The minimum wage increase took effect on July 1, 2022, allowing residents working in Chicago and South Cook County areas to receive higher pay and providing a better environment for themselves and their families. However, as communities suffer due to high consumer goods prices, will the minimum wage increase be enough as costs continue to increase substantially?
What Is a Recession and How Does It Reflect Today?
Gas prices, groceries, and consumer goods continue to rise in communities. This financial crisis reflects the start of a recession to come in 2022. Older Americans have already experienced a recession. However, for new adults living through a recession and a worldwide pandemic, the experience can be overwhelming.
A recession is a temporary economic value decline during which trade and industrial activity decrease. Aside from price increases, unemployment rates have seen significant growth over the past year, reflecting the first stage of the recession. As a result, production is lower, and jobs have fewer positions available due to decreased trading activity. As a result, companies are forced to lay off their employee, as experts believe this will be a long-term issue in the United States.
History of Recessions in the US
The Balance author Kimberly Amadeo addressed the history of recessions in the U.S. and how they are natural to the economy. “The history of recessions in the United States shows that they are natural though painful, part of the business cycle. The National Bureau of Economic Research determines when a recession starts and ends.”
Research shows the United States has entered 13 recessions since the Great Depression ended in 1933. Since 1948, there have been 11 recessions, an average of one every six years.
Before 2007, an average recession lasted about 11 months compared to 18 months during the Great Depression. Recessions differ from an economic depression which causes more significant damage to the economy and lasts longer than a recession.
Maintaining Life During a Recession
As the world continues to social distance, COVID-19 is the main contributor to the next great recession seen today. Experts predicted that many jobs would lose employees during the initial spread of COVID-19.
Like most recessions, lower-income families were more significantly impacted by the COVID-19 recession. As a result, the economy required access to unemployment insurance, services to support businesses, and short-term financial assistance for families during this crisis.
Living in a Low-Wage Economy
For the economy to thrive, America depends heavily on its workers and businesses. Without employees, companies would have no way of running sufficiently or promising families with the stability to provide for their households.
Before the minimum wage increase, 40% of American workers earned less than $15 an hour. In addition, at least 24% did not have paid sick leave, 45% had inadequate health insurance, and few had paid family leave to care for a chronically ill family member, according to The Center for Employment Equity.
The United States federal minimum of $7.25 per hour was set in 2009: Increasing this amount would benefit some but not everyone, as some low-wage workers might experience coming out of poverty while others could become jobless.
A Word From Residents
Kelsey, an Evergreen resident, said, “$15 an hour shows us that they are listening, but with prices of gas and groceries being so high, $15 may not be enough. We still have little money left that won’t stretch into the next two weeks.”
“I’ve been working since the age of 15, and I can say from $7.25 to $15 an hour is a huge change, but because prices have become so high, it’s hard to feel relief knowing that even $15 won’t even accommodate half of what $7.25 could provide.”
For Kelsey and many others, the minimum wage increase is an improvement. However, real progress begins with managing the cost of consumer goods.
Although the rise in the minimum wage is the start of something big, America has entered its 12th recession while trying to maintain a global pandemic. Residents may have to sacrifice due to the poor decisions of the American government.
Written by China Page
Sources:
The Balance: History of Recessions in the United States; by Kimberly Amadeo
ABC 7 News: Chicago, Cook County minimum wage increases take effect; by Jason Knowles and Ann Pistone
UMass Amherst: The COVID-19 Recession: An Opportunity to Reform our Low Wage Economy? By Donald Tomaskovic-Devey, Rodrigo Dominguez-Villegas & Eric Hoyt
J.P. Morgan: Could inflation finally be peaking? By Joe Seydl
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