Free Essay

Minimum Wage and Economic Growth

In: Business and Management

Submitted By roosh9292
Words 1963
Pages 8
Ayman Lam
Macroeconomics
June 11, 2014
Dr. De

Term Paper: Minimum Wage and Economic Growth Economic Policy Institute, most commonly known as EPI, has always been a crucial factor in the effort to increase minimum wage and highlighting its positive effects for blue-collar families as well as the general economy. As of today, twenty-one states including Washington, D.C. have already advanced in setting their minimum wage above the federal minimum of $7.25; in other words, almost half of the United States workforce is now under the influences of minimum wages above the federal minimum. Therefore, EPI took the opportunity to conduct data and reports from these states, with the aid of the Economic Analysis and Research Network, also known as EARN, in order to advance economic policy at both state and regional levels, and at the same time, demonstrating the insufficiency of having $7.25 as the minimum wage. President Barack Obama, during his State of the Union, requested for a raise in minimum wage. In the late 1960’s, the purchasing power of the minimum wage was at $9.22 an hour in 2012 dollars, which is nearly two dollars above the current level of $7.25 an hour. Inflation is a cause of reducing the purchasing power of the dollar; so as a result, when the minimum wage is raised, the purchasing power of the eventual wage is less than the proposed nominal dollar value. The minimum wage is twenty-three percent less than its peak inflation adjusted value of 1968. One of the reasons that many support the increase of the wage is the fact that the current low-wage workforce is far more educated than the low-wage workforce in the 1960’s. In 1968, forty-eight percent of low-wage workers had a high school degree while in 2012, seventy-nine percent had a high school degree. Respectively, in 1968, approximately seventeen percent of the low-wage workers had college experience, compared to the forty-six percent in 2012. The central point here is that minimum wage in 2013 is much lower than it was in 1968, comparatively, despite the workers receiving much more education. EPI released an analysis of the Fair Minimum Wage Act of 2013, announced by Senator Tom Harkin and Rep. George Miller, that engaged to raise the federal minimum in three stages of $0.95 from its current level of $7.25 per hour to $10.10 per hour. Since that Fair Minimum Wage Act has been released, minimum wages have increased at state levels. The goal of the EPI by raising the federal minimum wage to $10.10 by 2016 is to increase the incomes of millions of working families in order to enhance the Gross Domestic Product (GDP) of the U.S. With the Harkin-Miller proposal, raising the wage would return the federal minimum wage to approximately the same inflation-adjusted value in the 1960’s. Also, the GDP would grow by about $22 billion, which would supposedly create 85,000 new jobs. Inflation gradually destroys its real value every year that the federal minimum wage becomes stagnant in nominal dollars, which simply means that workers relying on that minimum wage are not capable of purchasing as much as they are used to in the previous years. This kind of pattern could become a tremendous threat to low-income families because basic necessities could be something difficult for them to afford. Currently, with the federal minimum wage held at $7.25, a parent who is a full time worker is not able to reel in enough income to cross above the federal poverty line. Taking a quick look at the 1960’s and 1970’s, a family consisting of two people and working with minimum-wage income could be considered above the poverty line. In the late 1960’s, at one point, a minimum-wage income family of three made enough to make it above the poverty line, but still fell short of the poverty line for a family of four.
Within the past forty-five years, the U.S. economy has continued to develop and grow, with productivity nearly doubling itself, meaning the capacity to produce goods and services increased given the same amount of work, due to technological advances, higher education, etc. Nevertheless, the federal minimum wage has managed to remain standing still. The growth of U.S. productivity has advanced at a much higher rate than that of both the real U.S. average wages and real minimum wage.
The increase of the minimum wage to $10.10 per hour directly and indirectly affects different groups of workers, most of whom, contrary to popular belief, are not part-time working teenagers (who usually obtain jobs as a means of earning extra spending money, rather than supporting a family). With the proposed incremental increases over the next few years, the figure below displays the number of workers who would be both directly and indirectly affected.

