Module 7 -Against Moving Minimum Wage to a Living Wage
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While raising the minimum wage to $15/hour in Kentucky is incredibly popular and sounds like an equitable and just idea that theoretically increase earnings for the lower and middle class, in practice there are certainly many reasons not to do so. Research shows that historically, raising the minimum wage disproportionally has a negative impact on the very populations the raise intends to help, as “the disemployment effects of minimum wages have been found to fall disproportionally on the least skilled and on the most disadvantaged individuals, including the disabled, youth, lower-skilled workers, immigrants, and ethnic minorities” (Wilson, 2012). As social workers it is our moral and ethical responsibility to protect and advocate for these populations (National Association of Social Workers [NASW] Code of Ethics, n.d.), so it is crucial to educate others about the potential harm that could fall upon these marginalized people.
As of 2022 16.5% of Kentucky residents are living in poverty (United States Census Bureau QuickFacts, n.d.), shockingly higher when compared to the national percentage coming in at 11.5% which includes 37.9 million American citizens (Shrider and Creamer, 2023). While it is well known that the top 1% of people’s wealth in the United States account for more than the “other” 99% combined, we
need to focus on how to close the gap on this wide margin of financial disparity. I will not argue that raising the minimum wage will harm all Americans, but I will assert that it would unintentionally hurt many people. It will likely cause employers to cut hours from part-time workers and incentivize businesses to utilize equipment rather than people for various labor to save money, which increases the difficulty and incentive of lower-skilled citizens to come off of government-
funded welfare and obtain a job (Wilson, 2012). The economic impact on United States citizens should not go unmentioned, as the likelihood of inflation increasing even further than its current impact on the economy is very high (Lemos, 2004). As a professional social worker, it will be our duty to inform people of the financial disparities raising the minimum wage could cause.
References
Code of Ethics
. (n.d.). https://www.socialworkers.org/About/Ethics/Code-of-Ethics/Code-of-
Ethics-English
Lemos, S. (2004). The effect of the minimum wage on prices. https://www.iza.org/publications/dp/1072/the-effect-of-the-minimum-wage-on-prices. IZA Institute of Labor Economics
. United States Census Bureau, A Shrider, E., & Creamer, J. (2023, September 12). Poverty in the United States: 2022
. Census.gov. https://www.census.gov/library/publications/2023/demo/p60-280.html
United States Census Bureau QuickFacts. (n.d.). U.S. Census Bureau QuickFacts: Kentucky
. Census Bureau QuickFacts.
https://www.census.gov/quickfacts/fact/table/KY/PST045223
Wilson, D., & Wilson, D. M. (1998). Increasing the Mandated Minimum Wage: Who Pays the Price? The Heritage Foundation
. https://www.heritage.org/budget-and-spending/report/increasing-the-mandated-minimum-
wage-who-pays-the-price#pgfId=1000959 Wilson, M. (2012). The Negative Effects of Minimum Wage Laws. The Cato Institute
. https://www.cato.org/policy-analysis/negative-
effects-minimum-wage-laws
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Related Questions
On December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes.
Now suppose that there is mobility in the labour market in country Alpha and we are in the pre-minimum wage period. Country Alpha receives migrants from country Beta and these migrants are positively selected.
a) Suppose country Alpha decides to adopt a welfare program to increase the minimum income of its workers. This minimum income is granted to all native workers, immigrant workers, and the new incoming immigrants. Using the Roy model, and ignoring how the program is funded, with the aid of a diagram, discuss how the welfare program changes the…
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On December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes.
Assuming there is no labour mobility and using the basic model of minimum wage, how do you expect the introduction of this policy to change the existing equilibrium wage and employment rate in the affected cities?
arrow_forward
According to the Heritage Foundation report, what are two possible negative effects of an increase in the minimum wage
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Explain the pros and cons of imposing a minimum wage in a country and illustrate your arguments by using a graph for labor market (number of employees on the horizontal axis and the level of wage on the vertical axis).
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Which of the following would economists expect to happen in a state that imposes a binding cap (or quota) on the number of licenses available for manicurists and enforces that manicurists must have an occupational license?
