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Positive and negative effects of minimum wage
Effects of rising minimum wage
Positive and negative effects of minimum wage
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Introduction
One of the most talked about subjects in the U.S economy is the topic of minimum wage. With president Obama working to increase the minimum wage to 10.10$ per hour people, both economists and politicians alike, have been debating whether or not raising the bar is a smart idea. At a time when the country the country’s inflation continues to rise at a steady pace and Americans are constantly working to feed their families, some economists know that a raise in the minimum wage would help elevate some of the difficulty. The last time the federal minimum wage was raised was in July of 2009, where rose from 6.55$ to 7.25$. However there are plenty of reasons as to why the wage should be raised. Some may not think it, but raising the federal wage could very well assist the U.S with some of its largest economic problems; the increasing standard of living in the U.S, the recession in the economy, and even the ever inflating U.S national debt.
For the Good of Americans
The United States is home to nearly 317 million people to this date, with nearly 50 percent of them working on minimum wage jobs. That’s a lot of people working long hours every day for jobs that do not or barely pay them enough to feed themselves and their families. However, the rise of minimum wage would make plenty of jobs. The current unemployment rate in the U.S is 6.7 percent; the lowest it has been since president Obama took office. Most of this 6.7 percent is made up of teenagers and the middle aged who are looking for a second job to support their families. This is a demographic that would not settle for 7.50 an hour, even for part-time jobs, and the small pay discourages other groups of new workers to stay away from those jobs. Some of thes...
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...t. This is known as “trickle-down” economics which is “an economic idea which states that decreasing marginal and capital gains - especially for corporations, investors and entrepreneurs - can stimulate production in the overall economy. According to trickle-down theory proponents, this stimulus leads to economic growth and wealth creation that benefits everyone, not just those who pay the lower tax rates.”
Works Cited
• http://www.raisetheminimumwage.com/pages/qanda
• http://www.usnews.com/opinion/blogs/robert-schlesinger/2013/12/31/us-population-2014-317-million-and-71-billion-in-the-world
• http://www.bls.gov/news.release/pdf/empsit.pdf
• http://www.learnvest.com/2012/10/how-raising-the-minimum-wage-would-help-the-economy-123/
• http://www.marxists.org/history/ussr/great-patriotic-war/pdf/economy.pdf
• http://www.investopedia.com/terms/t/trickledowntheory.asp
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Since its inception, the minimum wage has been a hotbed for debate. If today’s leaders could manage to increase minimum wage, millions of families would benefit.
"Raising the minimum wage will benefit about 28 million workers across the country. And it will help businesses, too - raising the wage will put more money in people's pockets, which they will pump back into the economy by spending it on goods and services in their communities." -- President Obama
Currently, America uses a progressive tax system. A progressive tax system means that the percentage of income an individual or household pays in taxes will increase with increasing income. Using the progressive tax system creates a bias towards the wealthy, and then starts class. It will be helpful in many ways by distributing the tax problem, but high rates discourage an activity, and high progressive taxes discourage wealth creation. Also, a progressive tax system encourages Americans to pay their responsibility to the government equally.
In the 2014 State of the Union address, President Obama called on Congress to raise the national minimum wage from $7.25 to $10.10 an hour, and soon after signed an Executive Order to raise the minimum wage to $10.10 for the individuals working on new federal service contracts. An increase in the minimum wage has been a topic of discussion for many years now, and it looks like this year will finally see the first increase of minimum wage in 10 years. Not everyone agrees that there should be an increase, but many states have already raised their minimum wage rates because of the federal government’s inaction. Iowa raised the state’s wage, and it will rise again in 2016. Clearly there are benefits to a higher minimum wage; the current minimum wage in the United States should be raised because it helps the economy by increasing employment, and it is now at the lowest value it has been in more than 50 years, causing hardship for earners of minimum wage.