...The minimum wage is often thought of as a guarantee of fairness in the employment market. As it is erroneously perceived, the minimum wage ensures that every person receives a living wage. However, the minimum wage neither guarantees that an individual be employed in the first place, nor does it guarantee that an employee will be offered enough hours of work in order to garner a so-called “living wage.” A raise in the minimum wage, without a raise in productivity for the given work, will result in companies resorting to drastic measures to secure profits. These measures include cutting down worker hours, implementing rigorous productivity standards, and most importantly, raising the cost of products and services. An increase in the minimum wage will result in an increased difficulty for low-skilled individuals seeking work, as they now have to compensate for an inequity in the value they provide and the wage they are guaranteed. In addition, those already past the threshold of the minimum wage will be forced to endure a rise in the cost of living, despite the fact that they did not receive a raise in their personal wage. Lastly, raising the minimum wage will degrade the idea of the free market, a system which allows prospective employees to exchange their work to an employer for an agreed upon wage, including wages that may not conform to the restraints of the minimum wage. Ultimately, the federal minimum wage should not be raised as it will encourage an increase in the unemployment...
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...Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania The article aims to evaluate the impact of increased minimum wage from $4.25 to $5.05 per hour in 1992 on the employees working in fast-food restaurants in New Jersey and Pennsylvania. The author has shown two comparisons in this study. One is the comparison of employment growth rates at Stores in New Jersey and Pennsylvania before and after the rise of minimum wage. And second is change in the employment rate from stores which paid higher wages initially to the changes in lower wage stores. His study concluded that there is no indication that the increase in minimum wage reduces employment. Analogous to this case study, based on the basic economic concepts, rise in the wage rate per hour have two effects – substitution effect and the income effect. If substitution effect dominates the income effect, then rise in minimum wage increases the labor supply and thus the employment rate. But if income effect dominates, then rise in minimum wage reduces unemployment. We shall understand the reason behind why rising minimum wage did not show any impact. The study analysed the 410 fast –food restaurants in New Jersey and Pennsylvania post the increase of minimum wage and compared the changes in wages, employment and prices at stores before and after such increase. Some of the other significant features of this empirical study include: first, the idea to increase the minimum wage happened...
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...Raising minimum wage 3/21/15 Professor Arin Black English 102 July 24th very easily could have been the day of rejoicing for Americans around the United States thanks to the Fair Minimum Wage Act of 2007, which amended the FLSA (The Fair Labor Standards Act of 1938) to increase the federal minimum wage in steps. The first increase came on July 24th, 2007 when minimum wage was increased to $5.85, then in 2008 when minimum wage rose again to $6.55, and lastly on July 24th 2009 when minimum wage was raised to its current $7.25. Instead of raising minimum wage consistently as the years before, six long years have passed since the minimum wage has risen at all in the United States and this has left Americans to have very little to rejoice about. Not only does the government owe their citizens a raise in minimum wage, but it is long overdue. Many Americans are drowning in debt but somehow find a way to enjoy their life as comfortable as possible without the help of a higher minimum wage. For many this may seem like the norm but poverty has grown ever so steadily and there has yet to be an answer for this since July 24th, 2009. Given this, I absolutely agree the minimum wage needs to be increased in order to match the rise in costs of living which, unlike minimum wage, has risen dramatically since the last time anything was done about it. To begin, I’d like to take you deeper into the history of our rise in prices throughout the economy since the last rise in minimum wage in July...
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...Minimum Wage Minimum wage is one of the biggest controversies in todays world. In the two articles and the video, there are different ideas that are discussed. The first article that is talked over is “The argument against raising the minimum wage,” the second article is “Economists argues about minimum wages,” and the video is “Thirty Days Minimum Wage.” The one that I favor the most is “Thirty Days, Minimum Wage.” After reading the two articles and the video, I believe that minimum wage should be raised. In the first article, “The argument against raising the minimum wage,” the writer discusses why minimum wage should not be raised. For example, he states the consequences that will happen if the minimum wage was to rise; some of these include loss of jobs, an increase in consumer prices, and the likelihood of experienced workers being attracted to lower-paying jobs. If the minimum wage were to rise, many workers who have more advanced jobs might quit because of the benefits of a minimum wage job. Another idea that is brought up is the fact that higher paying and non-entry level jobs would not get paid as much. Although I am for raising the minimum wage, I do think that this suggestion is very unfair. I feel that if you went to college and worked hard for your degree, you deserve to get paid the right amount and not get a pay cut because of someone not going to college. In the second article, “Economists argue about minimum wage,” the author gives numerous thoughts on whether...
