Increasing the minimum wage has always been a very controversial topic because many people are unsure of how it will effect society. One of the main concerns is its effect on jobs. According to most economists there is no “free lunch” meaning something has to be done to pay for the cost of increasing wages (Wilson). Most companies will not just take the hit and accept reduced profits. Instead companies will find other ways to makeup for their loss like decreasing the amount of employees. With information limited to two opposing opinionated articles, a novice can conjecture increasing minimum wage does not significantly decrease the amount of jobs. The first article, “The Negative Effects of Minimum Wage Laws” by Mark Wilson is against increasing minimum wage. He claims that an increase in minimum wage reduces jobs, but he does a terrible job at supporting his claim. Wilson’s approach of analyzing minimum wage solely through the use of numbers, oversimplifies the economy and makes his conclusion less persuasive. He first analyzes what an increase in minimum wage will do by establishing the elasticity of the labor market (elasticity determines who bears the burden of an increase …show more content…
For example employers can cut back on training hours or health-care benefits (Plumer, Brad). They can also make productivity more efficient (Plumer, Brad). Many companies may also resort to raising prices (Plumer, Brad). Another possibility is “companies may actually save money from a minimum-wage hike because there 's less employee turnover” (Plumer, Brad). The benefit of not having to screen and train as many employees may very well save the company a lot of money (Plumer, Brad). I believe there are so many different ways for companies to cope with minimum wage increases, that it will not have a significant impact on the number of
“Franklin Roosevelt’s 1937 impassioned speech calling on Congress to help the one-third of Americans who were “ill-housed, ill-clad, and ill-nourished” heralded in the Fair Labor Standards Act of 1938 and with it a national minimum wage. Echoes of that speech are still heard today. Senator Edward Kennedy (1989: S14707), in his criticism of the most recent increases in the minimum wage, declared:
The common argument takes beginner's level supply and demand graphs and uses them as the basis for the claim. The basic elastic supply and demand graph shows that as the cost of a good increases, demand for that good declines. Thus, if the minimum wage increases, businesses will face higher costs, will pass those costs onto consumers, will suffer lower profits or will reduce employment, or some combination of these negative outcomes. The author here is pointing out that the world is a heck of a lot more complex than that. Microeconomics does not end with the study of rudimentary supply and demand graphs, but incorporates a broader range of considerations into its arguments.
Well, raising the minimum wage has both the pros and cons. Still, the fact that increasing the minimum wage nationwide would increase millions of workers’ earnings is deniable. I suppose that’s why some people advocate raising the minimum wage will grow the economy for everyone. In 2014, the president of the United States, Obama, called on the current Congress to raise the national minimum wage, which proves that Obama actually supports raising the minimum wage. ‘February 2014 Congressional Budget Office Report The Effects of a Minimum-Wage Increase on Employment and Family Income is the latest attempt to do so, in this response to Members of Congress with respect to an increase in the federal minimum wage from $7.25 to $10.10 per hour.’
Minimum wage is a topic that has been popping up since the 1980s. From whether we should lower it, or even raise it, but now in the 2000s minimum wage has been the center of attention more than ever. There are two sides to this topic of minimum wage; whether it creates more jobs or does not create jobs. Those who argue that raising minimum wage will create more jobs will have a rebuttal which is that it does not only cause the loss of jobs but that it would make things much worse and vice versa for those arguing raising minimum wage will cause loss of jobs. There will be two authors representing opposite views, Nicholas Johnson supporting minimum wage will not cost jobs with his article “ Evidence Shows Raising Minimum Wage Hasn’t Cost Jobs”
Many people against raising the minimum wage create arguments such as, “it will cause inflation”, or, “ it will result in job loss.” Not only are these arguments terribly untrue, they also cause a sense of panic towards the majority working-class. Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has consistently increased, even when the wage has been
In this article, James Dorn and David Cooper argue whether raising the federal minimum wage will help or hurt low-wage workers. James Dorn, Vice President of Academic Affairs at the Cato Institute, argues that raising the federal minimum wage would hurt low-wage workers by reducing job opportunities and raising prices. Dorn also states that the federal minimum wage is responsible for high unemployment among teenagers and minorities and lower productivity among low-wage workers. David Cooper, an analyst from the Economic Policy Institute, argues that the federal minimum wage is not a living wage and that raising the minimum wage doesn’t have a significant effect on employment. Cooper also states that eighty percent of low-wage workers are at least twenty years old and that eighty-five percent of small businesses already pay their employees more than the minimum
There have been many arguments going on whether minimum wage should be increased. This action has its pros and cons. It can benefit many families as living cost has gone up, price for education is rising, and college students are in huge debts. Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people to earn little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. It has become the easy way for people to get easy pay.
