Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways

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.
In the 2013 State of the Union, President Obama proposed raising the minimum wage from the current $7.25 to $9.00 by 2015. This has caused arguments between the rich, small businesses, minimum wage workers, and the unemployed because it affects each of them differently. Obama’s plan is to bind the minimum wage to the cost of living, which ensures that minimum wage goes up with inflation. In general, this benefits minimum wage workers by improving their standard of living.
Minimum wage workers are enthusiastic about Obama’s plan, but small businesses and the unemployed are not so happy about it. This proposal however is a binding price floor, which is a price minimum, in this case, established by the government. This will incentivize more people to search for work while disencouraging firms to hire new workers or even maintain their current ones. This is an example of a surplus. A surplus is “A situation in which quantity supplied is greater than quantity demanded
“No family gets rich from earning the minimum wage. In fact, the current minimum wage does not even lift a family out of poverty.”
— Jon Corzine
Many people can think back and remember what it was like to put in an application for that first job and be presented with a position. Taking that position represents adulthood and is a very exciting time for a young person. All first jobs usually start with a minimum wage. Minimum wage is the minimum an employer has to pay an unskilled worker based on the regulations set forth by the Fair Labor Standards Act (FLSA) that was originally established in 1938. As people think back about their first jobs they can also remember what the minimum wage was when they took that position. Minimum wage is only increased based on the cost of living from the prior year. If the previous year shows an increase then the minimum wage will increase in the coming new year. Sinegal (2009) stated “The increase in the minimum wage is long overdue. Paying your employees well is not only the right thing to do but it makes for good business”. Based on the cost of living we show for the year of 2009 minimum wage will not increase for 2010. Minimum wage is currently at $7.25 per hour. Most people who start at this rate are young people who are in high school or college and are working a few hours to help pay for school. After they graduate they can apply for better jobs and move on. People who live in areas without growth, single mothers trying to raise their children, and uneducated people are working more than one minimum wage job to make enough money to pay their financial obligations.
There are unemployed people in every society. Unemployment occurs when people in society who desire works are unable to obtain it because there are not enough jobs or they are not qualified for that job. It is difficult to live a normal life in today’s society without a job because having a job means earning income. Unemployment is like a disease that is spreading everywhere. There are many reasons why people are unemployed these days. Some of the common causes of unemployment include getting fired, getting laid off, companies going out of business, and bankruptcy. The three major reasons for an increase in unemployment these days are because of expensive education, advance technology, and minimum-wage.
Unemployment affects everyone. Often, job loss and long unemployment can stress out people. People’s behavior towards all things around them changes significantly after they lose their job. Consequently, their attitudes and behavior toward unemployment also affects their relationship with other people around them. In the last few years, many people lost their jobs due to a lack of education. There are many people in America who do not have college or school degrees. The reason for this is that in the last few years, education has become so expensive that not everyone can afford it. These days, most companies hire people who have
Since the easy communication and accessible transportation to all over the world, they can easily establish their manufacture plant in other part of the world where low cost labors are available, resulting loss of significant number of jobs at the country.
Every time when the wages increases the company has to raise the price of its service or the product in order to maintain the raised expenses. Now, in the competitive America there is tough competition to sell better product and service in competitive price. The native company cannot compete with those multinational companies who are using low cost labor overseas. As a result, company cannot survive resulting losses of jobs and bad impact in the economy. Other experts have different opinion on raising the minimum wages. They believe that by rising minimum wages it actually helps the country and its economy to get better. They thinks that if there is no minimum wages, the company can force a skilled staff to work in low pay and exploit the basic right of a labor. Economist has another logic that if there is no minimum wages raised the money will not come back to the community; money will go to handful executives and owner of the company. This way although the company can perform well, it can generate significant amount of profit but the main working labor are not benefited. This can result the increase in the distance between the corporate community and the labor
Both the republicans and democrats have spent some big bucks lobbying their insights on the matter. There has been a lot of subjective and objective arguments that are reasonable on both the pros and cons of increasing our national minimum wage. To add to the drama associated with this topic, President Obama endorsed a bill proposing a nearly 40% rise from $7.25 to $10.10 per hour. The President has been campaigning around the country ever since his State of the Union address, pushing congress to raise the minimum wage to $10.10 an hour. Many say this is too high due to the costs of enacting such an increase, and many say this is a little low due to the increased cost of living. After looking into both sides of this debate, I realize that overall it would be better for the well-being of our nation to increase the minimum wage due to the short term and long term costs that an increase of the minimum wage could lead to. In terms of helping out the lower class and poor citizens of the United States, increasing the minimum wage level is not the answer.
Many argue that raising the minimum wage makes hiring workers more expensive, eliminates jobs at the bottom, slows growth and ultimately raises unemployment.
