Effects Of Abolish Minimum Wage

To begin, there is an extensive debate over whether if the U.S were to raise minimum wage, could it really help the working poor of low income families. Nancy Cook, in her article from the National Journal, “Why a Minimum-Wage Hike Can’t Help the Poor”, she points out that two thirds of around 100 surveys from 2007 had a negative effect and that it does more for the middle class than the lower one. (p.14). So, therefore, from her

The minimum wage debate has been a hot topic over the past year, especially with the Presidential Election. This is a divisive topic that people rarely agree upon. There are essentially two sides you can take when it comes to this argument. Either people are for minimum wage or are against raising, or even having, a minimum wage. Proponents of the minimum wage are typically politicians who are lobbying for the vote of the people who feel that a minimum wage is critical to their wellbeing, and those who sympathize with people who earn “minimum wage”. Minimum wage is destroying America’s free market economy and someone needs to take action and find a better solution to this problem. Without anyone acting on this problem now, it can potentially be worse in the long run. Raising the minimum wage in the United States will do more harm than good to society because of the long-term effects.

Raising the minimum wage sounds like a beneficial idea, but there are also a few surprising reasons why it might not be such a good plan after all. A common assumption among Americans is that raising the minimum wage equals an increased income, but, according to Joseph J. Sabia and Richard V. Burhkauser that may not be the case. They discovered that, “examining only employment effects, however, may mask full labor demand effects. Firms may respond to minimum wage hikes by (i) reducing both employment and average hours worked by employed workers or (ii) increasing hours of retained workers to compensate for reduced employment” (Couch and Wittenburg 2001; Neumark and Wascher 2007) (595). What, exactly, would be the point in

Ira Knight, who is an author of article “Let’s Make the Minimum Wage a Living Wage”, expresses an opinion that increasing the minimum wage would help all struggling workers and at the same time improve U.S economy. On the other side, Janice Steele in her article “Keep the Minimum Wage Where It Is” argues that raising the minimum wage would have bad effects on workers, consumers and small businesses. Ira Knight’s article seems to be the stronger of the two positions because her arguments are based on several recent studies, and last but not least, she had a personal experience with the minimum wage job.

There has been many conversations about what the positive impacts can come to America 's lowest income workers as a result of an increase in the minimum wage, and there has also been equally as many discussions over the negative effects the increase can have on similar people. This paper’s purpose is to combine each viewpoint and objectively analyze the arguments for and against an increase in the minimum wage. I will first discuss the benefits for an increase, then the disadvantages, and in the last paragraph, I will

The federal minimum wage in the United States is currently $7.25 an hour. Increasing the minimum wage would lift approximately 900,000 people out of poverty. Forty-three million Americans are living in poverty due to low income, health care costs, childcare costs, college costs, and housing costs. The federal minimum wage should be raised because it keeps up with inflation and would scale down poverty levels.

The minimum wage has been an important element on the United States labor system and has sparked debates between employers and workers to this day. The main argument against raising the minimum wage is that the harmful effects raising the minimum wage would create do not justify the small-scale benefits generated by the raise. Business owners and conservatives claim that raising the minimum wage will result in job loss, hurt low skilled workers, and may result in higher prices for consumers. In a 2012 paper published in the peer-reviewed Industrial and Labor Relations Review (ILRReview), economists Richard Burkhauser, Benjamin Hansen, and Joseph Sabia, state that while some low-skilled workers living in poverty do see their incomes rise when the minimum wage increases, many others lose their jobs or have their hours significantly cut. Their study concluded that New York’s 2004-2006 $1.60-per-hour minimum wage hike was associated with a 20.2 to 21.8 percent reduction in the employment of younger, less-educated individuals, with the largest effects for those ages 16-to-24. Conservatives believe that even though teenagers are