The first increase of $0.95 to $8.20 per hour would directly affect approximately 7.0 million workers (those who are earning between $7.25 and $8.20 per hour). Then about 2.7 million are indirectly affected by the increase (those who are earning barely above $8.20 per hour); these employees, although not working at minimum wage, are most likely receiving a raise, creating a higher yearly income. As the proposed plan continues into 2015, the federal minimum wage is increased another $0.95, which results into $9.15 per hour. With this raise, around 11.1 million workers will be directly affected, while leaving 6.5 million indirectly affected. In the final year of the proposed plan, the minimum wage would increase to $10.10 by 2016, where 16.7 million workers would be directly affected and 11.1 million indirectly affected, causing a total of about 27.8 million U.S. workers seeing some sort of pay increase. The gender distribution of workers directly affected by increasing the minimum wage to $10.10 is slightly dominated by women. As of 2013, females make up 49.2 percent of total employment (a pretty even distribution). However, as shown in the figure above, where a total of 27.8 million would be witnessing a pay increase by 2016, about 55.0 percent of that specific population would be compromised of women. Of course, the number is varied from state to state; about 64 percent in Mississippi all the way down to 48 percent in California. The most usual misconception about the low-wage workforce is that it is essentially made up of teenagers and the young population; when in fact, teens account for only a tiny portion of low-wage workers. If the increase of the minimum wage to $10.10 were to be enforced by 2016, only about thirteen percent of those affected by the change would fall into the “teenager” category. To paint a better picture of the demographics that are affected, there are more low-wage workers above the age of fifty-five than there are teenagers. The average age of workers that are affected is thirty-five years old, where more than half are at least thirty, and about thirty-five percent are at least forty years old. This action would also affect a large array of families who fall into the grouping of low to middle-income levels. Using the Current Population Survey Outgoing Rotation Group micro data, about 23 percent of have family incomes less than $20,000, 28.8 percent fall between $20,000 and $39,999, and 17.0 percent make between $40,000 and $59,999. With the use of the American Community Survey, the 2012 median family income was $62,527, meaning that almost 70 percent of affected family incomes fall into the bottom half of the income distribution.
It’s a proven pattern and common sense to believe that typically, low-wage workers tend to spend their additional earnings in order to acquire their basic necessities. On the other side, high-income families are capable of using any additional earnings as a means of saving. Increasing the minimum wage can offer a decent lift to overall economy for this very reason: it would give low-wage income workers the ability to immediately spend their money. The Federal Reserve Bank of Chicago conducted a research that with the raising of the wage to $10.10 could increase the U.S. GDP by at least 0.3 percent. The research also showed that it would stipulate a supplementary thirty-five billion dollars in wages and produce a net increase of $22.1 billion in economic activity, which would lead to increased consumer spending, which in turn would enhance the U.S. GDP; this was concluded even with the consideration of increased labor cost and price increases for consumers. With the GDP increasing, 85,000 new jobs could be created.
Of course with every story there’s two sides; some believe that raising the minimum wage would have negative effects on the economy. An example that was used to showcase the negative effects was this: if a teenager were to apply for his first job, his skills would be little to none. With that in mind and the minimum wage set at $7.25, he or she would be hired if they are capable to produce at a rate higher than $7.25 per hour. However, once the minimum is raised to $8.20 per hour, that teenager will not employed, but rather someone else with a productivity rate higher than $8.20 will be hired. There are also benefits that may be decreased in order to counterweight the higher minimum wages. In turn, this could cause a ripple effect in the workforce, forcing participation rates to fall, and even unemployment rates to increase.
Some believe that minimum wages shouldn’t even exist, believing that it inhibits the right of contract. Consider an unemployed individual looking for a job and is willing to work for $5 per hour, more people will have the opportunity to keep their jobs and employment. Where instead if the minimum wage is set at $7.25 per hour, that employee wouldn’t receive any income, and therefore, becomes unemployed. That individual will be worse off; this acts as a domino effect and taxpayers receive the “bad end” of it as well because they would have to pay for the upkeep.
Nevertheless the negative effects, specific groups of people will continue to support the raise in minimum wage. As of today, twenty-one states including the District of Columbia have already progressed in placing their minimum wage above the federal minimum of $7.25 per hour. As more and more states begin to adopt the proposed Harkin-Miller plan, we come to this conclusion: increasing the minimum wage to $10.10 by 2016 would elevate the earnings of millions of low to moderate-income working families, which in turn would heighten their spending power.

