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Raising minimum wage effects
Raising minimum wage effects
Effects of minimum wage legislation
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Thus far this paper has looked into the effects of minimum wage on a global scale. There is still much disagreement as to the effects of minimum wages. In order to make concise conclusions as to the effects of minimum wage this paper will take an examination of Germany’s minimum wage legislation. Germany has the largest economy and has the fourth lowest unemployment rates in the Eurozone. German is also one of five countries that have currently higher employment rates than before the global financial crisis. Some economists say this is due to Germany's ability to keep their labour costs at a minimum. In order to investigate this further it is worth to examine how Germany has dealt with minimum wage legislation previously. It is worth noting that German does not have a national minimum wage level, but rather many regional minimum wages depending on the requirements of work. Wages in Germany include many different minima determined at the infra-national level, as such as minimum wages can differ in relation to different sectors or regions. Joachim Wagner, a leading researcher in German Macroeconomics, analysed whether or not there was a wage curve, negative relationship between wage level and rate of employment, in German society in 1979 to 1990. Wagner restricted the data to only include German men working full time, females were at this time entering the workforce and thus omitted as a minority group, as well as measuring gross monthly earning. Wagner's results showed that there was no significant evidence of a wage curve in Germany but there was a steady wage in Germany regardless of the unemployment figures. Wagner null hypothesis was never rejected at a level of five percent which could indicate that there is a significant...
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...Januray 2014
24. Smith, A. (1863), An iquiry into the nature and causes of the wealth of nations, J.R. M'Culloc , available at http://books.google.de/books?hl=en&lr=&id=pnItAAAAYAAJ&oi=fnd&pg=PR1&dq=adam+smith+wealth+of+nations&ots=GeSevWKCRb&sig=2uw9lvE3JydIniVZoXCYiGpY0Zk#v=onepage&q=adam%20smith%20wealth%20of%20nations&f=false, accessed on the 17 January 2014.
25. Stigler, G. (1946), The Economics of minimum wage legislation, The American Economic Review, Vol 36, No 3, pp358-365, available at http://www.jstor.org/stable/1801842, accessed on 5 January 2014.
26. Wage Indicator (2013), Minimum Wages in Germany 2013, http://www.wageindicator.org/main/salary/minimum-wage/germany, accessed 5 January 2014.
27. Wagner, J. (1993), German wage curves 1979-1990, available at http://www.sciencedirect.com/science/article/pii/016517659300367W, accessed on the 10 January 2014.
In the Humanistic Tradition the author, Gloria Fiero introduces Adam smith as a Scottish moral philosopher, pioneer of political economy, and a key figure in the Scottish Enlightenment. Smith also known as the Father of Political economy, is best known for one of his two classic works An Inquiry into the nature and causes of the Wealth of Nations. Fiero looks at Smith’s work because the division of labor is important. One thing Smith thinks is even more important for creating a wealthy nation, is to interact and have open trade with different countries. Fiero states,“It is necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter,
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, (London: 1776), 190-91, 235-37.
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)
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
Smith's Influential work, The Wealth of Nations, was written based on the help with the country’s economy who bases it off his book. Smith’s book was mainly written on how inefficient mercantilism was...
"Adam Smith." Adam Smith. Library of Economics and Liberty, 2008. Web. 4 Feb. 2011. .
Smith, Adam. "CHAPTER XI OF THE RENT OF LAND." An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Clarendon, 1976. 161. Print.
Gitterman, Daniel P. “Remaking A Bargain: The Political Logic Of The Minimum Wage In The United States.” Poverty And Public Policy 5.1 (2013): 3-36. EconLit. 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.
Sherk, James. "What Is Minimum Wage: Its History and Effects on the Economy." The Heritage
Linda Gorman. "Minimum Wages." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. Retrieved April 24, 2014 from the World Wide Web: http://www.econlib.org/library/Enc/MinimumWages.html
Economists point to inflation as the main cause for low minimum wage. Inflation is described as “a general increase in prices and fall in the purchasing value of mone...
Pyke, Alan. "The Minimum Wage: Myths & Facts." Media Matters for America. N.p., 15 Feb. 2013. Web. 18 May 2014.
...happened and since 2001, critics of the NMW are progressively changing their mind as the LPC has managed to raise the wage of low paid workers without leading to any substantial reduction in employment. The NMW has also more positive than negative aspects, having reduced poverty and wage inequality with only modest effects on employment and having affected productivity favourably, while only reducing firms’ profitability by a small percentage. In a monopsony, the NMW could even increase employment if a proper wage is implemented. Overall, it can be said that the National Minimum Wage is a major tool to enhance a country’s welfare and boost its economy. Nevertheless, being only established for 15 years, are we able to capture the long run effects of the NMW today; or should we wait another ten years to conclude on the effects of the NMW on employment and poverty ?
A minimum wage is an hourly wage that is established by the government which represents the minimum amount an individual receives per hour. The federal minimum wage was established in 1938 under the “Presidency of Franklin Roosevelt” (Henderson). Currently, majority of the states have their minimum wage less than $10. However, the federal government wants to increase the minimum wage to $12 across the United States. The federal government believes that increasing the minimum wage will assist numerous people in the United States as most individuals are working in a minimum wage job to support their families. About “75.3 million people ages sixteen and over worked for hourly wages in 2008, according to the U.S. Department of Labor’s Bureau of Labor Statistics” (“Minimum Wage”). Meaning almost a quarter of the workforce of this nation are working a minimum wage job. Numerous people believe that these workers are not able to make their ends meet, and increasing the minimum wage will help these individuals substantially. Even though people believe that increasing the minimum wage will benefit the society, they tend to overlook the drawbacks of increasing the minimum wage, and how it will prove to be detrimental for the society.