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History of minimum wage
Positive and negative effects of minimum wage
Effects of minimum wage on the economy
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Whether they care about the economy, or only care about their own wage, everyone has an opinion regarding raising or keeping the federal minimum wage at $7.25. Why do we have a minimum wage? Some people say “It is impossible to live on minimum wage! It should be raised!” Minimum wage is not meant to live on for the rest of one’s life. In modern days, it exists to help high school and college students, or people who had economic issues and need to get back on their feet. First, let us examine the “cons” of raising the federal minimum wage, starting with a quote from the business-backed nonprofit Employment Policies Institute. “Multiple studies have demonstrated little to no relationship between a higher minimum wage and reductions in poverty.” A well-known theory concerning …show more content…
Common words of the supporters of increasing the minimum wage are “It will help those in poverty.” If an employee worked 40-hour weeks, he/she will earn approximately $15,080 per year, slightly below the federal poverty threshold of $15,130. However, it is imperative to consider that most employees earning minimum wage work less than 40 hours per week. Therefore, more cha-ching is good! Right? It is important to know that state minimum wage laws may differ from federal minimum wage laws. The law with the highest dollar amount should be used for payroll. For example, if the federal minimum wage is $7.25 per hour but state X has a minimum wage of $10.00, the employee is entitled to the higher minimum wage. Timeline of federal minimum wage amendments under the Fair Labor Standards Act (establishes minimum wage, overtime pay, record-keeping, and youth employment standards) 1949 —
Poverty continues to grow in America. The average minimum wage in the United States is $7.35 an hour- far too low in today’s society. Key expenses, for example, gas and housing prices, have gone up significantly since the minimum wage was last changed in 2007 (Wagner 52). The laws creating the minimum wage were intended to improve the standard of living and decrease poverty. Raising minimum wage is a vital step in decreasing poverty and giving every family the opportunity to survive and succeed. Millions of hard-working Americans are below the poverty line and need an increase in pay. Minimum wage must be raised because it will diminish poverty and assist the working class to support their families.
The United States minimum wage is not indexed to inflation. Due to this fact, the purchasing power of minimum wage falls as the price of consumer goods increases. The current hourly minimum wage is set at $7.25, however many states do pay above this rate. One example of this is in Michigan, the current hourly minimum wage is $7.40. 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. These numbers highl...
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
Should we have the minimum wage rise? Nowadays, many people argue that we should increase the minimum wage because we haven’t had an increase since 2009. People who are living on the minimum wage struggle a lot raising their families. (Webster) Minimum wage means the lowest daily or monthly remuneration that employers may legally pay to workers. On the other hand living wage means the minimum amount that a worker must earn to afford his/her basic necessities, without public or private assistance
Imagine a world where you are working overtime, seven days a week, yet your kids are starving. You can’t get the education you need because you don’t have the time and money to afford it, and you can’t change jobs because this is the only one you can get. Unfortunately, this is the reality for millions of Americans living today. The federal minimum wage is too low to help families, and actually mathematically speaking, too low to survive on. The quality of life for minimum wage families is terribly low, and that is unacceptable. As humans, we should be looking after others and helping the poverty come out of their continuous cycle. Raising the minimum wage would not only help families be able to afford a better quality of life, but help them to afford healthy food, get an adequate education, and invest in the necessary health care they need.
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.
Its well-known that minimum wage can easy vary from state to state city to city and even county to county. Furthermore each minimum wage law in each state/city or county has their own set of guidelines. The disparity of minimum wages within state lines is very diverse. For example the state of California has a state minimum wage of $8.00, while in Richmond, California the minimum wage $12.30 has recently been approved (www.foxnews.com). This is the highest among any state city or county and $2.00 above San Francisco’s $10.30 minimum wage (www.foxnews.com). For Richmond, California this makes sense becaus...
