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What are the positions on a minimum wage?
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Stagnant minimum wages have fueled inequality

Many economies' minimum wages have been relatively stagnant since the middle of the twentieth century. This has led to rampant inequality.


Over the past five decades, the cost of production has fallen dramatically. Productivity has more than doubled. Many products can be produced today for half the price they were in the middle of the twentieth century.

The Argument

Despite productivity increases and reduced production costs, the minimum wage in many economies has stagnated or even declined. This has fueled inequality as profits are funneled to shareholders and owners while workers experience stagnant wages. In the US, if the minimum wage had kept pace with increases in productivity by 2013 it would have stood at $18.30 an hour. Instead, it stood at $7.25 per hour.[1] As inflation increases, the same minimum wage has less purchasing power, so minimum wage workers become relatively poorer every year. As production efficiency increases, company owners receive more profits. However, if minimum wage workers still earn minimum wage, the gap between rich and poor is widened as the bottom earners remain the same and the top earners receive more and more.[2] Income inequality fueled by minimum wage stagnation forces millions globally to live in poverty, while the higher class citizens get richer. Raising the minimum wage will increase a person's earnings and decreases inequality.

Counter arguments

Raising the minimum wage actually increases inequality. When the minimum wage is raised, companies cannot afford to hire as many workers, so they lay off some. This leads to a rise in unemployment, and the ones becoming unemployed are those with the lowest income. This widens the income inequality gap because the wealthy stay in their position but the poor have an increased chance of becoming joblessness.



High levels of inequality are detrimental to society.


[P1] Productivity has increased at a faster rate than minimum wages. [P2] This has led to workers receiving a declining share of company profits. [P3] Therefore, stagnant minimum wages fuel inequality.

Rejecting the premises

[Rejecting P3] If the minimum wage was raised, companies would not be able to afford as many employees as before, so more people will become unemployed.


This page was last edited on Saturday, 11 Jul 2020 at 02:06 UTC

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