References
Cooper, David. "Raising the Federal Minimum Wage to $10.10 Would Lift Wages for Millions and Provide a Modest Economic Boost." Economic Policy Institute. N.p., 19 Dec. 2013. Web. 11 June 2014. <http://www.epi.org/publication/raising-federal-minimum-wage-to-1010/>.
Shierholz, Heidi. "Increasing the Minimum Wage to $10.10 Will Make Low-Wage Workers and Their Families Better Off." Economic Policy Institute. N.p., 14 Feb. 2014. Web. 13 June 2014. <http://www.epi.org/blog/increasing-minimum-wage-10-10-raise-wages/>.
Tennant11, Michael. "Minimum Wage: The Ups & Downs." Minimum Wage: The Ups & Downs. N.p., 11 June 2014. Web. 12 June 2014. <http://www.thenewamerican.com/economy/economics/item/18428-minimum-wage-the-ups-downs>.…...

Similar Documents

Free Essay

Minimum Wage

...Minimum wage In our country so many people live in poverty. Even if they are working hard and doing everything right. Except the government who has been spending so much money on foreign soil that we have none left to spend on ourselves. Minimum wage is not as high as it should be with all of these outrageous prices and spikes in gas and food. It should at least be bumped up to eight dollars an hour starting out or maybe more. In these times of need we need companies to start appreciating there help instead of working them to death with little to show for it. I understand that our country is in crises with the economy being so bad. I also understand that we should help other countries if we can because we may need help in the future and making allies is a big deal. And, on a cynical level, I suspect that the government may know more about this kind of stuff than we do. Nevertheless, the government’s solution to cut pay or lay off hardworking people is unfair to our country and to the everyday, hardworking people of our country. Knowing how it feels to be a hardworking American I support the raise in minimum wage. Having two children and a husband who is not working being a single working household, I know how hard it is trying to live on minimum wage. I probably have the least amount of bills a person can have but we still struggle every day. The government’s decision not to raise the minimum wage already is turning people against everything it stands......

Words: 454 - Pages: 2

Premium Essay

Minimum Wage

...0822881 Minimum wage bill defeated in Parliament Introduction: The demand to raise New Zealand’s minimum wage has decline. We live in a society where government has to make balance between employers and employees. Workers want better paying job and at the same time employers want to control labour cost. Therefor government put the floor of minimum wage “a minimum wage is the lowest wage that each employee can legally get from an employer” (exclusive papers). This is the lowest amount that a worker can sell his/her labour and that is what we need for better economy right now especially not a price ceiling which is "a set below the market price, then a "shortage" is created; the quantity demanded will exceed the quantity supplied"(week 3w/s).However increasing the minimum wage dose have many consequences on society, people will have better standard of living and encouraging more people to work but at the same time it will affect the employers in increase on their production costs. Therefore the employers has to cut down the staff and it could be hard to find a job for unskilled workers, youth or adults could also face problems in finding the job, which may result as increase in unemployment. Body: Economist needs assumptions to simplify the reality and models to apply (lecture1).As we take simple demand and supply frame work if the price of a commodity goes up, the demand of it goes down (week3) it is the same in case of labour market if government increases......

Words: 1067 - Pages: 5

Premium Essay

Minimum Wage

...Shukla; Ashish; 1381406 Minimum wage INTRODUCTION The 2012 minimum wage bill in parliament is defeated, and created dissatisfaction in society, as people are really struggling to manage their lives, especially particular section of society who is unskilled and working on minimum wage. Now to understand the issues we have to look into two perceptions first from general public for whom good life means more money, second from economist mind for example Tim Maloney who studied series of data from 1985 to mid 1990 to addresses the impact of minimum wage change on teenagers and young adults. He finds negative impact of minimum wage on youth and young adults labor market, with demand elasticity of -0.35, and over longer time period -0.38(Chapple,1997). Now suppose a young adult who don’t have job and gets one but employee don’t want to pay minimum wage as he thinks he will lose money, in this situation as government has set price floor for wages and ready to pay government benefits from tax payer money but will not allow anyone to work below minimum wage, in this case government is losing money and increasing unemployment. In this situation if minimum wage increase, can create imbalance in economic structure, and if not will create dissatisfaction in normal public. EFFECT ON SOCIETY Increase in minimum wage has different impact on society; it’s suggested that some segments of society which will be affected like youth (16-18 age), adult (20+......

