Minimum Wage Microeconomics

There are a lot of people around the world who struggle with money and a satisfactory way of life. Whether they be in the United States or across the globe, there is a standard minimum wage set for the working class of their country. In the Unites States, there is a federal minimum wage of seven dollars and twenty five cents per hour worked. Almost every state has another set minimum wage, which typically is a little higher than the federal minimum wage, but it cannot be lower than seven dollars and twenty five cents. Countries set minimum wage laws, to ensure there is a basic quality of life amongst its citizens. As the minimum wage goes up in certain states, the quality of life also improves. The problem with a higher minimum wage, is now people are getting paid higher for entry level jobs which are meant for teenagers and people new to the workforce. If the minimum wage keeps increasing across the country, teenagers and young adults will have a much more difficult time finding jobs.

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.

As of March, 2013 the U.S. National Unemployment rate was 7.6%. A total of 11.7 million people were reported as unemployed by the Bureau of Labor Statistics. This rate is improved from the height of the recent recession, where the statistic floated around 9%, but it is still not the usual 3-4% figure we are used to seeing in regular market conditions. (bls.gov, US, 2013)

Labor is an important service that must be available and balanced in an ever growing population. For example, there cannot be a larger number of residents than there is labor or else there will be a definite increase in poverty. In the United States, there is a set law of minimum wage, which has an effect on companies and how they manage their labor force. The increase of the minimum wages affects the overall distribution of hours available, therefore, hurting the amount of labor needed. Conversely, minimum wage also has a major effect on those who recetly entered the workforce. If the minimum wage rises, there will be an increase of the unemployment rate. Correspondley, as the unemployed suffer, the first to be affected will be incoming laborers who are looking for jobs and work experience which is essential for their future. However, the upside of increasing minimum wage is that for those employed who keep their jobs they will earn more income which may increase the

Increasing the minimum wage causes middle class Americans have less money in their pockets to spend. Representatives of both businesses and charities have almost unanimously stated that they will be forced to reduce their hours and staff size to conform to the wage increase (Englander). The risk of getting laid off or getting your hours cut because of a wage increase is ludicrous, considering said increase is meant to benefit those same people. San Francisco has recently increased their minimum wage to $15 an hour, and is starting to struggle to support it. The number of households in the area earning less than $25,000 a year is steadily growing,

This is the percentage of people in the labor force who are unemployed. It can also be described as people who are employed receiving minimum wage without good growth opportunity in a company. Unemployment can be best described as people who are seeking for jobs, but are not yet employed. An example can be someone who just graduated from college or the university, trying to find job after graduating. When unemployment rate is high, it challenges people to find better opportunities and also means that the economy is not doing so great. Low unemployment rate means that the economy in the nation s stale an people are finding

To analyse and draw conclusions on minimum wage in relation to its standing in business law, we first of all need to define what the meaning of the term is. National minimum wage was introduced in 1998 through the national minimum wage act. This enforced that employers would pay each employee a set value set by the government per working hour. One of the main benefits of this was that the most low skills jobs within society received a fair wage. Setting the price of minimum wage is a complex task as the main priority is to reduce the negative effect on the labour market, creating benefits outweighing the costs. Inflation and minimum wage have a very close relationship, with inflation being the annual increase in the price of goods and services. As inflation rises, it is natural for minimum wage to follow at a similar rate. In october 2014, minimum wage increased 3%, whereas inflation increased 2%. This shows an improvement in the real term income for over 1,000,000 of the lowest paid workers in Britain.

Raising the minimum wage would hurt the less fortunate families. It spreads income unevenly. Some people would receive more pay and others would lose their jobs making families and the economy suffer. If someone have a minimum wage job that pays $5.15 it is better than no job at $6.00 (Henderson). If someone has a job that does not pay well be thankful for it, it still provides for the

Six years after the end of the 2008 recession, the pay for American workers remains at the same rate as when the recession began. Low wage jobs have dominated the job growth associated with the post-recession recovery. The federal minimum wage of $7.25 per hour remains decades out of date. “The federal minimum wage has lost more than 30% of its value and would be more than $10.59 per hour today if it had kept pace with the cost of living over the past forty years”. (“Fair Minimum Wage Act of 2013, 2013).

