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Positive effect of increase in minimum wages
Positive effect of increase in minimum wages
Positive effect of increase in minimum wages
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Businesses prices of their products, operating, and services are majorly affected by the minimum wage increase. As you may think that raising the minimum wage will play a big role with workers receiving more money, but what about the companies that have to pay more to their workers. Do they get a positive effect from the raising of the minimum wage? Well, to tell you the truth, businesses get negatively affected by this. One outcome from the raising of the minimum wage is: the minimum wage will increase the expenses for operating for businesses. It also increases the prices of their products, services, so they can cover their costs for labor. Lastly, for minimum wage, labor market competition will increase. This proves that raising
By raising minimum wage it puts the worker in a place where if they are able to make more money then they are able to spend more money and that would cause the economy to rise in a very positive way. They would have the chance to now go out and be able to buy some groceries, possibly get some diapers, and even have some left over money to possibly buy a nice shirt to go out over the weekend. Since they are now using their money in different places it helps the economy grow and influx itself into a better place. It can now also help the employer of whichever store they are going to feel a bit more assured with hiring more employees to join him or her workforce and create a bigger and better sales
“Franklin Roosevelt’s 1937 impassioned speech calling on Congress to help the one-third of Americans who were “ill-housed, ill-clad, and ill-nourished” heralded in the Fair Labor Standards Act of 1938 and with it a national minimum wage. Echoes of that speech are still heard today. Senator Edward Kennedy (1989: S14707), in his criticism of the most recent increases in the minimum wage, declared:
Understanding the basic concept of minimum wage is important for every single individual. We all live in this world together and it is obvious that there is an order. In order to continue our lives and afford our basic needs, we all need to work and gain wealth. As the old adage says ‘‘There ain’t a such a thing as a free lunch.’’ We need to give up on something that we like to get something else that we like. That’s why, every single individual in the society face trade-offs. However, people have different status. Some people work as employees and some work as employers. In that case of minimum wage the trade off is between employees and employers. Employees work for employers in order to gain money and afford their minimal living expenses whereas employers give up on their money and pay for employees because employers take care of their need of labor. Employers pay for their workers who we call employees and employees gain hourly money. The calculated minimum money that they gain in an hour base called minimum wages. Besides, there is this cycle that everyone actually works
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.
Raising the minimum wage to $15 an hour has been extensively debated over the last year or so. Minimum wage is the undermost wage allowed by law to be given to an employee for their services. Introduced in 1939, its purpose was to stabilize the economy, which was healing from the Great Depression. Most importantly, it was designed to protect the health and welling-being of employees. Currently, the Federal Government 's minimum is $7.25 per hour ($14,500 per year). The ones in favor of the increase are saying that it used to be a living wage; however, now it is not and it now needs to be line with changes to the cost of living. In addition, an increase in minimum wage can increase the productivity and decrease income inequality and poverty. On the other spectrum, the ones who are against the increase are saying that the increased labor cost will drive up unemployment, affect small businesses negatively, and cause other workers from different
The arguments for and against the minimum wage have been ongoing. On one hand, it’s simply a supply and demand issue. As prices (or wages) rise, the demand for that product (or labor) decreases—in other words, employers will simply stop or slow down their hiring. If the minimum wage increases too much, then it could even force some smaller firms out of business. Then even more people will be out of work. On the other hand, better paid employees could feel more motivation to increase their productivity. And increase in a company’s productivity could be high enough that, in order to keep up supply, it might need to hire even more employees. In this case, raising the minimum wage has increased employment.
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects.
In the eyes of the employees, the minimum wage raise is mostly a pro for them. There are three main reasons why increasing the minimum wage to $15 per hour would give benefits to both the employer and employees. Workers can make a decent living with a pay of $15 per hour. These people will then have a higher income that will enable them to pay their basic needs and living expenses. Back then in 2013, a report from the Congressional Budget Office estimated that 16.5 million low-wage workers would benefit from a $10.00 per hour wage; this includes 900,000 works coming up the poverty line ("The Effects of a Minimum-Wage Increase on Employment and Family Income"). So if employees receive a pay S15.00 an hour, the fewer people ar...
What is minimum wage, and why should it not be increased? Per Dictionary.com, Minimum wage is the lowest wage payable to employees in general or to designated employees as fixed by law or by a union agreement. Minimum wage should not be increased past the equilibrium of the economy for many reasons. If increased, numerous complications will arise. For starters, due to inflation employers will begin to lose customers, causing them to raise the prices of their product. Moreover, employers are more likely to reduce the amount of employees they have, as well as the amount of hours their current employees work. There will not only be a reduction in the amount of low wage workers but in higher wage workers as well. Higher wage workers will begin to demand an increase in their wage due to an inflation in the economy. Another disadvantage would be the lack of importance in gaining a college degree, or even graduating high school, due to being supported by a minimum wage job. Raising the minimum wage may initially benefit those who live in poverty. However, ultimately the disadvantages
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...
Overall, an increase in the minimum wage could bring many benefits to Americans such as families being able to afford education, healthcare, food, and other necessities without having to choose between resources. The workers incomes are not sufficient to cover a family's needs, so an increase could raise a family's income, create more economic equality, and help consumer spending. The economy could improve if the wages increased because families would not be torn between where their money must be spent. An increase in the minimum wage could create a thriving economy if the wealth was distributed equally to help Americans in need.
These are just a few of the many awful effects that raising the minimum wage brings. When workers hear a raise in the minimum wage, all they think about is a bigger paycheck and not what will happen to low-skilled workers, the cost of living, and the added stress to unemployment rates. New workers with less skills will have a harder time finding a job. The cost of living is going to hike due to inflation. Unemployment rates will rise due to added stress on businesses. An increase in the minimum wage is great news to a high schooler saving up to buy a new phone, but terrible news to someone trying to raise a family. If the minimum wage continues to increase, these problems will get worse instead of
...the future. Not only will raising the minimum wage provide more money but the workers can supply more food, be able to pay all of their bills and spend more if the wage was raised by at least five dollars. It could also benefit college students that are trying to find a way to pay for their education. Over 88 percent of workers who would benefit are at least 20 years old and in college (Cooper and Hall 2013). On the other hand, increasing the minimum wage can also cause higher rates of unemployment.
By raising the minimum wage, it would stimulate the economy in many ways. It would “increase the purchasing power of many workers whose wages would also go up” according to the article Raising the minimum wage: Guide to Critical Analysis. Another way that it would help the economy is that it would decrease the amount of people that would need government welfar...
Depending on a person’s perspective, raising the minimum wage could be positive or negative. Minimum wage has the ability to change lives, and change the economy. Small businesses and unemployment, teenage demographics, and the cost of civilian goods would be most affected. The only mystery is whether things would change for the better or for the worse. Many areas could be affected by a change in minimum wage, but potentially the most drastic change would be to unemployment.