"If we took away the minimum wage, we could wipe out unemployment completely because we would be able to offer jobs at every possible skill level."
-- Michele Bachmann
Proponents of raising the minimum wage claim that if the minimum wage was raised, then many economic and social problems would be alleviated. This contention is at odds both with economic principles and years of creditable research. The effect of raising or even having a minimum wage has been studied extensively and the majority of studies have proven that raising a minimum wage does not have the desired effect. Both micro and macroeconomic forces affect the results of raising the minimum wage. The secondary effects of raising the minimum wage are bad both for individuals and the economy as a whole.
The effect of raising the minimum wage reduces employment based on the principle of supply and demand. The greater the cost of a good or service the less demand there will be for that good or service. This principle has been shown to true for labor as well. If the price of labor is free to move based on market forces, hourly pay and compensation will match desire of workers to work (supply of labor) and the desire of employers to hire them (demand for labor). Productivity of the workers combined with the availability of workers, determines what employers are willing or able to pay for labor.
Few of the full time working labor force are affected by the minimum wage. This is often the case because their productivity, therefore their pay, is al¬ready well above it. The law of demand says that the higher the price of a good or service, less is demanded; this is true for computers, televisions, and steaks as well as labor. Because the raise in minimum wage ...
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Many opponents of raising the federal minimum wage argue that it would cause jobs to be lost. Studies show, they have a point. Raising the minimum wage
Most people do not dream of working the rest of their lives on minimum wage, but this is the harsh reality for many Americans. Minimum wage was set for workers, so they will not get under paid. Over the recent years, people are wanting to increase the minimum wage to put more money in their budget. That it will help bring people out of poverty and into a middle class citizen. Thus, this might be possible, but many say not without some serious consideration. There will be many consequences with increasing minimum wage. Although increasing minimum wage will give workers more money, minimum wage should not be increased because it will increase prices, cut jobs, and hurt national budget.
In this article, James Dorn and David Cooper argue whether raising the federal minimum wage will help or hurt low-wage workers. James Dorn, Vice President of Academic Affairs at the Cato Institute, argues that raising the federal minimum wage would hurt low-wage workers by reducing job opportunities and raising prices. Dorn also states that the federal minimum wage is responsible for high unemployment among teenagers and minorities and lower productivity among low-wage workers. David Cooper, an analyst from the Economic Policy Institute, argues that the federal minimum wage is not a living wage and that raising the minimum wage doesn’t have a significant effect on employment. Cooper also states that eighty percent of low-wage workers are at least twenty years old and that eighty-five percent of small businesses already pay their employees more than the minimum
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.
Raising the minimum wage will have a positive effect on business. An abundant amount of companies believe that increasing the minimum wage would decrease gender inequality in the work area. As supported by Jason Furman, ("Minimum Wage - ProCon.org."), “ [it] is one of the important [reasons]... for inequality at the bottom.” Another reason it would aid business is that it will decrease turnover and increase productivity in the workarea. Researches have concluded that increasing the minimum wage will make employees work harder to keep their job. For example, in the fashion industry, if workers were paid more, it would result in a faster increase in production. Right now fashion is changing at a rate faster than what the companies can provide. By increasing the minimum wage, it would help companies to keep up with the fast pace
Raising the pay for minimum wage workers will be the proper way to create effective results, yet there exists those who oppose an increase. Neal Asbury, an American entrepreneur, writes “Raising the Minimum Wage Brings Minimum Benefits” to express how a hike in wages will increase unemployment levels. The author introduces a survey done in 1992 regarding economists’ beliefs towards an increase in minimum wage, where 72 percent claim it would hurt unemployment levels (Asbury). According to this claim, more than half of economists argue that if a rise in minimum wage is to occur, unemployment will soar among the country. Businesses will be prone to lay off employees or hire fewer workers because of higher costs and will lead low-skilled workers to be jobless. An increase in pay will lea...
