...arguments for and against raising the minimum wage are almost unavoidable in the labor market, with each side having individually strong points. Advocates say that anyone who works 40 hours a week or more deserves to earn a decent living wage and get out of poverty, while opponents argue that high wages cost jobs. Most of the arguments for increasing the minimum wage are more emotional pleas and theories with very little evidence for achieving the desired outcome. The truth is that raising the minimum wage does not lead people to get out of poverty, but what it does is make it more difficult for younger workers to find entry-level jobs to build their skills. By raising the minimum wage, experts argue that it will make it more difficult for younger workers entering the workforce to get a job. Employers will be hiring workers with more experience and skills, since they can attract these workers with higher wages. Therefore, raising the minimum wage may be causing more harm to a younger workforce looking to find their first job to gain relevant work experience. Our country needs to focus on the inconvenient truths about the real impact around raising the minimum wage. Some of these inconvenient truths are highlighted by the research that clearly shows how raising the minimum wage may cause more harm than good, and have significant consequences to the younger and entry-level workers vs. the emotional theories that state increasing the minimum wage will get more people out of poverty...
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...Introduction Minimum wage refers to the lowest hourly, daily or monthly wage an employee is legally entitled to when working. Minimum wage is in effect in a range of different jurisdictions with differences in the views on the advantages and disadvantages being disputed by people. Supporters claim minimum wage increases the standard of living for workers whilst reducing poverty. Opposite views are that if it is high enough to be effective then it increases unemployment, particularly among workers who are inexperienced or handicap, thus harming the lesser skilled workers to benefit the better skilled workers The effect on employment rates due to minimum wage rates is a highly contested policy within economics. The introduction of minimum wage into the market can lead to competitive employers cutting employment; this depends on the rate of the wage rises require to comply with the current minimum wage according to the “standard textbook model”. Other models have also been suggested in which a decline in the employment rate may not occur and in fact employment may increase. During my research I found a wide range of literature on minimum wages, particularly on the effects of a minimum wage policy in place. Though a lot of informative research was concluding I also found the argument between weather the effects and positive of negative on employment, both sides of the disagreement present a large amount of information supporting the theories. Research before the 1990’s mostly...
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...Surviving the $15 Minimum Wage: McDonald’s Struggle to Remain Competitive Rasel Ahammed Dario Colon Gonzalez Gregory A. Delts Valerie Demas Keller Graduate School of Management Professor Vera Daniels MGMT 530: Managerial Decision Making November 27, 2015 Table of Contents Page 3: Executive Summary Page 4: Introduction-Overview of Decision Problem Page 4: Problem Statement Page 5: Objectives Page 6: Summary of Key Objectives Page 6: Alternatives Page : Description of Alternatives Page : Selection Page : Consequence Table with Original Values Page : Ranking Alternatives Page : Scoring Model: Title Page : Weighted Scoring Model: Title Page : Consequences Page : Risk Profile: Title Page : Implementation, Monitoring, and Control Page : Timeline Page : Summary Page : Works Cited Executive Summary McDonald’s restaurant chain, long considered an industry and community leader, has begun to experience a reversal of its corporate fortunes. They have seen a steady decline in total profits, sales, and a weakening of their corporate image. To add to their troubles, New York State Governor Andrew Cuomo, and a growing number countrywide are in the process of approving a bill almost doubling the minimum wage for fast food workers from $8.75 to $15. The problem is, knowing that there will be a dramatic increase in salary expenses in the next few years, how can McDonald’s alter its business practices...
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...The current debate of raising the minimum wage at a national level is one of the biggest things legislatures are talking about nation wide. Because it has been slightly put down at a nation level, legislators at a state level are trying to push higher wages through. The effects of raising the minimum wage range from inflation to unemployment. Angel-Urdinola, Diego. "The Impact on Inequality of Raising the Minimum Wage: Gap- narrowing and Reranking Effects." LABOUR: Review of Labour Economics & Industrial Relations. Jun2004, Vol. 18 Issue 2, P317-327. Wiley Blackwell, June 2004. Web. 19 Feb. 2015. In this research paper, Angel-Urdinola uses examples from other countries to prove why raising the minimum wage isn’t effective. He says that raising...
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...the national federal minimum wage from 7.25 percent to 10.10 percent to fill the gap of income inequality. Obama wants to give America a raise. He said, “That too many Americans are working just to get by. Some are not working at all.” He wants to speed economic growth by putting more money into the pockets of the low-income families. He wants to help them get out of poverty by raising the federal minimum wage and pegging it to inflation. The President believes that this solution will help big businesses in the long run by decreasing employee training cost and cutting back on high turnovers. In contrary, Obama will hurt the people he is trying to help. “This proposal will only harm the people the President wants to help, especially teens, who have already endured more than four years of 20+percent unemployment,” Saltman said. “If the President wants to boost the economy and have an impact on the country’s unemployment rate, he needs to lower barriers to hiring, not raise them.” The minimum wage class is mostly made up of teenagers and young adults. These people are usually people with low skills and have little or no experience. Some of them are first time job seekers just starting out in the work force. Most of us at some point in our lives have started out working a minimum wage job. Why? We need the minimum wage jobs to help us gain the experience we need to climb the success ladder for a higher paying job. They are stepping stone jobs. Minimum wage jobs were not intended...
