The United States has maintained a minimum wage which was enacted since 1938. At the present time there is much political debate in regarding to increase the minimum wage to levels at the federal level, state, and local levels of government across this country. There are various theories regarding the minimum wage. Some believe it would circulate money into the economy faster which would negate and negative effects on employment, or even improve unemployment rates. Others point to the economic theory of supply and demand, and claim it will increase the unemployment rate. Both of these are simply theories and must be shown to have real life implications. Are moderate increases in the minimum wage above the equilibrium market rate an effective policy tool in combating poverty? We can test this by comparing the unemployment rates of states without minimum wages above the federal level to those who do have state minimum wages above. Also something that has not been previously looked at is the minimum wages effects on the underemployment rates. I have found that these moderate increases of the minimum wage do not seem to have an adverse effect on the unemployment rates in the states that have adopted them. They may even have beneficial effects on unemployment rates. However they may have a small effect on underemployment rates. Also I will survey low-income individuals to see how it impacted their lives. The minimum wage has been a policy tool used in the United States since its establishment with the Fair Labor Standards Act in 1938. It has been uses as a tool to remedy some of the effects of poverty by raising the wages of the low wage workers. It has long been the worthy goal of many policy makers to find solutions to alleviate pove... ... middle of paper ... ...nomics RSS. Retrieved May 7, 2014, from http://blogs.wsj.com/economics/2012/07/30/which-states-have-worst-underemployment/ Sklar, H., Laryssa, M., & Wefald, S. (2001). Raise the floor: Wages and policies that work for all of us. (pp. 87-119). New York, NY: Ms.Foundation for Women. Retrieved from http://books.google.com/books?hl=en&lr=&id=kk6MK6cbwZkC&oi=fnd&pg=PT2&dq =wage floors effects of the impoverished&ots=Zy6O- y7oII&sig=bOsP0NtROsryurUHstmQJWdfS2E State Minimum Wages | 2014 Minimum Wage by State. (n.d.). State Minimum Wages | 2014 Minimum Wage by State. Retrieved May 2, 2014, from http://www.ncsl.org/research/labor-and- employment/state-minimum-wage- chart.aspx Unemployment Rates for States Annual Average Rankings. (n.d.). Unemployment Rates for States Annual Average Rankings. Retrieved May 2, 2014, from http://www.dlt.ri.gov/lmi/laus/us/annavg.htm
Poverty continues to grow in America. The average minimum wage in the United States is $7.35 an hour- far too low in today’s society. Key expenses, for example, gas and housing prices, have gone up significantly since the minimum wage was last changed in 2007 (Wagner 52). The laws creating the minimum wage were intended to improve the standard of living and decrease poverty. Raising minimum wage is a vital step in decreasing poverty and giving every family the opportunity to survive and succeed. Millions of hard-working Americans are below the poverty line and need an increase in pay. Minimum wage must be raised because it will diminish poverty and assist the working class to support their families.
The minimum wage was, as it should be, a living wage, for working men and women ... who are attempting to provide for their families, feed and clothe their children, heat their homes, [and] pay their mortgages. The cost-of-living inflation adjustment since 1981 would put the minimum wage at $4.79 today, instead of the $4.25 it will reach on April 1, 1991. That is a measure of how far we have failed the test of fairness to the working poor.” (Burkhauser 1)
Understanding how the minimum wage level functions to affect poverty in a given society is crucial for informing policy in a number of important areas. Indeed, examining the link between poverty and the minimum wage is necessary for policy-makers working to establish sound economic policy as well as labour and social advocacy groups seeking to ensure the minimum wage is at a level sufficient to ensure workers can meet their most basic and fundamental needs. Readers should be concerned with the link between the minimum wage and levels of poverty because poverty is a particularly significant and impactful social issue. High rates of poverty can both negatively impact the economy, as well as contribute to a host of negative social issues. At the same time, there may be questions regarding the impacts to poverty associated with the minimum wage. Research which better clarifies this link is particularly important. For these reasons, investigating the link between the minimum wage and poverty is essential. This essay will provide a summary of two academic journal articles investigating the link between poverty and the minimum wage. Each summary will discuss the particular focus of researchers, the contribution of the study, the methodology employed by researchers, as well as their findings and conclusions. Finally, the essay will conclude with a brief commentary regarding the relevance of these articles to the larger topic, as well as their effectiveness in promoting learning.
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 blogs and articles and essays, some written by economists with advanced degrees, people academically more capable than I am, will continue to deride the raising of wages for the low class worker, or the need for regulation to be put in place. I’m just stating that they’re wrong, and that this essay proves it.
Hassett, Kevin A., and Michael R. Strain. "Why we shouldn't raise the minimum wage." American enterprise Institute. American Enterprise Institute for Public Policy Research, 10 Mar. 2013. Web. 30 Apr. 2014. .
"Cost of Living Calculator: Compare the Cost of Living in Two Cities."CNNMoney. Cable News Network, Mar. 2014. Web. 07 May 2014.
National Conference of State Legislators (NCSL). "State Minimum Wages." State Minimum Wage Chart. N.p., n.d. Web. 24 Oct. 2013.
A federal minimum wage was first set in 1938. The first minimum wage was just 25 cents an hour in 1938. Can you imagine surviving off of 25 cents an hour? Now just over 70 years later the federal minimum wage is now 7.25. The question at hand is the federal minimum wage enough to meet the minimum requirement for a good, happy and healthy life? Some states and cities say no. While a select few states and cities have mirrored the federal minimum wage of 7.25, some states have placed their state or city/county minimum wage marginally higher than the federal minimum wage. So why would some states prefer to have a higher level than required by the federal minimum wage when some state have decided to match or even go below the federal minimum wage level. The answer to this question lies within each state city and county and how they perceive the cost of living in the presiding area. Minimum wage needs a makeover in America despite some of the negative effects that may come along with it. This paper will explore the reasons behind federal and state minimum wages and why some of them differ among states counties and cities across America.
Living wages became a hot topic in 1994 when Baltimore, Maryland officials adopted a policy that required all companies that received public funds or worked on government contracts to pay a wage that would sufficiently provide for the basic needs of the people they employed. Living wages differ among cities since it is calculated by the cost of living in that area. The cost of living is based on available childcare, healthcare, housing, food, and transportation costs. According to www.responsiblewealth.org, (2005) in 2000, the living wage amounted to $17,050 a year for a family of four, or $8.20 per hour for a full-time, year around worker. Most studies show that the economical benefits of living wages, such as worker productivity and reduced turnover, are increasing, and I must agree with Neumark (2003) who explains that living wages overall can reduce poverty, and living wage laws are effective, but there is an obvious tradeoff that occurs with wage increases, specifically employment reductions for individuals with little or no skills. Issues such as these will be discussed in greater detail in this paper.
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,
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.
Staff, NPR. "Raising Minimum Wage: A Help Or Harm?" NPR. NPR, 8 July 2012. Web. 20 May 2014.
The strongest statements for it not helping with poverty are that the only workers that benefit from having a higher minimum wage, are the individuals who are the ones who earn that higher wage, and argue that increasing the minimum wage, can and does reduce many people’s job opportunities and working hours (Sherk, 2007, p. 1). Another argument is that not very many minimum-wage earners come from poor homes, and lastly, many Americans who are experiencing poverty, don’t even work, so increasing the minimum wage does not matter for them.