The minimum wage in the United States of America has been the subject of heated debate for decades. The ability of workers to secure a job that pays a living wage is a controversial issue that many people feel passionate about. In Kentucky, the current minimum wage rate is $7.25 per hour, but the state’s rate is set to change in 2023. This essay will discuss the economic impacts of raising the minimum wage in Kentucky, the effects on businesses and employees, and other relevant issues.
Raising the minimum wage to $15.00 an hour in Kentucky is estimated to benefit about 1.4 million workers by 2023. This increase will provide a much-needed influx of wages for the working families that struggle to make ends meet. As wages increase, the number of working individuals in poverty decreases. According to research done by the Economic Policy Institute, the proposed wage increase would set a “solid floor for wages” and would generate approximately $2.2 billion in additional wages across the state. Additionally, such an increase in wages is deemed to lift more than 122,000 workers out of poverty by 2023.
However, businesses that are currently struggling in the pandemic economy are expected to suffer if a drastic wage increase is put into action. Profit margins are already low due to the economic downturn, and raising the wage may increase the cost of production and lead to job cuts. Additionally, some business owners have already expressed concerns about the unmanageable costs associated with increasing wages, as well as their ability to compete with competitors located in nearby states where the wage increase may not be enacted.
The consequences of a wage increase present additional considerations beyond economics. There could be an increase in the cost of living associated with the increase in wages, as more money is invested in higher-cost items such as rent and groceries. As a result, individuals may not end up with more disposable income in the long run. Furthermore, employers may be less willing to provide fringe benefits such as health care and retirement plans and instead focus on keep wages as low as possible.
In conclusion, there are many arguments to be made on both sides of the minimum wage debate in Kentucky. The proposed state minimum wage is likely to provide an economic improvement for workers in the state, but business owners may struggle as a result. A comprehensive analysis of the consequences of the proposed change should be conducted in order to reach an informed decision for the future of workers and businesses in Kentucky.