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...Minimum wage has been a problem in many states simply because people believe that their pay isn’t enough and should be raised to support themselves and others. But why should minimum wage be raised? I believe otherwise because the US raising minimum wage can cause problems for us, don’t you think? I believe minimum wage shouldn’t be raised. I believe that raising minimum wage can destroy businesses. The government raising minimum wage can destroy those small companies that already cannot afford to pay their employees more than the minimum wage. No company would want to lose their business because they are trying to pay employees more when they know they can’t afford it. If a person really thinks about it they will be able to see that if businesses did start to pay more than the minimum wage many people can lose their jobs. In the article, For the first time, majority of states have minimum wage above federal level, Charlene Conway a co-owner of the Carousel Family Fun Center will have to lay off staff members to be able to pay more money to the employee’s “ She might have to layoff several members of her 40 person staff and totally eliminate the younger workforce”...
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...Has one considered the long term effects of raising the minimum wage? Over the past decades, minimum wage has increased many times ever since the 1938 Fair Labor Standards Act (FLSA) was set, along with President Roosevelt's New Deal ("Minimum Wage"). Its purpose for this law was to enable citizens to have a living wage when the Great Depression occurred. When living costs increase, the minimum wage will have to rise also. Increasing the minimum wage even more can become a risk factor for the economy. By raising the minimum wage, there will be long term consequences that will hurt businesses, increase poverty, and lead to fewer job opportunities. The demand for a higher wage will hurt businesses. When companies are in jeopardy, it will lead...
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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...
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...The authors of this paper are in search for how employers in a low-wage labor market respond to an increase in the minimum wage. Specifically the raise in the minimum wage of New Jersey (NJ) on April 1st 1992 from $4.25 to $5.05 per hour and how this effected the surrounding areas employment level. This question is of interest to students of economic because we would expect to see a case study like this follow the labor of demand theory, as wage increase, employment decreases. However this paper finding indicates that the rise of minimum wage does not reduce employment. Which for someone studying economic comes as a shock, and the opposite of the models we have learned in previous class. This paper is not alone in these findings because as mentioned in the paper its self earlier studies have come to the same conclusion. So as a student this gives us a real life example of the labor demand theory being disproven, at least for this case study. Both of the authors of this paper have credibility and useful backgrounds. Dr. David Card earned his Bachelor of Arts degree from Queen’s University in 1978 and his Ph.D. in Economics in 1983 from Princeton University. His main field of study is labor economics; having authored 4 books over 90 journal articles and book chapters, while currently teaching at the University of California Berkley. Dr. Alan B. Krueger received a Bachelor of Science degree from Cornell University in 1983, a Master’s of Arts in Economics from Harvard University...
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...they perceive the product is worth. In the same vein, an employee will only work for a wage that he deems appropriate. If the employer lowers the wage, fewer workers will desire the job. These are a few of the reasons why the free market principle has many benefits. However, in a free market there can also be market failures. Market failures can arise from a multitude of situations such as pollution, or extreme low wages in areas of poverty. In a free market, a company could cause massive amounts of pollution and not have to bear the market cost of that pollution. The society as a whole, including people who do not benefit from the cheaper product, are the ones dealing with the polluted environment. Currently our government has been discussing a raise in the minimum wage. President Barack Obama is pushing for this bill and has many supporters. A rise in the minimum wage will be a major business issue for the next year and presidential election. Pros: Raising the minimum wage some enticing benefits to the American people and also has some strong logical arguments. One of the supporters for a raise in the minimum wage is U.S. Congresswoman from Florida’s 24th District Frederica Wilson who recently wrote an article titled, Raising the Minimum Wage: Good Ethics and Good Economics, which discusses the market failure of low wages. Wilson bases her argument on that a rise in the minimum wage is good ethics and good...
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...The Lowest Wage Name of Student Institutional Affiliation The Lowest Wage The minimum wage should remain at $7.25 as is the current level across numerous states. There have been numerous attempts to push for the raise of the minimum wage bill with a belief that the move will aid in improving the living standards of the poor and majority of the middle-class citizens. My argument against the rise of the minimum wage bill is based on some disadvantages that may arise due to an increment of the minimum wage bill. First, a rise in the minimum wage may hurt the middle class due to a resultant inflation of commodity prices. An increase in the minimum wage would mean that the employers would have to increase payments to the employees. With such a move, the employer would be forced to pass the extra costs to the consumers of their products hence inflation. Second, an increment in the minimum wage would be a threat to employment. Such an increase would lead to a rise in the payroll costs for the employers thus reducing or affecting their income. The consequence of this would be a reduction in employment, a decrease in hours of operation and even a reduction in the number of employees through layoffs. In fact, a study by the Congressional Budget Office shows that the proposed raise in the federal minimum wage to $10.10 could consequently lead to one million workers losing their jobs (Tejvan, 2015). The move would, therefore, burden the nation with high numbers of unemployed individuals...