Raising the minimum wage raises worries on the middle class about their development in the future economy, while economists and small businesses are also concerned. Advocates promoting a raise to the minimum wage are reducing attainable opportunities for small and new businesses to develop. Business owners concentrate on the outcome of raising the minimum wage instead of the effect on working people. In “measuring the full impact of Minimum and Living Wage Laws,” Wicks-Lim urges wage workers that increasing the federal wage will have costly consequences on the economy. The minimum wage will force large ripple effects to take place as prices rise to cover the new wage. Moreover, “the increase in the federal minimum wage from $5.15 to $7.25 per hour will contribute to a higher unemployment rate.” (Dorn) The business community warns that ripple effects will eventually take place if the federal wage is increased, aiming at small business owners to close or lay off low-wage workers. Raising the cost of products will drive away customers and end the shopping experience by shopping online rather than paying for the services in the stores. Small businesses are already laying off low-skilled workers and investing in self-service tablets, robotics, and other labor saving devices in anticipation of a lower minimum wage.

Proponents of raising the minimum wage claim that if the minimum wage was raised, then many economic and social problems would be alleviated. This contention is at odds both with economic principles and years of creditable research. The effect of raising or even having a minimum wage has been studied extensively and the majority of studies have proven that raising a minimum wage does not have the desired effect. Both micro and macroeconomic forces affect the results of raising the minimum wage. The secondary effects of raising the minimum wage are bad both for

“Economist have stated that the value of the minimum wage was at its highest in the 1960’s; since then, it has been outpaced by the cost of living, leading to a serious decline in wage value” (Pacitti). “An Analysis by the Economic Policy Institute, a left-leaning research organization, suggests that raising the federal minimum wage to $9.80 would increase pay for more than 28 million Americans, increase the gross domestic product by more than $25 billion and create the equivalent of more than 100,000 full-time jobs” (Greenhouse). Just five years after the worst of the financial collapse is over, an increase in jobs and pay by that amount would substantially increase our economy, those who earn more, spend

There has been many conversations about what the positive impacts can come to America 's lowest income workers as a result of an increase in the minimum wage, and there has also been equally as many discussions over the negative effects the increase can have on similar people. This paper’s purpose is to combine each viewpoint and objectively analyze the arguments for and against an increase in the minimum wage. I will first discuss the

The debate on increasing or eliminating minimum wages is of serious concern for the developing and developed economies. Minimum wage is the amount of lowest wage, set by the federal state to allow employers to pay minimum wage per hour to the employees (Bloobergview.org, 2014). Here, the area of concern is whether there should be minimum wage or not in the country. Well, I strongly oppose the idea of having a minimum wage in the economy. The increase in minimum wage will increase the cost of the job market, as companies have to pay enormous amounts even in the hiring of unskilled staff (Gorman, 2014). As economists raised their concern on the announcement of president Obama when he decided to increase the wage rate up to 10 dollars an hour, which will help to strengthen the economy. But it

The most prevalent and steadfast myth surrounding the raising of the federal minimum wage is that it will doom the economy. This might seem logical at first, but just think about it for a second. Why do minimum wage employees need more cash? The answer is simple: To spend it, to buy the things that they and their families need to survive. “Most minimum wage workers need this income to make ends meet and spend it quickly, boosting the economy. Research indicates that for every $1 added to the minimum wage, low-wage worker households spent an additional $2,800 the following year” (Fair). Furthermore, EPI estimates that if the federal minimum wage were raised to $10.10 an hour, it would result in over

In a paper titled “Four Reasons Not to Increase the Minimum Wage,” the Cato Institute, a libertarian think tank, offers four empirically backed consequences of increasing the minimum wage; these consequences include: the loss of jobs, low skilled workers being disproportionally affected and priced out of the job market, a minimal effect on reducing poverty, and higher prices for goods. The paper compiles a number of studies to support these

Opponents to minimum wage raise claim that the minimum wage costs jobs by pricing low-wage workers out of the labor market. However, when we review academic studies that examine the effects of minimum wage increases on