In America eight out of ten small businesses fail in just their first year. Competition and lack of financing are two huge factors that lead to businesses failing. In 2009 more and more workers started to leave their more secure jobs to start their own business and become entrepreneurs. (Hannon 68) Over six hundred thousand small businesses were started, but that number means nothing if eighty percent of them (480,000) were doomed to fail in only twelve short months. (68) Even though small businesses are a huge factor to boosting the economy in times of economic downfall, with their creation of decent paying jobs, the thought of them receiving help is often times pushed to the side.
This makes the job market a hit or miss in America. It is predicted that America will soon be either very rich or very poor with no middle ground. In 2009, the United States economy began to recover from the Great Recession. To aid in the recovery, the newly elected president Barak Obama created the American Recovery and Reinvestment Act better known as the second of two “Stimulus Packages.” Pa... ... middle of paper ... ...middle class into almost $200,000 in debt leaving school. Only 46% of them will escape falling into poverty out of this 46% a fraction of them will be able to enter into the upper level.
Every year that minimum wage remains the same it leaves minimum-wage workers with a paycheck that cannot buy as much as it did in years past. According to a new study from economist Arindrajit Dube (2014), raising the minimum wage could lift about 4.6 million people out of poverty. The longer-term effects of the raising the minimum wage, could reduce the number of people living below the poverty line by 6.8 million. Business Reporter at The Huffington Post, Jillian Berman (2014) said, “that the new higher wage level would reduce the poverty rate among Americans between the ages of 18 and 64 by as much as 1.7 percentage points.” Poverty increased by 3.4 percent during the recession, and has not improved much since, but a wage increase would erase some of that poverty and ease the hardships of daily living (Covert 2014). If people are working for “less” money year after year, what is the incentive to stay?
This standard is leaving 9 million Americans living far under 18,850 a year! “Currently, full-time, full-year work at the federal minimum wage of 5.15$ and hour yields an annual income of 10,300$. If the minimum wage had kept pace with inflation since the late 1960s, as it had done in the previous two decades, its current level would be more than 7.50$ and hour, or 15,000$ a year” (The American Pros... ... middle of paper ... ... get an idea of what their low wages are creating for their employees. This project is going to require my engagement far longer than FYSE is going to last. Helping CCAG and the community is going to take much longer than one month to produce significant results.
Secondly, this paper will analyze the decrease in available labor hours and its relation to the minimum wage. Lastly, this paper will discuss what part minimum wage plays in the growth of unemployment rates. It is evident in our society that minimum wage does not benefit the poor and in retrospect, is actually impacting them negatively. Minimum wage is a term every individual in and out of the workforce has heard before. Perhaps, no one as much as my fellow college students who are struggling to pay off loans and debts while they attend school full time.
My mom was now making about $11 an hour. This is still less than what the Economic Policy Institut... ... middle of paper ... ... This may be true for a lot of people but does anyone realize "that you could work hard--harder even than you ever thought possible-and still find yourself sinking deeper into poverty and debt" (272.) This is true for so many people. Many people or even families work their behinds off and still hardly have enough to make ends meet.
There are 108,592,000 people in the United States on welfare (Snyder). Welfare is not social security, unemployment insurance, veterans’ benefits, or workers compensation (Snyder). People who receive welfare have low motivation and think it is an entitlement. People use excuses to not find an actual job and slowly start to rely on welfare for their overall income (Snyder). In the Sundance Writer, the story, How to Land the Job You Want gives an example of what should happen if someone gets laid off and/or loses a job.
However, the rise of minimum wage would make plenty of jobs. The current unemployment rate in the U.S is 6.7 percent; the lowest it has been since president Obama took office. Most of this 6.7 percent is made up of teenagers and the middle aged who are looking for a second job to support their families. This is a demographic that would not settle for 7.50 an hour, even for part-time jobs, and the small pay discourages other groups of new workers to stay away from those jobs. Some of thes... ... middle of paper ... ...t. This is known as “trickle-down” economics which is “an economic idea which states that decreasing marginal and capital gains - especially for corporations, investors and entrepreneurs - can stimulate production in the overall economy.
Recently President Obama, because of the lack of effort and action by congress, has used executive action to implement the raising of the federal minimum wage to $10.10 an hour for new federal contracts, effective 2015. This, naturally, has brought out commentary, studies that support and oppose this, as well as predictions that are totally opposite of each other. (Davis, S.) The non-partisan Congressional Budget Office (CBO) examined the impact of raising the minimum wage to two levels, $9.00 and $10.00 an hour. On February 18, 2013 the CBO report concluded that at $9.00 300,000 workers’ wages would rise over the poverty line; however 100,000 jobs would be eliminated by employers to maintain profitability. The impact of a $10.10 an hour minimum wage on these numbers would be 900,000 workers moving above the poverty line while 500,000 jobs would be eliminated.
The last time a change occurred to raise minimum wage was in 2009. President Obama has put out a proposal that is designed to raise the federally required hourly minimum wage to $10.10 in 2015. The public opinion of this proposal is all over the board ranging from a positive outlook to a negative one. Some of the negative remarks are that it would dampen the economy and shrink the hiring done by small businesses. “The Household Survival Budget for the average New Jersey family of four is $58,500 and for a single adult is $25,368 in 2010.