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...New York increased their minimum wage to $15 at the beginning of this year as part of Governor Cuomo’s plan, “Built to Lead Agenda”. This plan “takes the needs of workers and businesses alike into account.” Thus, New York is trying to improve the lives of employees, without hurting the employers in the process. The effects of an increase in minimum wage to workers and companies in New York may be too early to calculate because the year has just begun. Research of other states give insights as to the results of increasing the minimum wage. If New York can increase their minimum wage from $9.70 to $15, can other states follow through? The effects of increasing the minimum wage varies. Supporters believe that an increase in minimum wage “improve...
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...22/06/15 The Effect of a Raise in the Minimum Wage on Employment and Profitabilty in the RMG Sector of Bangladesh, Drawing Sources From Other Developing Countries The study of minimum wages has led to many debates surrounding the topic whether a raise in minimum wage can kill businesses in profitability and employment or the change in profitability and employment is insignificant. This is a hot topic for policy makers in both developed and developing countries as a raise in minimum wage affects the economy in terms of economic growth, standards of living for the poor, survival of businesses and employment. A lot of research and literature has shown that a hike in minimum wages do not particularly affect the developed nations but the same hikes in developing countries can cause damage to firms depending on the size of the firms and their profitability. This paper attempts to show that the garments sector in Bangladesh (Ready made Garments Industry) faces the same dilemma. Since the Savar tragedy in late 2013 where a garment factory, Rana Plaza, collapsed which killed more than 1,100 people and injured and more than 2,500 people injured, garment workers and civil society demanded a raise of minimum wage from 3000 tk to 5,300 tk every month. This tragedy and similar events in developing countries lead us to think how businesses especially in the developing countries where wage rates and productivity are low can operate if minimum wage is suddenly increased threefold and why...
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...Raising the Minimum Wage Over the years the minimum wage has been a talked about topic. Many people would see it as a great idea because it would help families financially. In reality raising the minimum wage would be more of a struggle rather than a gift. The minimum wage has always been a struggle for people. Many people think that raising the minimum wage will solve all of our problems, when in reality it will not. It would only reduce the human motivation. Raising the minimum wage would also eliminate jobs making the economy struggle more. There would not be enough money circulating through the economy. Raising the minimum wage would reduce human motivation, eliminate jobs, raise taxes, and make the economy go into a hyperinflation. Raising minimum wage will reduce human motivation. In a perfect world where everyone comes from a good home, and lives in society, where people are raised to strive for better. In today’s society we do not have the perfect world. We have children being raised up to where they have to find a job at a young age just to help support their family. Children being raised up in a home like this creates a loss of ambition. Imagine, only being a child getting a job at such a young age. The only thing on your mind is being able to support the family with the money that is coming in. Imagine fighting to get the education back that was lost. Imagine not being able to go to school because there is no more time or money to help out yourself. Then the...
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...Course code: | ebc1009 | | Group number: | 46 | | Tutor name: | Emre Ergin | | Writing tutor name: | Kirsty Donald | | Writing assignment: | Main Paper (Task 10) | | number of words: | 1990 | | carina.grosseentrup@maastrichtuniversity.nl Table of Contents 1. Introduction 2. Government intervention 3. Government intervention to reduce income inequality 3.1 In-kind transfers 3.2 Minimum wage 3.2.1 Effects of minimum wage on labour market 3.3 Income tax 4. Conclusion 1. Introduction Although income grew by almost three percent per year for all income classes in the period from 1950 to 1980, the ones that were mostly blessed with the highest income growth were the top earners (McDowell, 2012). Income can differ enormously between the different classes of a society and the range between the top earners and those at the bottom of the society becomes larger and larger. Income inequality is a wide discussed topic by all social classes. The well earning upper-class, people who have to struggle with a minimum living wage and the shrinking middle-class, which has to worry most about its future living situation, are affected by it (Mankiw, 2012). Economic inequality can, therefore, be described simply as a contrast between the economic conditions or situations of different individuals or of different classes of a society (Champernowne & Cowell, 1998). The gap between rich and poor can have positive as well as negative effects...
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...In his 2013 New York Times article “Raise That Wage,” Paul Krugman states that, to the surprise of many, President Obama’s proposal to raise the minimum wage is an excellent course of action for the United States. Although many citizens fear that raising the minimum wage could have detrimental effects on the economy, a great deal of evidence suggests otherwise. Krugman strongly advocates Obama’s proposal, and diligently illustrates how the proposal is beneficial economically as well as politically. First, the article observes that the current minimum wage is unreasonably low. Despite worker productivity doubling, Krugman reports that, “for about four decades, increases in the minimum wage have consistently fallen behind inflation, so that in...
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