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...Increasing the Minimum Wage Jacqueline S. Nock May 19, 2014 Abstract The issue of minimum wage increases has been controversial since the inception of the minimum- wage law in 1938. The minimum-wage law, which includes child labor laws, was put into place to protect American workers from exploitation and poverty during tough economic times (Schuldt, Robert; Woodall, Davis; Block, Walter E., (2012), par.4). Although the law accomplished what it was intended to at the time, increases in the minimum wage over the years have produced higher unemployment rates and higher poverty levels. As the minimum wage increases, employers are forced to eliminate employees who are not working up to the current minimum wage level and hire better-skilled people who are worth the wages they are paid. Increasing the minimum wage causes an increase in unemployment among certain populations for this very reason. Completely eliminating the minimum-wage law is not the solution to the problem, but if the minimum wage remains at its current level for a few more years, it might motivate minimum wage earners to do more to protect their own financial future. The History of Minimum-Wage Law President Franklin D. Roosevelt signed the federal minimum-wage law into effect in 1938. It was part of a larger bill called the Fair Labor Standards Act. The minimum-wage law was created to protect workers from not being paid a fair wage for the work they perform. It guaranteed workers a fair wage, ensured safe working...
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...Scope of Topic: Is a $15 minimum wage in large American cities fair to the affected businesses? On Nov 2014, San Francisco has voted to raise the minimum wage to $15 over a course of the next three years. This article intends to analyze the impact of the decision on businesses. The ripple effects of the wage hike are felt not just businesses that employ blue-collar workforce but also by larger corporations and the US economy as a whole. The wage hike is primarily aimed at providing economic stimulus to blue-collar workforce, who must live off their hourly wage. The article will be segmented into two parts – Fair and Unfair. Reasons that highlight both standpoints will be listed out and discussed in each segment. Fair to US Businesses Reduces employment and training costs. Employee turnover, ranging from 50 to 200%, is a serious problem among many businesses that employ a major chunk of the blue-collar workforce. (For example, an employer with annual turnover of 100% means that the firm is employing two different people for one position). All this translates to roughly 30 to 150% of yearly pay . Increases consumer spending due to increase in Purchasing Power Parity (PPP). Research undertaken by the federal government and also research agencies, indicates that wage hike results in approx. $50 B in spending. This increased spending can be captured by businesses in general. GDP grows by $22B , which leads to better business. Research by EPI, a research group funded...
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...In my opinion, the minimum wage is designed to be just enough for an average family in the Philippines. With average family, I mean a family consisting of 2 parents, and maybe 2 to 3 children. Statistically, despite the population growth and the increase number of the people living in the lower classes, a family can still sustain its needs if each of the family members is earning the minimum wage. However, many factors should also be considered, like the number of jobs available and the state of the person whether he/she is just a child or incapable of working. In reality, regular families in the Philippines don’t really consist of strong educated man and women; they are merely regular people, who are mostly composed of children. Unless the government accepts this reality, no permanent solution can be made. Despite the problems faced by the country, there are still 2 solutions I have thought of to lessen the suffering of each Filipino family. First, the government could give a list or a guide to people on how they can spend their minimum wage salaries to sustain and support their families. For example: 2 cans of sardines/5 eggs in the morning, 1 kg of chicken for lunch and dinner, and the excess, keep it for emergencies and other expenses. With this, families could be wiser and smarter in managing their budgets. It could also give the people ideas to create their own sets of list to find possible alternatives depending on their situations. Second, there should be a fixed computation...
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...In the current United States of America, a high minimum wage has hurt people economically, which has been seen by poverty rates, unemployment rates, and the reduction of part-time jobs. In 2008, an economist from American University and Cornell University released their results to their study on the effects of a higher minimum wage. They reported that through 2003 to 2007, the increase in the minimum wage did not decrease poverty rates throughout the struggling urban areas of America. Simultaneously, a group of economist from Ohio State University released a study that the increase in minimum wage, but in fact increased poverty rates across America. Unlike poverty rates, there has been a significant and visible increase in unemployment rates...
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...Ty Eggen “But raising the minimum wage to $15 per hour is not the way to get wages up in this country. In fact, it would cause perhaps as many as a million people to lose their jobs.” This was stated by Jonathan Trugman in an article published on November 24, 2015 on New York Post. The minimum wage in America should not be raised, but instead it should be kept at where it is currently at. If the minimum wage is raised, it could cause many various problems throughout the country, affecting all who live here. Today we will cover the problems that would arise if the minimum wage was raised, next some solutions and alternatives to not raising the minimum wage, and finally, the benefits of keeping the minimum wage where it is at right now. First,...
