Should Minimum Wage Be Increased? Essay

963 Words Apr 26th, 2008 4 Pages
According to the reference (Issues Surrounding the Minimum Wage Debate REVISION 2- Bruce D. Philips,NFIB Research Foundation, 11/30/05) increasing the minimum wage hurts low-skill employees. Most economists agree that increasing the minimum wage destroys jobs. This job loss is concentrated on the least skilled employees in the economy. Research from Duke University, the University of Wisconsin, and Michigan State University indicates that increases in the minimum wage hurt low-skill employees. Cornell University economists found that groups such as high school dropouts and black young adults suffer four times more employment loss from a minimum wage increase than their non-black and more educated counterparts.

Losses to small business
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More than 45 percent of respondents in a 2000 survey of members of the American Economic Association said they ''mainly agreed'' that minimum wages increased unemployment among young and unskilled workers. But over the last few decades there have been several increases in federal and state minimum wages, with little impact on the level of employment. This has led economists in the last decade to reconsider the link between wages and jobs at the bottom.

In 2005, about 1.2 million workers in the leisure and hospitality industry were earning no more than the minimum wage: restaurant cooks, hotel maids and others, accounting for almost 64 percent of all minimum-wage workers in the country. Unlike a manufacturer, a McDonald's in the United States will not relocate to China when its labor costs rise. And until a machine is developed to adequately sauté the vegetables and toss the salad in America's sit-down restaurants, it will be hard for employers to replace them, even if Congress agrees to increase their pay to $7.25 an hour from $5.15 over a couple of years.
In one study, Mr. Krueger and David Card of the University of California, Berkeley, found that in the eight months after New Jersey raised its minimum wage to $5.05 an hour from $4.25 in 1992, employment in fast-food restaurants grew slightly faster
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