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Positive and negative impacts of raising minimum wage
Positive and negative impacts of raising minimum wage
Raising minimum wage pros
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Minimum wage is the lowest remuneration that can be paid to workers by employers. Although minimum wage laws are in effect in many jurisdiction, differences of opinion exist about about the benefits and drawbacks of minimum wage . Supporters of the minimum wage say it increases the standard of living of workers.The federal government established a minimum wage in a 1938 law called the Labor Standards Act, which also marked the first time that employers were legally required to pay workers overtime for certain jobs. At the time the law passed the country’s first minimum wage twas (0.25). The employers gained from this because it is required that all employers have to raise minimum wage which means nobody will be put at a disadvantage going
“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:
Understanding the basic concept of minimum wage is important for every single individual. We all live in this world together and it is obvious that there is an order. In order to continue our lives and afford our basic needs, we all need to work and gain wealth. As the old adage says ‘‘There ain’t a such a thing as a free lunch.’’ We need to give up on something that we like to get something else that we like. That’s why, every single individual in the society face trade-offs. However, people have different status. Some people work as employees and some work as employers. In that case of minimum wage the trade off is between employees and employers. Employees work for employers in order to gain money and afford their minimal living expenses whereas employers give up on their money and pay for employees because employers take care of their need of labor. Employers pay for their workers who we call employees and employees gain hourly money. The calculated minimum money that they gain in an hour base called minimum wages. Besides, there is this cycle that everyone actually works
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects.
Minimum wage was established state wide in 1938 by Franklin Delano Roosevelt; at that time it was only 25 cents which is equivalent to 4 dollars in today’s world. It was established as part of the Fair Labor Standards Act which covered youth, government and overtime pay. Massachusetts was actually the first state before Franklin’s statewide acknowledgement, and it only covered woman and children without overtime. There are lot of issues with minimum wage now such as setting a statewide minimum wage to $10.10, which does not benefit places were living is expensive such as in New York. It leads to an imbalance in different states’ economies, and the government setting price controls in wage has some issues.
A federal minimum wage has been around since 1938; starting out as a way to set wage precedents for workers, minimum wage has grown and changed in accordance with growing inflation for the past 76 years. Although a federal minimum wage allows workers to have a minimum amount of income that is necessary to survive and pay the bills, and it forces businesses to share some of the vast wealth with the people who help produce it, federal minimum wage costs the economy thousands of jobs and makes little sense due to cost-of-living differences throughout the country.
The United States hasn't always had a minimum wage. Before the minimum wage was introduced during the Great Depression of the 1930s, there was no national minimum wage, or indeed any legislation to protect workers from exploitation. Due to this lack of regulation, tens of thousands of workers were routinely subjugated in sweatshops and factories, forced to work in horrible conditions, and for only pennies a week. Early attempts by labor unions to create a mandatory minimum wage were ruled unconstitutional by the U.S. Supreme Court on the grounds that they “restricted the worker's right to set the price for his own labor.” This allowed employers to continue abusing their workers through the Great Depression of the 1930s, when the incredible demand for jobs caused wages to drop even further to an all-time low.
Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people earning little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. It has become the easiest way for people to receive easy pay. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. There have been many arguments going on, "Should minimum wage be raised or should it be lowered or eliminated altogether?" 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. It may increase poverty, but those
The definition of Minimum Wage is “an amount of money that is the least amount of money per hour that workers must be paid according to the law” (Minimum wage). Minimum wage, like other laws, are used to keep the economy in line. Minimum wage laws were invented in Australia and New Zealand with the purpose of guaranteeing a minimum standard of living for unskilled workers. (Linda Gorman) Minimum wage puts a price on the services one offers. Many different principles can be used to explain Minimum wage and explore the different aspects of it. Including what minimum wage does for our economy and the current status of it.
The first minimum wage was put in place by Congress in 1938 as part of the Fair Labor Standards Act. It was set at twenty-five cents. Since then minimum wage has continually fluctuated, and currently, it is $7.25, but Congress is now considering the Fair Minimum Wage Act (Whittner) which would, over the course of two years, raise minimum wage to $10.10 (Sherk). Adding almost three dollars to the United State’s minimum wage will most certainly have a large, positive impact on the nation. Congress should raise minimum wage because it would boost the economy, it would create jobs, and it would not be right to let people who work full time to live in poverty.
Employees who do not make at least minimum wage and classify as exempt which is now a narrower classification than before are required to be given to time-and-a-half pay after they've worked 40 hours in a week. The amendment to minimum wage permitted by law and overtime controls under the Fair Labor Standards Act will become effective Dec. 1, lifting long-standing exclusions and raising the pay limit from $23,660 every year to $47,476. Positions once thought to be executive, administrative or professional will now be liable to overtime pay also, and the pay threshold will be ordered to wage growth and updated every three years. "This [rule change] definitely will take merchants by surprise if they're not careful and don't pay attention," Mark Schulze, co-founder of smart point-of-sale system Clover, told Business News Daily. "It's a big change, so many people are affected by it."
The wages and hour law affected well over the 12 million people unemployed at the
They have long argued that requiring employers to pay workers more will force many of them to either cut back on hours, put off hiring, or lay off employees in order to keep their labor costs down. “Raising the minimum wage will kill jobs and stifle economic output,” NFIB Manager of Legislative Affairs Ashley Fingarson said earlier this week, as the organization sent a letter to the Senate urging lawmakers to vote against a bill that would raise the minimum hourly rate from $7.25 an hour to $10.10 an hour. (The Washington Post) Many businesses will be hurt by the increase in wage rate due to lack of expenses of paying employees more, causing businesses to lose money and even go out of
Minimum wage, a basic standard that sets the lowest wage rate that an employer can pay employees. One of the main reasons of minimum wage is to protect non-unionized workers in unskilled jobs. This is because a minimum wage constitutes a base that employees or their unions may use as a starting point. Adjustments to the minimum wage are required from time to time to account for changing economic and social conditions. As a citizen working 2 minum wage job to support my family, i beilive we need to increase minuim wage. In canada there is about 3.2 million people like me, who live in low income, including 634,000 children. Latly there has been a high increase in the poverity rate. There are between 150’000 and 300’000 indivuals that experianse
Minimum wage is the lowest hourly pay employers are legally able to pay their workers. In United States there is huge debate on whether or not to raise the current minimum wage rates from seven dollars and twenty five cents per hour. States are leading push to increase the minimum wage by Democrats who appeal to working class Americans. Congress want to increase minimum wages above seven dollars and twenty five cents. The issues of whether to raise the minimum wage or not.
First we must ask ourselves, what exactly is the minimum wage and the purpose of it? The minimum wage is the base rate of pay an employee receives for ordinary hours worked, and is dependent