Minimum Wage Proposal

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There has been substantial complication in America in recent years on deciding an appropriate and feasible setting of the minimum wage requirement. It is understood that much of America’s income inequality can be defined by the distribution of income. Furthermore, looking at graphical depiction of the wage distribution, we are able to identify that an ample amount of workers are earning low wages and a small amount of workers are gaining significantly. Many of these low wage earners are those whose wages are determined by the minimum wage requirement; therefore, there has been much of an attempt to increase the minimum wage in order to correct income inequality in America. In my proposal I will be underlining the cost and benefits of introducing …show more content…

In 2014, Michigan passed a law to increase minimum wage, which at the time was 7.40 an hour. After the passing of the law, Michigan has experienced a decrease in the rate of unemployment rate from 5.4% to 4.8%. With the incorporation of surrounding states, we find that places such as Ohio that has a minimum wage of 8.30 an hour and an unemployment rate of 5.2%. Indiana’s unemployment rate is 5.4% and has a minimum wage of 7.50 an hour (which is equivalent to the federal minimum wage). Based on the results, it is not definitive that there is an actual correlation between the rises in minimum wage and increases in unemployment. Therefore, the increasing in minimum wage to 15 an hour could actually not negatively influence the employment rate as conventional economic wisdom …show more content…

Another issues that must be discussed when evaluating the minimum wage is poverty. One can be defined as improvised if basic subsistence levels are not met, such as food, clothing, and housing. If minimum wage is not adjusting to meet with inflation than one’s actual purchasing power decreases, which from this result leads an individual/family to survive below the poverty line. In addition, African Americans, Hispanics, and other minority group would benefit most from a rise in minimum wage. Many individuals in these minority groups’ wages are derived from “unskilled” occupations, which in many cases wages are determined by the minimum wage. Excluding discrimination from our equation and only encompassing and individuals skills, we find that human capital accumulation is pertinent when understand why certain individuals are in poverty. Therefore increasing the minimum wage could allow for individuals to accumulate the necessary means to acquire higher levels of

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