, as you
and the President wish, to $10.10 per hour, and the jobs that presently pay $7.25 had to pay $10.10,
then workers who previously would not have considered those jobs because of their ability to earn $8,
$9, or $10 per hour will now consider them; many of them will have to consider them, because they
will be unemployed. The effect is to expose the workers whose skills do not exceed a level
corresponding to $7.25 per hour to the competition of better educated, more-skilled workers presently
able to earn wage rates ranging from just above $7.25 to just below $10.10 per hour. The further effect
could be that there will simply no longer be room in the economic system for the employment of
minimally educated, low-skilled people.
The Standard of Living
Of course, the minimum-wage has been increased repeatedly over the years since it was first
introduced, and there has continued to be at least some significant room for the employment of such
workers. What has made this possible is the long periods in which the minimum wage was not
increased. Continuous inflation of the money supply and the rise in the volume of spending and thus in
wage rates and prices throughout the economic system progressively reduce the extent to which the
minimum wage exceeds the wage that would prevail in its absence. The minimum wages of the 1930s
and 1940s25¢ an hour and 75¢ an hourlong ago became nullities. To reduce and ultimately
eliminate the harm done by today’s minimum wage, it needs to be left unchanged.
If your goal is to raise the wages specifically of the lowest-paid workers, you should strive to
eliminate everything that limits employment in the better-paid occupations.
The standard of living is not raised by arbitrary laws and decrees imposing higher wage rates, but by
the rise in the productivity of labor, which increases the supply of goods relative to the supply of labor
and thus reduces prices relative to wage rates, and thereby allows prices to rise by less than wages
when the quantity of money and volume of spending in the economic system increase.
If raising the standard of living of the average worker is your and the President’s goal, you should
abandon your efforts to raise the minimum wage. Instead, you should strive to eliminate all
government policies that restrain the rise in the productivity of labor and thus in the buying power of
wages.
Too Many Regulations
If your goal is to raise the wages specifically of the lowest-paid workers, you should strive to eliminate
everything that limits employment in the better-paid occupations, most notably the forcible imposition
of union pay scales, which operate as minimum wages for skilled and semi-skilled workers. In causing
unemployment higher up the economic ladder, union scales serve to artificially increase the number of
workers who must compete lower down on the economic ladder, including at the very bottom, where
wages are lowest. To the extent that occupations higher up could absorb more labor, competitive
pressure at the bottom would be reduced and wages there could rise as a result.
Abolishing or at least greatly liberalizing licensing legislation would work in the same way. To the
extent that larger numbers of low-skilled workers could work in such lines as driving cabs, giving
haircuts, or selling hot dogs from push carts, the effect would also be a reduction in competitive
pressure at the bottom of the economic ladder and thus higher wages there.
The principle here is that we need to look to greater economic freedom, not greater government
intervention, as the path to economic improvement for everyone, especially the poor.
Further Readings
Books
Sasha Abramsky The American Way of Poverty: How the Other Half Still Lives. New York: Nation,
2013.
Peter Edelman So Rich, So Poor: Why It’s So Hard to End Poverty in America. New York: New
Press, 2012.
Barbara Ehrenreich Nickel and Dimed: On (Not) Getting By in America, 10th ed. New York:
Picador, 2011.
George Gilder Wealth and PovertyA New Edition for the Twenty-First Century . Washington, DC:
Regnery, 2012.
John Iceland Poverty in America: A Handbook. Berkeley, CA: University of California Press, 2013.
Woody Klein American Poverty: Presidential Failures and a Call to Action. Washington, DC:
Potomac, 2013.
Sandra Morgen, Joan Acker, and Jill Weigt Stretched Thin: Poor Families, Welfare Work, and
Welfare Reform. Ithaca, NY: Cornell University Press, 2009.
Sendhil Mullainathan and Eldar Shafir Scarcity: Why Having Too Little Means So Much. New York:
Times Books, 2013.
Nina Munk The Idealist: Jeffrey Sachs and the Quest to End Poverty. New York: Doubleday, 2013.
Kathleen Pickering et al. Welfare Reform in Persistent Rural Poverty: Dreams, Disenchantments,
and Diversity. University Park, PA: Penn State University Press, 2011.
Stephen Pimpare A People’s History of Poverty in America. New York: New Press, 2008.
Gary Rivlin Broke, USA: From Pawnshops to Poverty, Inc.How the Working Poor Became Big
Business. New York: HarperCollins, 2010.
Kristin S. Seefeldt and John D. Graham America’s Poor and the Great Recession. Bloomington, IN:
Indiana University Press, 2013.
Periodicals and Internet Sources
Sasha Abramsky “The Other America, 2012: Confronting the Poverty Epidemic,” Nation, April 25,
2012.
Sasha Abramsky “Why We Need a New War on Poverty,” Nation, January 8, 2014.
Maryam Adamu “Dignified Jobs and Decent Wages: The Next 50 Years of Civil Rights and
Economic Justice,” Center for American Progress, July 2014. www.americanprogress.org.
Karl Alexander and Linda Olson “Urban Poverty, in Black and White,” CNN, July 11, 2014.
www.cnn.com.