According to Jerome Fin minimum wage even at the federal level costs jobs ( Rotson 1). If a recession comes, higher wages will mean more layoffs (Alper 1) Although, this may not happen are you willing to risk it all? If a continuous amount jobs are lost not only will the lower class be affected ,but so will the middle class and upper class. “I feel every minimum wage, even at the federal level costs jobs”(Roston 1). Senate Minority Leader Mitch McConnell says “ The minimum wage is largely an entry - level wage and raising it to ten dollars and ten cents an hour would lead to destroying jobs for young people”(Raasch 16). After, Seattle raised their minimum wage to fifteen dollars an hour major problems started occurring. Adam Ozimek says “First wave of minimum wage increases appears to have lead to the loss of over one thousand one hundred food service jobs in Seattle's” (Puzder

The economic effects of raising the minimum wage can be damaging, but I believe the benefits of it outweigh the negatives. Those who tend to live on the minimum wage - fast food workers, retail employees, ext. - tend to spend most to all of their income. By raising their wage, they are able to 1. spend more and 2. possibly invest more. This would have a ripple effect throughout the entire economy - leading to raises for everyone. It is

Minimum wage is a problem, but most don’t want to raise it. Raising minimum wage will be a big problem now and including the future. Raising minimum wage is a problem depending on a social hierarchy. For many years the U.S had had many protesters and this is a problem according to state officials. Family's around the world are surviving on as little as 4.25 an hour in this case people have to survive off of food stamps and family members. Job owners can choose to higher the pay due to a raise in the company or a downgrade will determine whether they will make below minimum wage. Minimum wage should be increased from 7.25 to 9.00 an hour because of the over qualified, educated, and experienced Americans who are now relying on minimum wage jobs as a result of the struggling economy. Also, increasing minimum wage could help stimulate the economy. But, in order to get the economy back on track the spending power must be in the hands of the Americans who in fact, spend. With today's tough job market most job seekers are willing to acquire positions they are considered over qualified for, even if it means taking a pay cuts. Therefore, an increase in minimum wage will ensure that low wage over qualified workers have the means for vital necessities like housing, food, transportation and health care. Last year more than 200,000 Americans with college degrees were working minimum wage jobs due to our struggling economy. Furthermore, an increase in minimum wage would help stimulate the economy by

When I read high schoolers and people who work at jobs that pay minimum wage say that raising minimum wage will solve everyone's problems, it honestly makes me think that they don't understand anything about the economy. When you raise the minimum wage, the price of essentials and necessities also increase. An example of this would be the 1970's, The price of everything was at a very low cost. Such as, Milk which was only $1.65 which today would be far better than the costly price of $3.67. Although you may be convinced that the 1970's seems an easier time to live in, you are actually quite inaccurate. While the prices of everything was low so was minimum wage at a meager one dollar an hour. The price all around of everything increases because

You may wonder how the economy is affected negatively through minimum wage, so I’ll start there. The health of the economy is based upon an array of factors. Many people misconstrue this fact and think the economy is just based on the amount of money that the government have at their disposal and to be frank I can see why they do as such. The fact of the matter is that the economy and its health is based mostly on Gross Domestic Product or better known as GDP. The GDP alone does not indicate how well our economy is swaying, but change in it do. The goal for our economy and is to grow, have great price stability, and most importantly for this topic: have a high employment rate. Employment rate stand out most in this instance because of the power that minimum wage law has over it. One point that can easily be made that the higher the wage, the more people are going to want to get up and get up and work. The problem with that logic is that the demand for jobs will be high, but the supply for jobs will run out well before everyone is employed if the minimum wages was incredibly

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