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There is a decrease in the number of manicurist jobs and the price of getting a manicure decreases
There is an increase in the number of manicurist jobs and the price of getting a manicure decreases
There is an increase in the number of manicurist jobs and the price of getting a manicure increases
There is a decrease in the number of manicurist jobs and the price of getting a manicure increases
arrow_forward
The minimum wage is often offered as a possible way to address the income gap. There is, however, apossibility that a minimum wage strategy could backfire. Which statement below best summarizes thepositive and negative aspects of raising the minimum wage?
a. Increases some workers’ incomes but leads to other workers likely being replaced withtechnologyb. Encourages more workers to take jobs but causes resentment among low-wage workerscurrently employedc. Increases the demand for labor but causes some workers to work less as their incomes growd. Does not affect labor markets unless it were below the equilibrium wage but would notincrease employment unless it were above the equilibrium wagee. Lowers the direct cost of labor to employers, while increasing the cost to taxpayers
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How did the two studies on Seattle minimum wage rise in 2015 give seamingly contradictory results?
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How would imposing a minimum wage below the market-clearing wage affect employment in a competitive labor market?
Group of answer choices
a. Employment would be unchanged because the market forces drive the wage to a higher level.
b. Employment would decrease as some workers who are willing to work at the lower competitive wage would no longer be able to find work.
there would be a shortage of labor
c. Employment would increase because setting a minimum wage below the market wage would increase the quantity of labor demanded
d. Employment would decrease because the quantity of labor supplied would decrease
arrow_forward
After implementing the price floor ( in a minimum wage), the supply and demand model suggests that________for labor.
1-quantity supplied will be LESS than quantity demanded
2-quantity supplied will EQUAL quantity demanded
3-quantity supplied will be GREATER than quantity demanded
arrow_forward
Answer C only please
On December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes.
a) Assuming there is no labour mobility and using the basic model of minimum wage, how do you expect the introduction of this policy to change the existing equilibrium wage and employment rate in the affected cities?
MY ANSWER IS UNEMPLOYMENT DECREASES
b)You are then asked to empirically evaluate the impact of the implementation of the minimum wage policy on employment rate in cities that implemented the new legislation compared to the other cities. Use data only from 1974, and 1975 in your policy evaluation. First, write down a…
arrow_forward
Explain why it is important to differentiate between the "number of unskilled workers" and the "number of unskilled labor hours" when evaluating the impact on the market for unskilled labor of an increase in minimum wage.
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What will happen to demand for labor in the food service delivery during this pandemic if the demand for food service delivery increases? But the cost of food service delivery remains the same.
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Name two ways real minimum-wage earners are different from people’s stereotype of minimum-wage earners.
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Should the federal government continue to require a mandatory minimum wage, or should it instead allow the “free market” to dictate wages, even though that might result in many workers receiving less than the current minimum wage of $7.25 per hour?
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Is the minimum wage a good policy? Should the government increase the minimum wage or maintain it at its current rate or abolish it altogether.
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Critics of raising the minimum wage argue that
A. minimum-wage laws are too expensive for local governments to administer.
B. labor demand is inelastic so firms can adjust production.
C. minimum-wage laws are imprecise in their ability to help the working poor.
D. effective minimum-wage laws create a shortage of labor.
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Minimum-wage laws and unemployment
Consider the market for labor depicted by the demand and supply curves that follow.
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $12.50. Then indicate whether this wage will result in a shortage or a surplus.
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $12.50.
Which of the following statements are true? Check all that apply.
Binding minimum wages cause structural unemployment.
in this labor market, a minimum wage of $9.50 would be binding.
In the absence of price controls, a surplus puts downward pressure on wages until they fall to equilibrium.
If the minimum wage is set at $12.50, the market will not reach equilibrium.
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Give reasons why there should be no minimum wage laws
arrow_forward
Suppose a binding minimum wage is imposed on the labor market, then basic microeconomics predicts that,
a shortage of labor will occur, hence unemployment increases.
a surplus of labor will occur, hence unemployment increases.
a shortage of labor will occur, hence unemployment decreases.
a surplus of labor will occur, hence unemployment decreases.
arrow_forward
The most prominent example of a price floor in industrialized market economies is a minimum (or award) wage.
Demonstrate how a minimum wage is likely to affect the total number of workers employed and the unemployment rate.
Are all workers made better off by an increase in the minimum wage? Explain.