Small businesses operate with little capital and net profit margin. Opponents argue the increase of the minimum wage affect the small business owners the most because they have a hard time paying employees. The oppositions believe increasing the minimum wage creates a market distortion (“Federal Minimum Wage”). It means the government intervention in raising the minimum wage causes a higher price floor that defines as the minimum price for the employees’ service. Because of a higher price floor, it reduces the employment opportunities and business profit. For instance, according to Mark Wilson’s “The Negative Effects of Minimum Wage Laws”, he writes about a study conducted by Barry Hirsch and his co-authors about the methods of how employers adjust to a newly imposed minimum wage. In their study, employers cushion the impact of the minimum wage increase by “requiring better attendance, insisting that job duties are completed faster, imposing additional task on workers, minimizing hours worked with better scheduling, and terminating poor performers quickly.” In addition, businesses try to push the rising cost to consumers, which result in increased competition from imported goods. This makes them less competitive. The negative side of increasing the minimum wage affects employers, employees, and customers since study suggest every dollar bump to minimum wage workers come from the business owners’ or clients’ pockets; in addition, employers impose more job responsibilities to
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
West, Rachel and Michael Reich. “The Effects of Minimum Wages on SNAP Enrollments and Expenditures” Center for American Progress. Center for American Progress, 5 March 2014. Web. 5 March 2014.
The federal minimum wage has been an ongoing debated topic since first established in America. Within the federal minimum wage bill, there are many different aspects, or sides, to look upon when arguing about the amount. Economic activity is negatively affected by the increase in minimum wage. One aspect afflicted within economic activity is poverty rate. The poverty rate is affected by the minimum wage through the welfare spending either increasing or decreasing or the unemployment levels rising or falling. Other sides of economic activity that a minimum wage increase would affect is the poor, the crime rate, and employee affiliations.
America is currently working on the issue of whether the minimum wage should be increased from $7.25 to $10.10 and economists are studying the effects of the possible increase. Minimum wage workers deal with struggles such as affording health care, paying for education, providing food for their families, putting many hours of work in while making little income and paying their bills. America’s decision to raise the minimum wage would help low wage workers to make higher incomes and would overall strengthen the economy, pulling Americans out of poverty. Americans may hold a minimum wage job if they do not have money to attend a college or university to obtain a degree in order to find a career.
Unlike the purpose of a higher minimum wage, a raise in minimum wage would bulldoze a plethora of people more into poverty. A minimum wage raise would have a cause and effect situation, it would cause a layoff in people’s jobs and effect where people were now receiving their checks. With a higher minimum wage, it would cause employers to employ less because they could not pay as many people that high of pay. In a study, there would be a 9% employment loss for a person between the ages of 25-61 with a 10% increase in the minimal pay (Jenkins). The target for raising the minimum wage is those adults who are living off the mandatory pay. But, as Jenkins found, it does the complete opposite. It would cause more people to lose their jobs and
“Of course, nothing helps families make ends meet like higher wages. … And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.”
Minimum wage has been a topic that has divided our nation for a while now. Some say there should be an increase in the minimum wage while others say the should not be. In my Argument today, I will be in support for the raising of the minimum wage. If the minimum wage is to be increased, it will provide low-income family with money to spend. Furthermore, the more people spend, the better the economy so raising the minimum wage will boost our economy. And finally, raising the minimum wage will reduce the gab between the rich and the poor, which is also an issue in our nation.
Many areas could be affected by a change in minimum wage, but potentially the most drastic change would be to unemployment. Advocates of a higher minimum wage insist that a raise would significantly decrease the unemployment rate in the United States and improve the quality of living. However, there are conflicting opinions on this. Higher minimum wage would mean higher labor costs for business owners, thus making it more difficult for employers to maintain the amount of workers they have, let alone add new employees. Raising the minimum wage does not increase the value of the worker's labor; it increases the cost of the worker's labor. As a general rule the more something costs, the less of it people will buy. This is true of not only consumer goods but also of workers in the labor market.Many jobs come from large corporations but they also come from small businesses.There are 23 million small businesses in America, accounting for 54% of sales and 55% of jobs. Raising the minimum wage means that all of these corporations and businesses will have to dig deeper in...