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...completely (retired and discouraged workers). Emigrants COSTS OF UNEMPLOYMENT Economic costs of Unemployment are estimated at over 7% of GDP. Loss in output that could have been produced if everyone was working Loss in tax revenue Loss of income Unemployment can lead to a lack of social cohesion, and physical and mental health, increased crime rates. Most unemployed people feel a low level of selfesteem REASONS FOR EU’S HIGH UNEMPLOYMENT RATE Competition from other areas of the world. Rapid growth in labour costs. High minimum wages have discouraged employers from hiring low-skilled workers. Replacement ratio - generous welfare benefits have weakened incentives for people to take available jobs. Tax wedge – discouraged workers. Restrictions against firings have discouraged firms from employing workers. MINIMUM WAGE EFFECTS MINIMUM WAGES, JANUARY 2014 (1) (EUR PER MONTH) YB14 US minimum wage http://money.cnn.com/interactive/pf/state-minimum-wage/ 30 to 40 days per year of paid vacations and holidays have boosted the cost of hiring workers. Early retirement is a problem, as the state has to fork out pensions earlier. High employer costs of health, pension, disability, and other benefits have discouraged hiring. Over half of Germany’s and...
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...Overview of the Federal Minimum Wage The Fair Labor Standards Act (FLSA), a law that guarantees employees and youth a fair minimum wage and overtime pay. It is regulated by the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL); it mandates employers to pay all nonexempt employees a federal minimum wage no less than the determine amount set by the government (U.S. DOL, 2011). Unfortunately, the federal minimum wage still sits at $7.25 per hour and has remained the same since George W. Bush signed a law to change it on July 24, 2009 (Risher, 2013; U.S. DOL, 2011). So, why did so many government officials decline the increase of the federal minimum wage and why do they fear the positive impact that the increase will have on America? This paper intends to briefly discuss six laws, all pertaining to federal minimum wage introduced to the House of Representatives within a year and highlight one member of the senate who disapproved the law for passing. In addition, this paper will briefly point out statements made about why some Senators chose to decline the bill; and finally, this paper intends to briefly explain any legal issues preventing the wage increase and implications for management. Start of Hope: Minimum Wage Fairness United States senators and representatives have introduced numerous federal minimum wage bills to the House of Representatives in order to amend the Fair Labor Standards Act (FLSA) during their term. These bills were designed to either...
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...Theory b. Goal setting Theory c. Equity Theory d. Expectancy Theory Payment is one of factors which can motivate the employees. Appropriate payment will avoid employees from the dissatisfaction but inappropriate payment will demotivate the employees. One of demotivation effect is decreasing productivity. The human resource department should maintain the payment according to employee’s needs and the laws. The human resource department can determine the salary based on employee’s position and job. But the payment must not be below the minimum wage. Beside the based salary, human resource department can apply these the payment plan: a. Piece-rate pay plan b. Profit sharing c. Gain sharing 2. The Problems Minimum wages noticeably increased between 2012 and 2014, average wages have not maintained the same pace of growth. This trend highlights that the minimum wage fixing mechanism is still the most predominant mechanism through which wage increases are achieved in Indonesia....
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...workers -- students from Asia and Latin America -- employed by the franchisee, Andy Cheung, allege that he forced them to work shifts of up to 25 hours and pay steep rent for living in his and his son's crowded basements, according to The Nation. The workers also allege that Cheung did not pay them for all of the hours they worked and that he retaliated against them for going on strike by locking them out of their living quarters. The guest workers paid as much as $3,000 apiece to come to the U.S. on temporary visas as part of a State Department exchange program, according to the National Guestworker Alliance, which is representing the workers. The group says Cheung deducted rent from the workers' paychecks, pushing their pay below the minimum wage. "We were living 6 men in a basement, on bunk beds that were clearly made [for] children and one tiny bathroom," Jorge Rios, an Argentinian college student who started working for Cheung in December, told CNNMoney. The workers have filed complaints with both the Labor Department and the State Department. Danya Proud, a McDonald's spokeswoman, told The Huffington Post in a Thursday statement that the company has taken action in response. "The franchisee has agreed to leave the McDonald's system," Proud said. "We take the well-being of the employees working in McDonald's restaurants seriously. We began investigating the situation in Pennsylvania immediately upon learning of the issues involved." About 20 people, including some of...
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...Stagnate Wages & Immigration: An Explanation & Solutions There have been ongoing debates about how immigrants are stealing jobs from native-born Americans. However way it is projected in politics there is no doubt that the influx of people immigrating to the U.S has been a major source of economic growth. Looking at immigration from an economic standpoint we will see that there are some who benefit and some who are left at a disadvantage from the flood of immigrants over the years. It’s a complicated issue as to why wages in America have not seen meaningful increases even as the economy has seen evidence of improvement. The questions remains on weather policies like increasing the minimum wage or educating our expanding population and letting the wages adjust naturally are good choices to increase stagnate wages. By looking at the supply and demand labor model, we will see that immigration and its tie to stagnate wages in the United States and long term or short-term steps that can be taken to resolve the issue. Based on the basic economic model the labor supply is represented by the supply curve, and that it is upward sloping. The businesses represent the downward sloping demand curve, as they are the ones with jobs to offer. When surges of immigrants enter the labor force, it shifts the supply curve to the right along the demand curve. The demand curve does not change because workers are not able to dictate how many workers a firm will need for a particular job...
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