Whether minimum wage should be state or federally mandated is the question that state representatives all across the nation are questioning. The minimum wage law changes by each job, every state, and people who get the short end of the stick are wondering ‘why?’ There is no doubt that minimum wage should be the same for all citizens. All employees should be treated and paid the same depending on the department and their position. It is extremely unethical that ordinary people obtain a larger salary than those who have more experience. Minimum wage should be the same for every person that start a new job. As a legal adult in today’s society, I recognize how the nation financially struggles on a day to day to basis.
Stated in article In U.S., 71% Back Raising Minimum Wage they state that minimum wage is going to raised to nine dollars. “Obama called for the wage increase in his Feb. 12, 2013, address to Congress, saying, “Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9 an hour. We should be able to get that done.” More specifically, Obama is calling for an increase to $9 by the end of 2015, after which it would be indexed to inflation”(Saad). Not one man or women should live in poverty stated by obama. minimum wage need to be raised for all americans to be able not to live in poverty and to be able to support their families. Obama wants everyone to be able to live well and have a good life. Also he wants everyone to be treated the same way and for them to be able to have a good life.
Although many may want to raise the minimum wage others agree not to raise it. Lydia Saad reported that people may disagree cause of the economy.”Seven in 10 Americans say they would vote “for” raising the minimum wage to $9 per hour if given the opportunity, while 27% would vote against such a bill.”(In U.S., 71%). Some americans believe if minimum wage is raised that the worlds money and debt would put us in a bad position. the economy will have a down fall and may cause us to be in more debt. The people that disagree for this bill are the ones that make
Labor Standards Act of 1938 (FLSA) or otherwise known as the Wages and Hours Bill. This new law created a maximum forty-four hour workweek, guaranteed “time-and-a-half” for overtime hours in certain jobs, banned oppressive child labor, and established the nation’s first minimum wage. By definition, a minimum wage is the lowest wage permitted by law or by a special agreement (such as one with a labor union). Throughout the years, the minimum wage has been a central debate topic for the socioeconomic world…
“Paying your employees well is not only the right thing to do, but it makes for good business”-Jim Sinegal, CEO of Costco. Many of America’s employees are not being paid well, however, for the annual income of a full-time employee who works year-round is less than $16,000 (about $15, 080) according to the current federal minimum wage (Rebuilding). To put into retrospect how out-dated the federal minimum wage is, consider that the minimum wage of 1956 amounted to exactly $7.93 in 2009 (Henderson). How progressive is it that our nation’s workers being paid less today than workers from the 50’s? The federal minimum wage should be raised in order to assist families out of poverty, to ensure the effort and loyalty of workers, and
America’s thousands of tipped employees (such as waiters and waitresses and nail salon workers) earn $2.13 an hour on the current federal minimum wage (Rebuilding). These people rely almost entirely on the random and unpredictable decency of strangers giving them the tips they are due. Before one complains about lazy couch-potatoes who don’t want to work and are pampered by government assistance, take a peek at the 2008 Conference of Mayor’s Hunger and Homelessness Survey, which states that the 42% of persons requesting emergency food assistance were employed (Henderson). Do also keep in mind the thousands of single mothers struggling to rear their children in our country and the
The Effects of a Higher Minimum Wage When I was eleven years old my parents told me that they could not afford to buy me new school clothes that year. So, in my desperation for some new school clothes I started working. I did odd jobs on farms for family and friends, as well as babysitting. I worked that whole summer of my 6th grade year, and I continued to work every summer up until my senior year in high school when I started to work full-time. I started helping pay my parents rent when I was thirteen and bought most of my own food as a young adult. I bought all of my cars, and I am paying for my own school. So you might ask “why were we so poor? Was it because you had deadbeat parents? Did they not work full-time? What?
Consumers would have to spend more money for the same goods and as a result of that the poverty line would actually be raised if the minimum wage were to be raised. I will discuss into further detail about these topics and who the raised wages would actually affect, and the answer is surprising. The people that would take the biggest blow are the stake holders of large corporate companies that would have to raise the cost of employee wages if the minimum wage were to be raised. If a corporation with 10,000 employees working forty hours a week had to give their employees a fifty cent raise, they would lose over ten million dollars a year. Now I do not know about you, but if I had a company and I was about to lose ten million dollars a year I would be trying to compensate for it. Wilson (1999), states that if the federal minimum wage were to be raised companies might respond in such a way that may cost employees their fringe benefits. They would lose hours, medical benefits, yearly bonuses and merit based raises.
Okay, so some people may lose benefits, but at least they are able to bring home more in their pockets. Fair enough, but what if that wasn’t enough to compensate for the profit loss in companies? So now what? Well the company’s only option is to fire some employees. Sherk (2007), states “that most estimates suggest that each ten percent increase in the minimum wage reduces employment in affected groups of workers by roughly two percent.