Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
positive and negative effects of minimum wage.
positive and negative effects of minimum wage.
higher unemployment linked to minimum wage raise.
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: positive and negative effects of minimum wage.
The current minimum wage, as set by federal law, is less than $15 per hour. Is this enough for any person to provide for themselves and their family? Laborers earning the minimum wage don't seem to think so and are wanting an increase in the required minimum wage so they will be paid more by their employers. The Bureau of Labor Statistics reported in 2015 that 3.6 million workers earned below or at the minimum wage ("Minimum Wage Workers"). At first it sounds wonderful for minimum wage workers to earn extra money and be able to make a better living, but what impact does an increase to the federal minimum wage have on the economy?
Citizens of the US in 1912 were concerned about employers turning their jobs into sweatshops by underpaying them for their labor services. It was important to the citizenry that a set standard for living be created through legislation. In 1912, states began creating their own minimum wage laws as a response, and by 1938 twenty-five states had some form of minimum wage laws in place ("Minimum Wage"). The federally regulated minimum wage was established per the Fair Labor Standards Act by the Roosevelt administration. This was but one part of the act and mandated every employer must pay their workers a federally set minimum amount for their labor services. In 1938, the minimum wage was set to $0.25 per hour. States were given the ability to set their own minimum wage laws as well. If the state regulated minimum wage exceeds the amount set by the federal government, then the state's legislation is applied for the citizens of that state.
Like most economic policies there are many concerns over the effects of what happens when the minimum wage is raised, inflation being one of the many...
... middle of paper ...
...e, all having influence on one another and changing because of one amended piece of legislation. The challenge becomes responsibly weighing the various effects of the change and making the best informed decision we can as a nation.
Works Cited
Mankiw, Gregory. Principles of Macroeconomics. 6th Ed. Mason, OH: South-Western Cengage Learning, 2012. Print.
"Minimum Wage." Gale Encyclopedia of American Law. Ed. Donna Batten. 3rd ed. Vol. 7. Detroit: Gale, 2010. 82-85. Gale Virtual Reference Library. Web. 18 Aug. 2015.
"Minimum Wage Workers Account for 4.7 Percent of Hourly Paid Workers in 2014." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 25 Mar. 2015. Web. 20 Aug. 2015.
Schmitt, John. Why Does the Minimum Wage Have No Discernible Effect on Employment? Rep. Center for Economic and Policy Research, 13 Feb. 2013. Web. 23 Aug. 2015.
The United States minimum wage is not indexed to inflation. Due to this fact, the purchasing power of minimum wage falls as the price of consumer goods increases. The current hourly minimum wage is set at $7.25, however many states do pay above this rate. One example of this is in Michigan, the current hourly minimum wage is $7.40. The last time a change occurred to raise minimum wage was in 2009. President Obama has put out a proposal that is designed to raise the federally required hourly minimum wage to $10.10 in 2015. The public opinion of this proposal is all over the board ranging from a positive outlook to a negative one. Some of the negative remarks are that it would dampen the economy and shrink the hiring done by small businesses. “The Household Survival Budget for the average New Jersey family of four is $58,500 and for a single adult is $25,368 in 2010. These numbers highl...
Should the minimum wage increase? Well, raising minimum wage both has the pros and cons. Still the fact that increasing the minimum wage nationwide would increase millions of workers’ earnings is deniable. I suppose that’s why some people advocates raising the minimum wage will grow the economy for everyone. In 2014, the president of the United States, Obama, called the current Congress to raise the national minimum wage, which proves that Obama is actually supports raising the minimum wage. ‘February 2014 Congressional Budget Office Report The Effects of a Minimum-Wage Increase on Employment and Family Income is the latest attempt to do so, in this response to Members of Congress with respect to an increase in the federal minimum wage from $7.25 to $10.10 per
Before other states jump on the $15 minimum-wage bandwagon, they might want to look at what's happening in Massachusetts — one of two states with a $10-an-hour minimum wage. Massachusetts increased the minimum wage from $8 to $9 at the start of 2015 and to $10 on the first day of 2016. The state is now mired in its longest stretch of net job losses since the recession, Labor Department data show. Minimum wage is the assured lowest amount of pay per hour that an employee can receive and it’s purpose is to make certain that employers are paying their workers fairly. The first minimum wage was created by Congress in 1938 as part of the Fair Labor Standards Act; it was twenty-five cents an hour. Since then, it has varied over the years, the highest being in 1968, but today it stands at $7.25 (Sherk). At the moment, Congress is contemplating the Fair Minimum Wage Act of 2013, which would, over two years, raise the minimum wage to $10.10 (GovTrack). However, raising the minimum wage is a bad idea because a majority of minimum wage jobs belong to teenagers who will not stay in the job very long and do not need to support a family, raising minimum wage will lessen the availability of jobs for the poor, and it is pointless since many of the impoverished that the raising of the minimum wage is targeted to help, will not be able to benefit.
