The minimum wage debate brings about a range of reactions from different people. There are those who believe that there shouldn’t even be a minimum wage and that wages should be determined by the markets. On the other hand, we have those who vigorously argue for increasing the wage minimum citing inflation, the poverty line and worker productivity. Regardless, we do have a federal minimum wage rate in the United States at $7.25 per hour, with some states having a higher minimum wage than the federal minimum. President Obama, in his first state of the union address of his second term proposed “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” (The White House 2013). A year later, he has revised that number to $10.10 per hour after signing an executive order that has already raised the minimum wage for federal workers to that number. (The White House 2014). With more and more states raising their own minimum wage, a minimum wage increase seems almost imminent with Democrats and Republicans getting closer to a deal. (Bolton 2014). But we are more interested in the efficiency of a minimum wage implemented at the federal level. The main question that surrounds this debate is whether this price floor in labor markets is efficient given that the stated goal of the minimum wage is to make sure full-time workers earn a living wage and are above the poverty line.
To begin, there is an extensive debate over whether if the U.S were to raise minimum wage, could it really help the working poor of low income families. Nancy Cook, in her article from the National Journal, “Why a Minimum-Wage Hike Can’t Help the Poor”, she points out that two thirds of around 100 surveys from 2007 had a negative effect and that it does more for the middle class than the lower one. (p.14). So, therefore, from her
“A 15 percent increase in the minimum wage nationwide would destroy about 290,000 to 590,000 young people's jobs, and about 400,000 to 800,000 jobs overall” (Henderson, David R). Due to the Fair labor Standards act, the federal minimum wage, or the lowest you can pay an employee for work, currently stands at $7.25 an hour. Although a number of Americans think that raising the minimum wage would benefit our country, it would actually bring a number of problems to our economy, such as a rise in job loss and high school dropout.
Paying for a college education creates a dilemma when a student only earns minimum wage flipping burgers at a local fast food restaurant. The current federal minimum wage stands at $7.25 per hour before taxes. The debate on whether it should increase or remain constant has been occurring for many years. Raising the minimum wage to match the current cost of living seems like a good idea, but this could cause some negative effects. John Komlos’ article “Why raising the minimum wage is good economics” delivers a more effective argument than Rex Huppke’s article “The argument against raising minimum wage” through the use of ethos, logos, and a valid conclusion.
One of the most talked about subjects in the U.S economy is the topic of minimum wage. With president Obama’s increase in the minimum wage to 10.10$ per hour people, both economists and politicians alike, have been debating whether 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
Life is a struggle and finding a job and paying your bills is not always easy in this world today. A major debate that has been an issue is whether there should be a law to raise the minimum wage. The minimum wage is the lowest hourly salary an employer can pay an employee for their work. According to Williams (2013), “The minimum wage was signed into law by President Franklin Roosevelt in 1938”. The first minimum wage was 25 cents per hour. Since then, the minimum wage has been increasing as the last increase of Florida's minimum wage was an increase of 14 cents on Jan. 1, 2014. This federal increase makes it 68 cents higher than the federal minimum wage of $7.25. Gibson (2014) states “Obama, who last year called for an increase in the
Raising minimum wage has been an ongoing issue for many years. Similar to every debatable issue, pros and cons are inevitable. In the United States, minimum wage started when the Fair Labor Standards Act of 1938 (FLSA) was passed and minimum wage started at 25 cents per hour. The purpose of setting a minimum wage is to set a maximum workweek and to eliminate child labor. It is defined to be the least amount of money employers are obligated to pay their employees by law. As the years passed, the minimum wage began to increase to accommodate the growing economy. Although the wage has increased from a mere 25 cents per hour to $7.25 over the course of 75 years, living expenses are much higher causing many people to be poverty stricken (Debate.org). President Obama proposes raising the minimum wage, so that it would help minimize the income gap in America. However, most business organizations and the Republicans oppose to the idea, saying that it could potentially lead to more economic problems. While both sides have valid points, which one provides a more compelling argument? In the United States, the minimum wage should be raised in every state; therefore workers can have a more comfortable standard of living, lower the poverty line, and minimize the income gap.
Franklin Roosevelt introduced minimum wage as a part of Fair Labor Standards Act of 1938. The purpose of minimum wage were to prevent poverty and to stimulate the economy by increasing consumer’s purchasing power. However, in 2015, 78.2 million workers were paid hourly, representing 58.5% of all workers in the United States. Among those people, 870,000 workers earned the minimum wage, $7.25 per hour and 1.7 million workers earned below the minimum. In total, 3.3% of workers earned exactly or below the minimum wage. For years, there have been heated debates about whether the government should raise the minimum wage. In 2016, California, New York, and Washington D.C. agreed to increase the minimum wage to $15 per hour. Some people think raising the minimum wage will decrease poverty and improve the workers living. Instead, raising the minimum wage will make the job market more competitive and it will increase the poverty level. When minimum wage was raised to $10 per hour, it benefited 16 to 24 million people while half a million workers lost their job. Rather than improving, Faces of $15 will damage the U.S economy and deeply hurt living condition of Americans.
