.
Adults who earn the lowest wages have other sources of income as well that include an earned income tax credit, food stamps and Medicaid. Also, "employers of domestic workers now fund social security pensions and more unemployment insurance – an additional 8 percent in compensation generally not offered in Truman's time" (Morici, 2014). Economic studies have shown that raising the minimum wage periodically to stay even with inflation will create little harm. On the other hand, what President Obama is proposing is an entirely different matter. As stated by Fox News, "congress last adjusted the federal standard in 2009. Since then, consumer prices are up 9 percent, but the president is proposing a 39 percent jump" (Morici, 2014). President Obama's politically motivated campaign will deny a sensible modification to the Federal Minimum Wage and will keep those earning the lowest wages from getting a raise because of this drastic increase. The truth behind the matter is a high school or college student who is making minimum wage at $7.25 an hour is not going to stay at the same minimum wage paying job whether or not it is making $7.25 an hour or $10.10 per hour.
Improving the cash flow, paying rent, managing costs on top of paying taxes is already challenging for small businesses. Small businesses look at the overall cost of an employee when hiring them which includes "life insurance, health care, savings plans, taxes, and so on. So what may seem like a minimal bump in an hourly wage on the surface is just another addition to an already big equation" (Alter, 2014). You also have to look at those who are already currently making more than minimum wage. Those who are making more are going to require a pay increase as well because they are not going to like making the same amount as someone who just started when they have been there for an extended period of time and have earned their higher pay rate.