Many people against raising the minimum wage create arguments such as, “it will cause inflation”, or, “ it will result in job loss.” Not only are these arguments terribly untrue, they also cause a sense of panic towards the majority working-class. Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has consistently increased, even when the wage has been
Throughout the decade, a continuous firing debate still remains, whether to raise the minimum wage or keep as it is. People believe that raising the minimum wage can hurt the economy. More will lose jobs than gain. Though all are true, the amount of poverty shown throughout the decades are jaw dropping. That is in fact one of the leading factors. As there is yin and yang, the demand for a higher minimum wage is no coincidence or selfishness as others perceive as is. The poverty shown throughout the decade is deadly prominent. Minimum wage should be raised as people are not gaining enough money compared to the past, despite with more education, too many low quality jobs, “in active” unemployment are outcasted from the statistics, and finding jobs is more difficult than it was decades ago.
The arguments for and against the minimum wage have been ongoing. On one hand, it’s simply a supply and demand issue. As prices (or wages) rise, the demand for that product (or labor) decreases—in other words, employers will simply stop or slow down their hiring. If the minimum wage increases too much, then it could even force some smaller firms out of business. Then even more people will be out of work. On the other hand, better paid employees could feel more motivation to increase their productivity. And increase in a company’s productivity could be high enough that, in order to keep up supply, it might need to hire even more employees. In this case, raising the minimum wage has increased employment.
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects.
Minimum wage was established state wide in 1938 by Franklin Delano Roosevelt; at that time it was only 25 cents which is equivalent to 4 dollars in today’s world. It was established as part of the Fair Labor Standards Act which covered youth, government and overtime pay. Massachusetts was actually the first state before Franklin’s statewide acknowledgement, and it only covered woman and children without overtime. There are lot of issues with minimum wage now such as setting a statewide minimum wage to $10.10, which does not benefit places were living is expensive such as in New York. It leads to an imbalance in different states’ economies, and the government setting price controls in wage has some issues.
Transition: Last year the federal minimum wage celebrated its 75th birthday last week as part of the federal 1938 Fair Labor Standards Act. The Act banned child labor, set a 44 hour maximum workweek, and guaranteed a minimum wage of 25 cents an hour. (Hitzik) Since then Congress has raised the rate 23 times. (USDOL)
Currently, in the United States, the federal minimum wage has been $7.25 for the past six years; however, in 1938 when it first became a law, it was only $0.25. In the United States the federal minimum wage has been raised 22 times since 1938 by a significant amount due to changes in the economy. Minimum wage was created to help America in poverty and consumer power purchasing, but studies have shown that minimum wage increases do not reduce poverty. By increasing the minimum wage, it “will lift some families out of poverty, while other low-skilled workers may lose their jobs, which reduces their income and drops their families into poverty” (Wilson 4). When increasing minimum wage low-skilled, workers living in poor families,
Congress created minimum wage with the Fair Labor Standards Act of 1938. The first minimum wage was only 25 centers per hour. Through history the minimum wage has increased a little at a time, umping a couple cents each time. The last time the United States changed the minimum wage was in 2007 which was a large jump from $5.15 per hour to $7.25 per hour. This jump of $2.10 was a large increase. Through the years it is evident that the minimum wage is constantly changing. “. It has averaged $6.60 an hour in purchasing power in 2013 dollars. But it has ranged from a low of $3.09 an hour in late 1948 to a high of $8.67 an hour in 1968(Sherk, J. (2013, June 25).
The first minimum wage was put in place by Congress in 1938 as part of the Fair Labor Standards Act. It was set at twenty-five cents. Since then minimum wage has continually fluctuated, and currently, it is $7.25, but Congress is now considering the Fair Minimum Wage Act (Whittner) which would, over the course of two years, raise minimum wage to $10.10 (Sherk). Adding almost three dollars to the United State’s minimum wage will most certainly have a large, positive impact on the nation. Congress should raise minimum wage because it would boost the economy, it would create jobs, and it would not be right to let people who work full time to live in poverty.
It is very difficult to live in America if you are living off of minimum wage, and many Americans are living off of it today. Raising minimum wages has its benefits like gaining more money to live better, but people do not see the down side of the increases in wages. With the increase in minimum wage, it also causes the cost of living to increase. How can this help the economy or help people? Minimum wages in America should not be increased because it will cause cost of living to increase, reduce employment, and cause businesses to lose money and workers.
Today the federal minimum wage is $5.15, but should be about $8.50 if Congress had adjusted it for inflation over the past 35 years. While $5.15 may not seen that bad, when factoring in such variables as sky rocketing gas prices, budgets can get pretty tight. David Shepard, a sophomore at Wayne State University, worked at a Meijer Retail and Grocery Superstore for over two years while in high school. At the time Shepard lived with his parents and didn’t have to worry about paying rent or buying groceries, all that he had to pay for was filling up his gas tank and paying for his car insurance. Shepard recalled, “It was all I could do to pay for the basics like gas and bill’s, I barely had any money to have fun on the weekends”. This is only an example of a high school student that can nearly slip by on minimum wage with only a few expenses. There are 1.8 million people in America with children under the age of 18 that would benefit from an increase in minimum wage (Minimum).
Pyke, Alan. "The Minimum Wage: Myths & Facts." Media Matters for America. N.p., 15 Feb. 2013. Web. 18 May 2014.