I believe that raising the minimum wage would be an effective strategy to reduce the high poverty rates that have been problematic for many years. In 2015, about 172,620 Maine people received an income that was below the poverty line. I have seen how hard it can be to find a job that pays more than minimum wage in rural Maine areas, so finding a better paying job is not always an option.
For this discussion I chose the article from The Huffington Post about raising the minimum wage to $15 dollars per hour. Recently someone told me about the minimum wage increasing for residents on the West Coast and specifically located in Los Angelas. As this article explains, raising the wages will occur over a timeframe of five years starting in 2020 and will have slower effects for businesses with 25 or less employees. The risk of businesses laying off employees due to sudden high wages being payed out is one that I feel is not being thoroughly examined. There is no safety net for employees as they begin to enjoy higher wages but soon might be faced with the reality of layoffs when businesses just cant afford to pay them any longer.
Millions of Americans live in poverty, unable to find high paying jobs to support themselves and their families. Common belief persists that paying a higher minimum wage would aid in lifting people out of poverty by giving those with low paying jobs a higher income, however the evidence suggests otherwise. As the 2016 race for the White House heats up, the minimum wage battle stands at the forefront of every economic discussion. The rhetoric between candidates within and across party lines intensifies by the day. While the debate over whether or not to raise the federal minimum wage from $7.25/hour to $15/hour rages on, one side continues to stand out from the other.
A full-time, minimum-wage worker earns about $15,000 per year, which is below the federal poverty line for a worker with just one child. When there’s a significant gap between the wage floor and what it takes to live, not only do workers suffer, but good employers are penalized. Businesses that may want to pay a livable wage fear being cut by employers who pay less wages for even the slightest price advantage. One needs to raise the minimum wage to the point where the lowest-paid worker can afford their basic needs. An increase to $10.10 an hour as proposed by President Barack Obama would restore the wage floor to the same value it had in the 1960s. In doing so, it would lift earnings for nearly 28 million workers nationwide roughly 1 in 5 U.S. workers. Opponents claim that raising the wage floor will do more harm than good, forcing businesses to reduce staff, cut hours or hike prices.
“No person can maximize the American Dream on minimum wage” (Todd). For several years, minimum wage has been an issue among the citizens and politicians in agreeing on the exact value. This is based on the reason that minimum wage determines living standards for the population as well as the economy of a country at large. Minimum wage is regarded as the lowest level of remuneration that employers are needed to pay their workers under various legal jurisdictions. Currently, almost every person in the US including the wealthy, middle income and the poor have a great urge for having an increased pay per hour due to the current economic demands. Therefore, based on the needs of the populations and looking at recent economic studies and research,
“Economist have stated that the value of the minimum wage was at its highest in the 1960’s; since then, it has been outpaced by the cost of living, leading to a serious decline in wage value” (Pacitti). “An Analysis by the Economic Policy Institute, a left-leaning research organization, suggests that raising the federal minimum wage to $9.80 would increase pay for more than 28 million Americans, increase the gross domestic product by more than $25 billion and create the equivalent of more than 100,000 full-time jobs” (Greenhouse). Just five years after the worst of the financial collapse is over, an increase in jobs and pay by that amount would substantially increase our economy, those who earn more, spend
Federal and state minimum wage laws will ensure that employees are paid equally and compensated in that it will also ensure that employees can earn above poverty level wages. In addition to ensure that as many capable people are in the workforce, it will also trigger other possible characteristics in the workplace. “A rise in the minimum wage increases the demand for workers with greater skills because it reduces competition from low-skilled workers” (Wilson, 2012). However, most employers need to function within their budget. This is true in the not-for-profit organization that we work for, as the majority of the cost must go to the children and family in care. Nevertheless, in order for best practice services, there is a need to hire experienced employees at a competitive rate. The increases in the in the minimum wages will require some organizational plans that may not be beneficial to running the business, such as “firms may reduce work hours, such as with fixed employment costs and worker heterogeneity, but maintain headcount” (Wilson, 2012).
The idea of having a federal minimum wage is a good one. The idea is to protect low and unskilled workers from discrimination and allow all workers to earn a living wage. The recent debate on the floor, though, is whether or not to raise the minimum wage from the current $7.25 per hour up to $10.10 per hour. President Barack Obama made this proposal during his annual State of the Union Address on January 28, and following this there were many hot debates about it. The debates focused not only on the advantages and the disadvantages of increasing the minimum wage, but also the alternatives to increasing it.