Sylvia A. Allegretto and Steven C. Pitts “To Work with Dignity: The Unfinished March Toward a
Decent Minimum Wage,” Economic Policy Institute, August 26, 2013. www.epi.org.
Emily Badger “How Poverty Taxes the Brain,” City Lab, August 29, 2013. www.citylab.com.
Dean Baker “Poverty: The New Growth Industry in America,” Huffington Post, August 29, 2012.
www.huffingtonpost.com.
Pooja Bhatia “A Tale of Two Cities: Mixing the Urban Poor Into a Rich Urban Life,” National Public
Radio, July 1, 2014. www.npr.org.
Josh Bivens et al. “Raising America’s Pay: Why It’s Our Central Economic Policy Challenge,”
Economic Policy Institute, June 4, 2014. www.epi.org.
Elizabeth Blair “In Confronting Poverty, ‘Harvest of Shame’ Reaped Praise and Criticism,” National
Public Radio, May 31, 2014. www.npr.org.
Charles M. Blow “Paul Ryan, Culture and Poverty,” New York Times, March 21, 2014.
Alyssa Brown “With Poverty Comes Depression, More than Other Illnesses,” Gallup, October 30,
2012. www.gallup.com.
Philip Bump “The Source of Black Poverty Isn’t Black Culture, It’s American Culture,” Wire, April 1,
2014. www.thewire.com.
Happy Carlock “A Different Type of PovertyJournalist Sasha Abramsky Looks at What It Means
to Be Poor in America,” U.S. News & World Report, September 5, 2013.
Zoë Carpenter “Eighty-Six Percent of Americans Think the Government Should Fight Poverty,”
Nation, January 7, 2014.
James Cersonsky “What a Real ‘War on Poverty’ Looks Like,” Nation, January 3, 2013.
Sally J. Clark “Why Seattle Raised Our Minimum Wage, and Why America Should Too,” CNN,
June 3, 2014. www.cnn.com.
Patricia Cohen “‘Culture of Poverty’ Makes a Comeback,” New York Times, October 17, 2010.
Neal Conan “Reconsidering the ‘Culture Of Poverty,'” Talk of the Nation, October 20, 2010.
www.npr.org.
Matt Cover “Study: More than Half a Trillion Dollars Spent on Welfare but Poverty Levels
Unaffected,” CNS News, June 25, 2012. http://cnsnews.com.
Sheldon Danziger and Christopher Wimer “The Poverty and Inequality Report,” Stanford Center on
Poverty and Inequality, 2014. http://web.stanford.edu.
Drew Desilver “Who’s Poor in America? 50 Years into the ‘War on Poverty,’ a Data Portrait,” Pew
Research Center, January 13, 2014. www.pewresearch.org.
Jeffrey Dorfman “The Minimum Wage Debate Should Be About Poverty Not Jobs,” Forbes,
February 22, 2014.
James A. Dorn “Poor Choices,” Baltimore Sun, September 27, 2011.
Elizabeth Drew “The Republicans’ War on the Poor,” Rolling Stone, October 24, 2013.
Economist “Towards the End of Poverty,” June 1, 2013.
Peter Edelman “The State of Poverty in America,” American Prospect, June 22, 2012.
http://prospect.org.
Peter Edelman “Poverty in America: Why Can’t We End It?” New York Times, July 28, 2012.
Thomas B. Edsall “Making Money Off the Poor,” New York Times, September 17, 2013.
Pam Fessler “One Family’s Story Shows How the Cycle of Poverty Is Hard to Break,” National
Public Radio, May 7, 2014. www.npr.org.
Pam Fessler “The Changing Picture of Poverty: Hard Work Is ‘Just Not Enough,'” National Public
Radio, May 7, 2014. www.npr.org.
Pam Fessler “Rep. Ryan Unveils His Anti-Poverty Plan, a Rebuke to LBJ Programs,” National
Public Radio, July 24, 2014. www.npr.org.
Paul Gorski “The Myth of the Culture of Poverty,” Educational Leadership, April 2008.
www.ascd.org.
Susan Greenbaum “Debunking the Pathology of Poverty,” Aljazeera America, March 26, 2014.
http://america.aljazeera.com.
Terry Gross “Turning Poverty into a Multibillion-Dollar Industry,” Fresh Air, June 7, 2010.
www.npr.org.
Ron Haskins “To Tackle Poverty, We Need to Focus on Personal Responsibility,” New York Times,
January 5, 2014.
Joshua Holland “Think Tank Report Says Poor Americans Have It Too Good,” Moyers and
Company, August 21, 2013. http://billmoyers.com.
Sally Kohn “Exploiting Poverty Caused the Financial Crisis,” Huffington Post, September 18, 2008.
www.huffingtonpost.com.
Paul Krugman “On Fighting the Last War (on Poverty),” New York Times, January 8, 2014.
Helen F. Ladd and Edward B. Fiske “Class Matters. Why Won’t We Admit It?” New York Times,
December 11, 2011.
