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Macroeconomics: Should Minimum Wage Be Raised?

analytical Essay
809 words
809 words
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Macroeconomics is the study of the behavior of an economy at the aggregate level. Macroeconomics considers the industrial sector, the services sector or the farm sector, but not specific parts of any of these sectors. The factor studies might include inflation, unemployment, and industrial production, often with the focus the effect of government policy on these factors. That leads me to an article that I read in Businessweek titled Making the Economic Case for More Than the Minimum Wage, written by Peter Coy on February 13th, 2014. The article starts with talking about President Obama’s 2014 State of the Union address calling for an increase in the minimum wage to $10.10 per hour. There was also a reference in the 2013 State of the Union address, but at that time it was to raise the minimum wage to $9.00 per hour. Where do these numbers really come from? Are they arbitrary or is there an economic rationale? The minimum wage has been on political agendas and debated for a number of years. The current minimum wage was set in 2009. To set a wage floor and increase the minimum wage, many believe, is the action of “big government” and many Americans are scared of “big brother government”. A poll in the Washington Post in December of 2013 found that two-thirds of Americans do in fact support a minimum wage increase. So the real question is what is the correct number? What is the fairest way for the US to arrive at this mystical number? To be fair it would need to be free of bias, dishonesty, or injustice. I am not confident that our elected officials would be able to come up with anything that is legitimately sought, pursued, and done that would be considered “fair”. Mr. Coy went on to share “the first minimum wage was 25¢ ... ... middle of paper ... ...d to raise and support a family? When I worked at the wage floor, I had desire to do better, I wanted to have a family. When my daughter was born, I needed to earn more and did what I needed to do. Why do we feel as a country the answer is raising a minimum wage? When we discuss minimums in other aspects of life, no one accepts it to be the good. Minimum is the base, and if you wanted to raise and support a family you need to be at the median or mean, not at the wage floor. The article addressed 2 approaches to lessen the influence of minimum wage. The good was to increase business and economic growth which would create a greater demand for workers. The bad is the way we are heading and that is decrease in workers and increase in workers skills. While minimum wage is a political topic, maybe less focus on a number and more focus on the growth of our economy.

In this essay, the author

  • Explains macroeconomics is the study of the behavior of an economy at the aggregate level. it considers the industrial sector, the services sector or the farm sector but not specific parts of these sectors.
  • Analyzes businessweek's article titled making the economic case for more than the minimum wage, written by peter coy.
  • Opines that the minimum wage has been on political agendas and debated for a number of years. a poll in the washington post in december 2013 found that two-thirds of americans do in fact support an increase.
  • Analyzes how the free market conservatives argue that it's wrong for government to interfere with work contracts. they believe that labor laws distort the market.
  • Explains that the article points out that setting the price of labor above equilibrium level causes supply to exceed demand and will lead to more unemployment.
  • Explains that the article talked about the card-krueger study, which showed that higher wages reduce turnover and increase job satisfaction. there is a cost to business with turnover.
  • Opines that the article makes reference to 17 million workers being directly affected, and 11 million with indirect benefit, about probable raises to preserve pay ladders.
  • Questions whether we believe in a minimum wage, or is it political gamesmanship? the subminimum is accepted for handicapped workers and restaurant workers.
  • Opines that raising a minimum wage isn't good for raising and supporting families, since minimums are the base of life.
  • Analyzes how the article addressed two approaches to lessen the influence of minimum wage. the good was to increase business and economic growth which would create a greater demand for workers.
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