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Black Thunder

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Submitted By jackmaher7
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Jack Maher
Raising the Minimum Wage: a Conversation with Economist

On November 4th 2014, La Crosse ballots will include a non-binding referendum on raising the minimum wage to $10.10. The University of Wisconsin-La Crosse was fortunate enough to gather members from the Economics department and discuss this present issue at hand. The Economists were able to present arguments in a non-biased form to us, the students. The argument to raise the minimum wage had both positive and negative points. Raising the minimum wage has positive points. The main goal of raising minimum wage to $10.10 is to raise income for the working poor. Annual earnings for an employee that works 2000 hours a year at the current minimum wage accrues an annual salary of $14,500. By raising the minimum wage to $10.10, the annual salary would rise to $20,200. It can also be noted that when an employee earns more, they tend to work harder. This would push two percent of the population who live in poverty above the poverty line. This can cause an increase in production. Overall, a raise in minimum wage to employ’s would generate improvements to the working poor. Raising the minimum wage; however, brings up economical issues. The first issue being that raising the minimum wage would cause an increase in unemployment. Economic logic supports the idea that elasticities of labor demand would be large for unskilled workers. Also, unemployment will increase due to the fact that companies can outsource jobs for a cheaper rate. The rise in minimum wage will also cause companies to reduce hours to their employees. This means that the effect on earnings would be ambiguous. Another issue with raising the minimum wage would be compensating their losses by raising prices. Studies have shown that food prices rise in response to increase in minimum wage. This would directly affect consumers and also

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