Federal Minimum Wage - Essay Example

In February the U.S government faced opposition because it planned to raise the minimum wage. The opposition is based on the fears that a higher wage will make the labor sector uncompetitive. Opponents of the government’s increase of the minimum wage argue that raising the minimum wage will reduce the competitiveness of the U.S economy. Legislators are reluctant to support the government’s increase of the minimum wage because unemployment is still high at 9 percent (Neumark and William 27).

In my opinion, the government plays a crucial role in passing legislation that increases the minimum wage. The government performs a fundamental economic and social role by raising the minimum wage. The process stimulates the economy by boosting consumer spending that supports 70 percent of economic activities. Increased consumer spending jumpstarts production and re-hiring. Raising the minimum wage boosts disposable income that will be spent on local businesses. By raising the minimum wage to $10.

10 dollars, the government is likely to generate $22 billion through new economic activities (Neumark and William 35). A high minimum wage has the potential of building sustainable economic activities and societies without the need to increase costs for taxpayers.