Microeconomics is an important field of study in economics which looks at how people and companies make decisions when allocating limited resources within an economic system. (business dictionary, 2016) Separate from macroeconomics; microeconomics looks at how economic factors could lead an individual or company to make certain decisions. The article we have chosen is written by "G. I” a writer at a British publication called “The Economist” (a popular economic publication). In this article "G. I” talks about a plan outlined by the US government to raise the minimum wage for federal employees and the macroeconomic effect that the increase would have on the businesses and their employees. In 2014 US President Barrack Obama signed an executive action …show more content…
These shareholders may include hedge funds, retries, and pension funds. Although, the impact of the minimum wage increase may be small, individuals and companies will be impacted by the change. Second, the workers and their families are impacted positively and negative by this change when some workers lose their jobs while other worker’s will get a raise because of the minimum wage increase. The immediate impact of the increase will be a boast in employee moral and a temporary increase in productivity. However, long-term the increase will result in an bigger workload for individual employees because of the decreased workforce and the responsibilities that come with higher wages. Companies may also force long tenured workers into retirement to cut expenses in the immediate future. Lastly, the government maybe impacted by this increase because more people will be collecting unemployment benefits and drawing from other social programs. Also, during contract negotiations, companies will demand more money from the government to cover the new minimum wage
Minimum wage is a topic that has been popping up since the 1980s. From whether we should lower it, or even raise it, but now in the 2000s minimum wage has been the center of attention more than ever. There are two sides to this topic of minimum wage; whether it creates more jobs or does not create jobs. Those who argue that raising minimum wage will create more jobs will have a rebuttal which is that it does not only cause the loss of jobs but that it would make things much worse and vice versa for those arguing raising minimum wage will cause loss of jobs. There will be two authors representing opposite views, Nicholas Johnson supporting minimum wage will not cost jobs with his article “ Evidence Shows Raising Minimum Wage Hasn’t Cost Jobs”
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.
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
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...
In 1938, the Fair Labor Standards Act was passed and ever since, the United States has required that all firms that do at least $500,000 worth of business per year pay their workers a minimum wage (“Handy” n.pag.). Because it affects so many workers in so many different aspects of the economy, the minimum wage plays a big part in the cost of labor and how firms deal with those costs. A change in the minimum wage, which would seemingly affect only workers, can actually be felt sometimes all the way down to the consumer, who might end up paying for it in the end—unless the firm finds another way to pay for the mandatory raise for all its workers, such as a decrease in its workforce or a change in the production process. These changes the consumer might not noticeably feel. A change in the minimum wage has several short-term and long-term effects on the economy that can be either beneficial or devastating to society at large.
Seldom do individuals realize the significance of acquiring a proper understanding of economics as a whole, let alone any subfields that branch off of it. Every aspect of economics is relative to another within itself, much like the roots of a tree are relative to the leaves or fruit that it bears. Attempting to distinguish between micro and macroeconomics in terms of significance to the real world is unavailing. Having a formal comprehension of this science begins with the principles and theor...
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
Since the cost of living has gone up drastically, raising the minimum wage is the right thing to do to boost the economy, lift workers morale and productivity, and improve the self sufficiency of potentially millions of American workers. Raising the minimum wage is a vital step in decreasing poverty and giving every family the opportunity to survive and succeed. Even businesses agree raising the minimum wage would give many customers more money to spend in turn increasing sales and higher profits for the companies. Therefore, raising the minimum wage would help and not hurt the economy and it would give many Americans a better livelihood and a more secured life. In today’s society it is very expensive to live in American and even getting by daily is difficult if you are living on minimum wage. Therefore, anyone who thinks the minimum wage should not be raised should try living in
Raising the minimum wage would affect employees. Supporters believe that raising minimum wage will improve people’s lives. We live in a consumer society. People who earn more spend more on products and services. As stated by BuzzFlash Headlines, “Higher Minimum Wage Would Create Over 100,000 New Jobs Nationally” (BuzzFlash Headline). Families would be able to use the money they earn to save for important things such as bills. If they wanted to, they could also buy more groceries or appliances. Non-supporters feel that raising the minimum wage will create many job losses. According to Economic Policy Institute, “Across the phase-in period of the increase, GDP would grow by about $22 billion, resulting in the creation of roughly 85,000 net new jobs over that period.”(David Cooper). If a family owned business has to raise the wage rate they pay, it is possible they will not hire as many people as they usually do. Businesses across the nation would be impacted by raising the minimum wage. According to the CNBC, “The great division among businesses and economists over the impact of raising...
If the minimum wage increases, those people that are skilled and well trained with salaries over the minimum wage could feel the competition from those unskilled workers who will have a raise. These high skilled employees could demand a higher rate, making things even more difficult to a business owner. Therefore, an individual must build experience and knowledge through out the minimum wage; in addition, a well-experienced worker has higher possibilities to get into a better position with a higher income. In addition, education is a fundamental milestone in any individuals’ life in which holds the roots of success; a well-educated individual could have a broader window of success and a job that gives him or her a peaceful life. The economy of the US can be harmed if the minimum wage increases. In addition, restaurant chains’ owners could look into technology improvements to prevent the hike in the workers’ wage. As Lydia DePillis in her article on the Washington Post writes, “Many chains are already at work looking for ingenious ways to take humans out of the picture…” she argues that technology already has led thousands of workers from in many airports, grocery stores, tollbooths, gas stations, banks, and automotive factories jobless and similarly could occur if the minimum wages keeps growing. Some big-chain restaurants could
Staff, NPR. "Raising Minimum Wage: A Help Or Harm?" NPR. NPR, 8 July 2012. Web. 20 May 2014.
Bernstein, Jared. “Would Raising the Minimum Wage Harm the Economy?” The CQ Researcher 16 Dec. 2005:1069.
Microeconomics is the study of an individual economy, or of the different segments within the larger economy, while macroeconomics is the study of aggregate economic behavior, or the economy as a whole(Madura 103). The main goal of macroeconomics is to determine the impact of consumer spending on total output, employment, and prices.
What is Microeconomics? This question was left unanswered when I initially enrolled in this course. Microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals create more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Microeconomics does not try to explain what should happen in a market, but instead only explains what to expect if certain conditions change. For instance, If the price of the new iPhone 8 is higher than the previous model will the consumer buy it? There are several elements that will play into getting an answer for this question, but gives you a general idea of what microeconomics entails.