Les Leopold “America’s Greatest Shame: Child Poverty Rises and Food Stamps Cut While
Billionaires Boom,” Huffington Post, November 8, 2013. www.huffingtonpost.com.
Leonard Lopate “Strapped: A Look at Poverty in America,” WNYC, 2014. www.wnyc.org.
Annie Lowrey “House Budget Committee to Hold Hearing on Poverty,” New York Times, April 30,
2014.
Jennifer Ludden “To Break Cycle of Child Poverty, Teaching Mom and Dad to Get Along,” National
Public Radio, July 8, 2011. www.npr.org.
Lisa Mascaro “Rep. Paul Ryan Calls for Cuts in Anti-Poverty Programs,”Los Angeles Times, March
3, 2014.
National People’s Action “Profiting from Poverty: How Payday Lenders Strip Wealth from the
Working Poor for Record Profits,” January 2012. http://npa-us.org.
Pedro Noguera “Bolder, Broader Strategy to Ending Poverty’s Influence on Education,” Huffington
Post, December 2, 2011. www.huffingtonpost.com.
Toluse Olorunnipa and Elizabeth Campbell “Ferguson Unrest Shows Poverty Grows Fastest in
Suburbs,” Bloomberg, August 18, 2014. www.bloomberg.com.
Jay Parini “What Jesus Knew About Income Inequality,” CNN, August 21, 2014. www.cnn.com.
Harold Pollack “Being Poor Changes Your Thinking About Everything,” Washington Post,
September 13, 2013.
President’s Council of Economic Advisers “The War on Poverty 50 Years Later: A Progress Report,
” The White House, January 2014. www.whitehouse.gov.
Barbara Raab “‘Nursery School Dropouts’: Poverty as a Health Crisis for Many of America’s Kids,”
NBC News, September 6, 2013. www.nbcnews.com.
Len Ramirez “San Jose Leaders Look to Build ‘Pods,’ ‘Microhouses’ to Shelter the Homeless,”
KCBS, April 29, 2014. http://sanfrancisco.cbslocal.com.
Robert Rector “Strange Facts About America’s ‘Poor,'” National Review Online, September 13,
2011. www.nationalreview.com.
Gary Rivlin “Fat Times for the Poverty Industry,” Atlantic, June 9, 2010.
Gary Rivlin “America’s Poverty Tax,” Daily Beast, September 8, 2011. www.thedailybeast.com.
Avik Roy “On Labor Day 2013, Welfare Pays More than Minimum-Wage Work in 35 States,”
Forbes, September 2, 2013.
Joseph J. Sabia “Minimum Wages: A Poor Way to Reduce Poverty,” Cato Tax and Budget Bulletin,
March 2014. www.cato.org.
Rachel Sheffield “More Government Welfare Doesn’t Equal Poverty Relief,” Daily Signal, April 12,
2012. http://dailysignal.com.
Elizabeth Shell “How the US Compares on Income Inequality and Poverty,” PBS, June 19, 2014.
www.pbs.org.
Matthew Spalding “Why the US Has a Culture of Dependency,” CNN, September 21, 2012.
www.cnn.com.
Michael D. Tanner “War on Poverty at 50Despite Trillions Spent, Poverty Won,” Cato Institute,
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Oliver Thomas “A Poverty, Not Education, Crisis in US,” USA Today, December 10, 2013.
Linda Walther Tirado “Why I Make Terrible Decisions, or, Poverty Thoughts,” Huffington Post,
October 22, 2013. www.huffingtonpost.com.
US House of Representatives Budget Committee “The War on Poverty: 50 Years Later,” March 3,
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Sadhbh Walshe “Banking While Poor: How Banks Profit from Predatory Payday Lending,”
Guardian, February 2013.
Hilary Wething “Fixing the Gender Wage Gap Is a Crucial Step for Women, but Not the Only Step,”
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Christopher Wimer et al. “Trends in Poverty with an Anchored Supplemental Poverty Measure,”
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World Hunger Education Service “Hunger in America: 2013 United States Hunger and Poverty
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Tim Worstall “If the US Spends $550 Billion on Poverty How Can There Still Be Poverty in the US?”
Forbes, September 9, 2012.
John Ydstie “The Merits of Income Inequality: What’s the Right Amount?” National Public Radio,
May 18, 2014. www.npr.org.
Matthew Yglesias “Bad Decisions Don’t Make You Poor, Being Poor Makes for Bad Decisions,”
Slate, September 3, 2013. www.slate.com.
Full Text: COPYRIGHT 2015 Greenhaven Press, a part of Gale, Cengage Learning.
Source Citation
Reisman, George. “How Minimum Wage Laws Increase Poverty.” Poverty in America,
edited by Tamara Thompson, Greenhaven Press, 2015. At Issue. Opposing
Viewpoints in Context, db28.linccweb.org/login?url=http://link.galegroup.com/apps/
doc/EJ3010960215/OVIC?
u=lincclin_tcc&xid=6870c5c5. Accessed 17 Jan. 2017. Originally published in Mise
s Daily, 4 Apr. 2014.
Gale Document Number: GALE|EJ3010960215
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