What is the key determinant of the magnitude of the cost of an increase in the minimum wage?
What Australian legislation provides a safety net of minimum entitlements for employees?
arrow_forward
Which of the following did the author suggest might disguise the employment effects of raising the minimum wage?
a. Firms may substitute lower-skilled labor with capital
b. Firms may substitute lower-skilled labor with higher-skilled labor
c. Firms might substitute lower-skilled labor with other lower-skilled labor
d. Firms may pass along higher production costs onto consumers via higher prices, decreasing the quantity demanded and hence, the quantity of labor demanded
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- On December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes. Now suppose that there is mobility in the labour market in country Alpha and we are in the pre-minimum wage period. Country Alpha receives migrants from country Beta and these migrants are positively selected. a) Suppose country Alpha decides to adopt a welfare program to increase the minimum income of its workers. This minimum income is granted to all native workers, immigrant workers, and the new incoming immigrants. Using the Roy model, and ignoring how the program is funded, with the aid of a diagram, discuss how the welfare program changes the…arrow_forwardOn December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes. Assuming there is no labour mobility and using the basic model of minimum wage, how do you expect the introduction of this policy to change the existing equilibrium wage and employment rate in the affected cities?arrow_forwardAccording to the Heritage Foundation report, what are two possible negative effects of an increase in the minimum wagearrow_forward
- Explain the pros and cons of imposing a minimum wage in a country and illustrate your arguments by using a graph for labor market (number of employees on the horizontal axis and the level of wage on the vertical axis).arrow_forwardWhich of the following would economists expect to happen in a state that imposes a binding cap (or quota) on the number of licenses available for manicurists and enforces that manicurists must have an occupational license? Group of answer choices There is a decrease in the number of manicurist jobs and the price of getting a manicure decreases There is an increase in the number of manicurist jobs and the price of getting a manicure decreases There is an increase in the number of manicurist jobs and the price of getting a manicure increases There is a decrease in the number of manicurist jobs and the price of getting a manicure increasesarrow_forwardThe minimum wage is often offered as a possible way to address the income gap. There is, however, apossibility that a minimum wage strategy could backfire. Which statement below best summarizes thepositive and negative aspects of raising the minimum wage? a. Increases some workers’ incomes but leads to other workers likely being replaced withtechnologyb. Encourages more workers to take jobs but causes resentment among low-wage workerscurrently employedc. Increases the demand for labor but causes some workers to work less as their incomes growd. Does not affect labor markets unless it were below the equilibrium wage but would notincrease employment unless it were above the equilibrium wagee. Lowers the direct cost of labor to employers, while increasing the cost to taxpayersarrow_forward
- How did the two studies on Seattle minimum wage rise in 2015 give seamingly contradictory results?arrow_forwardHow would imposing a minimum wage below the market-clearing wage affect employment in a competitive labor market? Group of answer choices a. Employment would be unchanged because the market forces drive the wage to a higher level. b. Employment would decrease as some workers who are willing to work at the lower competitive wage would no longer be able to find work. there would be a shortage of labor c. Employment would increase because setting a minimum wage below the market wage would increase the quantity of labor demanded d. Employment would decrease because the quantity of labor supplied would decreasearrow_forwardAfter implementing the price floor ( in a minimum wage), the supply and demand model suggests that________for labor. 1-quantity supplied will be LESS than quantity demanded 2-quantity supplied will EQUAL quantity demanded 3-quantity supplied will be GREATER than quantity demandedarrow_forward
- Answer C only please On December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes. a) Assuming there is no labour mobility and using the basic model of minimum wage, how do you expect the introduction of this policy to change the existing equilibrium wage and employment rate in the affected cities? MY ANSWER IS UNEMPLOYMENT DECREASES b)You are then asked to empirically evaluate the impact of the implementation of the minimum wage policy on employment rate in cities that implemented the new legislation compared to the other cities. Use data only from 1974, and 1975 in your policy evaluation. First, write down a…arrow_forwardExplain why it is important to differentiate between the "number of unskilled workers" and the "number of unskilled labor hours" when evaluating the impact on the market for unskilled labor of an increase in minimum wage.arrow_forwardWhat will happen to demand for labor in the food service delivery during this pandemic if the demand for food service delivery increases? But the cost of food service delivery remains the same.arrow_forward
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