Negatives Of Minimum Wage

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.

The issue of the minimum wage has recently come to the forefront of the debate on social policy. There is much disagreement over the wisdom of an increase in the minimum wage in the current fragile economic recovery. Some argue that a dramatic increase is what is needed in order to lift the standard of living for those in the bottom of the economic pyramid. Economists reason that the basic principle of supply and demand mandates than an increase in the wage would result in the loss of available jobs. Small businesses maintain that it would spell their doom.

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

For over a decade, many Americans have struggled with the low wage issued from employers, despite working very long hours of work. According to a study done in Oregon State University, a federal minimum wage was first set in 1938, starting at 25 cents an hour. Due to inflation that has occurred many times throughout the century, the call for raising minimum wage is to be immediately answered. However, the minimum wage falls when congress does not raise the minimum wage to keep up with inflation. Because of this many cities and states have departed from the minimum wage. In this essay, to be discussed is the reason why imposing a minimum wage above the equilibrium wage will reduce employment and contribute to an increase in the unemployment rate.

The current U.S. Federal Minimum Wage is $7.25 per hour. In just two years from 2013, the demanded from advocates for raising minimum wage rose from $9 to $15. However, raising the minimum wage is more complex than simply raising the number of federal standard of pay for employees. Relative control groups and other market activities play a part in the outcome of the minimum wage. For example, one instance of market activity was observers said that raising the minimum wage did not hurt individuals; however, wages were raised during an economic downturn so the impact of minimum wage was masked by other activities. Federal Minimum Wage is pressing topic and it is important to consider the pros and cons to raising it, to ask what people and how people are affected, and to look further into the microeconomic theoretical framework of wages surrounding the topic.

Also referred to as living wage, minimum wage is the lowest hourly rate allowed by federal law to be paid to an employee by an employer that is usually determined by inflations and other economic factors. Usually, it is an economic program stipulating an employee’s benefits of working per hour valued against a hardship policy instigated by the employer. In the United States, the minimum wage first came to light during the Depression era which has propelled from levels of 25cents to $7.25 per hour since 1993 (David, 2013). Irrespective if this steep increase, matters inflation in the

Minimum wage jobs are everywhere, and that makes them relatively easy to find. Many Americans work minimum wage jobs; however, these jobs are being overworked by the wrong people. A minimum wage job in the United States has never been, and never will be, meant to provide for a family. Adults who work a minimum wage job and try to raise a family on that income are almost always living in poverty in the United States, but what is poverty? According to Jewel in “Street Life Is No Life for Children”, “Poverty [is] the lack of affordable housing, access to education, and many other resources” (Jewel 428). In recent years, there has been talk in the United States about raising

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

There are several arguments that exist both for and against minimum wage. Minimum wage is the lowest wage that a person can get paid for their work. This is usually seen in labor unions.

In this paper I will introduce the concept of minimum wage and a few of the laws that govern wage rates within the United States. I will also discuss some of the idea of both the support and opposition to minimum wage. I will also introduce some United States companies who have made the decision to raise their own minimum wages, why they made the decision to do so, and the changes and expectations they have as a result. Raising minimum wage for a company is not easy, and what to raise it to is harder, but for many companies, it is a good idea. In this paper, I will explain why.

There have been discussions about whether to raise the minimum wage to either $9.00, $10.10, or $15.00 per hour. The minimum wage increase is supposed to be the first step to solving the income inequality problem in America and a step towards economic growth in America, by helping to stimulate the economy. Research into the effects of the wage increase shows, to me, that a higher minimum wage does not cause a drastic change in unemployment. It does increase productivity, and will address the growing problem of rising income inequality. I have included both the positive and negative sides to increasing the minimum wage, within this paper.

Now after raising the minimum wage to $7.25 six years ago, there has been a great deal of inflation between then and now that has pushed the issue of raising it once again. This particular issue has led to a serious debate that has divided economists into a 50/50 on going disagreement. Since there are already so many problems with the current minimum wage and even more problems that can occur if it was to be increased economist have taken many different aspects into consideration. About half of the economist studying this issue believe that while increasing the minimum wage can be beneficial, the current $7.25 minimum wage should not be increased due to the reasons

Minimum wage is the lowest or minimum compensation for workers by their employers. As such, it has a noticeable impact on the economy through various channels including standard of living, business efficiency, wage and income inequality, etc. Although minimum wage has many positive effects such as increasing the standard of living as well as reducing inequality, there are also many drawbacks to having a minimum wage such as inflation and unemployment. This paper will attempt to determine the influence of having a regulated minimum wage has on the economy.

It is evident that labor unions are the main driver of minimum wage growth. Their real purpose is to increase their monopolistic power and collective bargaining by increasing insiders’ wages to the detriment of outsiders, who consequently face fewer job opportunities. Furthermore, the scale effects of minimum wage are discussed in this paper. Since wages are the main component of marginal cost, and prices are a markup over marginal cost, higher wage inflation leads to higher price inflation. Although labor and capital are not perfect substitutes, large-scale automation is anticipated if labor cost keeps rising above market equilibrium. Besides, research has shown that one of the main causes of income inequality is the mandate of minimum wage, resulting many discouraged workers who decided to leave the labor force permanently and subsisted on welfare due to their obsolete skills. Lastly, one solution to the efficiency of minimum wage could be raising local minimum wage based on regional CPIs instead of raising minimum wage in all cities in the U.S at the same time. Another solution could be in making minimum wage hikes in line with marginal productivity of labor. When output rises due to higher productivity, a higher wage will be

An issue that has been debating throughout centuries is whether or not America should increase the minimum wage. This is an issue that has been arising to be relevant to pboeople all over the nation. Researches have provided logical facts and statistics on how increasing the minimum wage would be the solution to America’s debt. Increasing the minimum wage has also been successful in several countries including Germany. Studies have shown that decreasing the minimum wage is unlikely to solve any economic woes. While when we increase the minimum wage it benefits the economy, employment as well as dexterous people.