In the eyes of the employees, the minimum wage raise is mostly a pro for them. There are three main reasons why increasing the minimum wage to $15 per hour would give benefits to both the employer and employees. Workers can make a decent living with a pay of $15 per hour. These people will then have a higher income that will enable them to pay their basic needs and living expenses. Back then in 2013, a report from the Congressional Budget Office estimated that 16.5 million low-wage workers would benefit from a $10.00 per hour wage; this includes 900,000 works coming up the poverty line ("The Effects of a Minimum-Wage Increase on Employment and Family Income"). So if employees receive a pay S15.00 an hour, the fewer people ar...
One way raising minimum wage will be beneficial is that it could lift many Americans out of poverty. Raising the minimum wage in Illinois, would help the families of more than 1.1 million workers who work to meet their children’s basic needs and “reduce the adverse effects of poverty on a child’s well-being” (Fiscal Policy Center). Studies have shown that raising the minimum wage would help 1 in 5 Illinois families who are in poverty. By raising the minimum wage in Illinois, it would help workers with families spend money on food, housing, gas, and other needs without going into poverty. Along with puling Americans out of poverty, raising the minimum wage could also stimulate economic growth. Raising the minimum wage, is stimulating economic growth by worsening the income inequality and substantially reducing the employee turnover for the business. Increasing a person’s income would raise their yearly earnings by $3,640 and “Improve the economic security and reduce the economies poverty rate” (Fiscal Policy Center). Low-wage workers spend most of what they earn on their basic needs, which is quickly spent and does not leave the worker with much money left to spend on other needs. This boost in the minimum wage will stimulate the economy and help create opportunities for more people, by hiring more workers to keep up with the
An economist for Unifor Jim Stanford stated "The wage is relevant, but it's of a second order of magnitude compared to the crucial question for any business, namely, is there a market for what I want to produce and sell? If there is, you'll probably hire people even if the minimum wage is higher.” As long as the company has a product that people are constantly willing to buy, hiring new individuals should not matter. However, if the consumer confidence is at a high because of the increase in the minimum wage, it would be beneficial for the company to higher new employees to keep up with the demand that
Younger applicants are less likely to obtain a job due to the inexperience. With an increase of wage, it is true it may attract more applicants but it does not guarantee a job. If the minimum wage exceeds the market wage, which is determined by supply and demand, this would cause employee to have hours cut or even terminated. Expressing statistically in a pros and cons argument, “In a survey of 1,213 businesses and human resources professionals, 38% of employers who currently pay minimum wage said they would lay off some employees if the minimum wage was raised to $10.10.” (Unknown, n.d.) With every 10 percent increase in the minimum wage, this leads to a 1 to 3 percent decrease in employment of low-skilled workers, which ultimately leads to a rise in unemployment. If hours are not cut and employees are not let go, businesses would be forced to fall. Minimum wage is not considered a livable affordable wage this is a problem for unskilled, uneducated people straining to start a career, or feed a family. To fix that problem the government would raise the wage to ignorantly short-term fix a problem, causing a long-term issue of inflation. Increasing minimum wage causes the worth of the dollar to decrease and ultimately causing inflation and rise of prices in all
Lots of people hear the term minimum wage and automatically assume it’s a good thing for the economy. From a macroeconomic standpoint, the ideal behind it is sound. Require companies to pay employees a minimum rate and more money will flow back into the economy. More money back into the economy means more of the company’s goods will be purchased. The increase in goods sold means more profit for the company. This concept sounds perfect, but most do not consider the adverse effects of a minimum wage. I have done some research, compared the pros and cons in order to see if it is actually a good thing for the economy.
The first issue with increasing the minimum wage is the fact that jobs would actually decrease. Employees are only worth what an employer is willing to pay them, and if the wage for employees exceeds what an employer is willing to pay then that job is lost. If the price of employees goes up, then employers may also not see the need for the amount of employees that are currently hired. It is projected by the Congressional Budget office that this hike in wages could result in over 500,000 lost jobs. One way that businesses may try to alleviate the pressure of expensive employees is to not have them at all.
Many critics claim that that raising minimum wage increases unemployment, especially for unskilled workers, and harms small businesses, including grocery stores and restaurants. The argument declares that companies such as these rely mostly on unskilled workers for labor, and if the minimum wage increases, then their profits and, therefore, hiring would decline, creating a...
However, there are those who see it completely the opposite way. Stating that by raising the minimum wage the economy would be better. More people would be able to support themselves; therefore lowering the percentage of poor people and raising the middle-class numbers. It is also argued that this change would not increase the number of unemployment, instead it could potentially raise employment by creating more jobs. Holly Sklar states in her research article, “Research by Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not.”