Minimum wage was established state wide in 1938 by Franklin Delano Roosevelt; at that time it was only 25 cents which is equivalent to 4 dollars in today’s world. It was established as part of the Fair Labor Standards Act which covered youth, government and overtime pay. Massachusetts was actually the first state before Franklin’s statewide acknowledgement, and it only covered woman and children without overtime. There are lot of issues with minimum wage now such as setting a statewide minimum wage to $10.10, which does not benefit places were living is expensive such as in New York. It leads to an imbalance in different states’ economies, and the government setting price controls in wage has some issues.
There are indeed risks of raising the minimum wage, but the rewards outweigh those risks, so the minimum wage should be raised. Some people who are against this may say ...“But other economists say raising the minimum wage actually hurts the very people it's designed to help: One of the basic laws of economics is that if you raise the price of something, there will be less demand for it. In this case, if you raise the price of workers, the demand for workers will decline. That could mean companies cutting the hours of employees, laying them off, or hiring fewer workers in the future.”... Yes, it could hurt the people it is designed to help, but different states have done this and found the opposite to be true. With America’s still fragile economy we need a boost, a helping hand; And this could be it. So next time you go down to vote on a mayor or maybe even the next president, remember that raising the minimum wage is a good thing, and you should be supporting
Because the cost of living has sky rocketed, it has become almost impossible to raise a family on a minimum wage job. A person living on his or her own cannot survive on minimum wage job either. Their living expense would just be too much. The earnings of minimum wage workers are crucial to their families well being. Evidence from 2013 and 2014 minimum wage increase shows that an average minimum wage worker brings home more than half of his or her family's weekly earnings. In 2013 one million single mothers with children under 18 would have benefited from a minimum wage increase to $10.
One way raising minimum wage will be beneficial is that it could lift many Americans out of poverty. Raising the minimum wage in Illinois, would help the families of more than 1.1 million workers who work to meet their children’s basic needs and “reduce the adverse effects of poverty on a child’s well-being” (Fiscal Policy Center). Studies have shown that raising the minimum wage would help 1 in 5 Illinois families who are in poverty. By raising the minimum wage in Illinois, it would help workers with families spend money on food, housing, gas, and other needs without going into poverty. Along with puling Americans out of poverty, raising the minimum wage could also stimulate economic growth. Raising the minimum wage, is stimulating economic growth by worsening the income inequality and substantially reducing the employee turnover for the business. Increasing a person’s income would raise their yearly earnings by $3,640 and “Improve the economic security and reduce the economies poverty rate” (Fiscal Policy Center). Low-wage workers spend most of what they earn on their basic needs, which is quickly spent and does not leave the worker with much money left to spend on other needs. This boost in the minimum wage will stimulate the economy and help create opportunities for more people, by hiring more workers to keep up with the
Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people earning little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. It has become the easiest way for people to receive easy pay. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. There have been many arguments going on, "Should minimum wage be raised or should it be lowered or eliminated altogether?" This action has its pros and cons. It can benefit many families as living cost has gone up, price for education is rising, and college students are in huge debts. It may increase poverty, but those
Congress created minimum wage with the Fair Labor Standards Act of 1938. The first minimum wage was only 25 centers per hour. Through history the minimum wage has increased a little at a time, umping a couple cents each time. The last time the United States changed the minimum wage was in 2007 which was a large jump from $5.15 per hour to $7.25 per hour. This jump of $2.10 was a large increase. Through the years it is evident that the minimum wage is constantly changing. “. It has averaged $6.60 an hour in purchasing power in 2013 dollars. But it has ranged from a low of $3.09 an hour in late 1948 to a high of $8.67 an hour in 1968(Sherk, J. (2013, June 25).
What would be so bad about raising minimum wage? Before other states jump on the $15 minimum-wage bandwagon, they might want to look at what's happening in Massachusetts — one of two states with a $10-an-hour minimum wage. Massachusetts increased the minimum wage from $8 to $9 at the start of 2015 and to $10 on the first day of 2016. The state is now mired in its longest stretch of net job losses since the recession in both the retail and the leisure and hospitality sectors, Labor Department data show.
Since its inception, the minimum wage has been a hotbed for debate. If today’s leaders could manage to increase minimum wage, millions of families would benefit.