Words: 1205 - Pages: 5

Premium Essay

Minimum Wage

...Introduction This critical literature review will focus on the impact of the National Minimum Wage on employment. This is an area we have had to familiarise ourselves with more and more throughout the last ten years because of the controversial effect of its instalment in April 1999 and its ever increasing minimum wage amount which causes most concern. The application of a few statistics should help summarise the ever increasing minimum wage and the sheer scale of people affected by its introduction. The national minimum wage has increased by a staggering 59% in the last ten years; from £3.60 in April 1999 to £5.73 in October 2008. (HRM, 2008) According to George Sayers Bain (1999) as from April 1999, the year of its instalment , “some two million low paid workers will gain. To put that into a different context is one in twelve employees; one in three house workers; one in five part time workers. The obvious reason for its introduction was to reduce poverty pay levels while at the same time decreasing the wage differentials of the minimum wage to the median wage of all workers. This is known as ‘the bite’ and is commonly used to assess the effectiveness of the minimum wage. (LPC, Low Pay Commission, 2007) As stated above the intention of this review is to firstly establish the effect of the National minimum wage on employment; justifying it as a positive, negative or mutual effect. Secondly to help incarcerate the purpose even more the retail sector will be focused on...

Words: 2214 - Pages: 9

Free Essay

Minimum Wage

...A huge controversy in the economics world in 2012 has been a possible raise of the minimum wage from $7.25 to $9.00. Many supporters of this increase believe that a $9.00 minimum wage would enable many adults to make enough money to live off for a year. This wage increase would give low-income families a chance to make more money to support themselves and their families. Following this, supporters say these so called “low-income” families would spend more, thus resulting in an increased flow of money in the economy. However, what these supporters do not see is, many of these families will go to large department stores or super stores to make their purchases. With these large stores getting all the money many small businesses will be forced to close their doors. In addition to small businesses losing these customers, employers will be faced with another tough decision. In many small businesses employees are paid based on their skill, position, or time of employment. Many of these workers are paid the minimum wage because employers of a small business are unable to pay them any higher in order to keep their store or shop open. So what happens? Employees that currently being paid $7.25 will now be paid $9.00 and those higher level employees being paid $9.00 would be also given an approximant pay raise to $11.00 per hour. Now, how does this hurt small business owners? Here is a possible scenario. Max is the owner of a small sports shop in Waverly that has been open for ten......

Words: 866 - Pages: 4

Free Essay

Minimum Wages

...rights affected by it. Here’s the closest we get to a definition of procedural fairness: In the context of governmental decision making process, fairness means a procedure that is open and transparent allowing those affected by the decision to fully express their views or arguments and to provide evidence supporting their case, both of which are to be considered by the decision-maker. Minimum wages are typically established by contract or legislation by the government. The minimum wage attempts to protect employees from exploitation, allowing them to afford the basic necessities of life. The impact of minimum wages on employment is very important to emphasise that the employment impact will not likely occur in the form of a short-run response of laying off or terminating workers whose wages are now increasing because of the minimum wage. Rather, the response will likely occur in the form of slower employment growth in the areas of low-wage employment affected by minimum wages. In the meantime, the income levels of CEOs have soared while many more Ontarians have been stuck in low-wage jobs and students are working far more hours in multiple jobs to help pay for university tuition. A job should lift employee out of poverty, not keep in poverty. We are purposefully not trained to assume responsibilities other than the very limited areas in which we are given detailed instructions and rules. That is because elites proactively seek compliance rather than......

Words: 811 - Pages: 4

Premium Essay

Minimum Wage

...RAISE THE MINIMUM WAGE TO $14 AN HOUR USING THIS ONE WEIRD TRICK! February 26, 2014 Share on facebook Share on twitter Share on email Share on print More Sharing Services 1.1K Democrats believe they've hit on the perfect issue to distract from the horror of Obamacare in the 2014 elections: the minimum wage. Apparently, increasing the minimum wage was not important for American workers during the first five years of Obama's presidency -- least of all his first two years, when Democrats controlled Congress and could have passed anything. (And did!) No. The minimum wage did not become a pressing concern until an election year in which the public's hatred of Obamacare is expected to be the central issue. As The New York Times explained, Democrats see the minimum wage as an issue that "will place Republican candidates in a difficult position," and also as a tool "to enlarge the electorate in a nonpresidential election, when turnout among minorities and youths typically drops off." (Unlike Republicans, Democrats consider it important to win elections.) To most people, it seems as if the Democrats are giving workers something for nothing. But there are always tradeoffs. No serious economist denies that increasing the minimum wage will cost jobs. If it's not worth paying someone $10 an hour to do something, the job will be eliminated -- or it simply won't be created. The minimum wage is the perfect Democratic issue. It will screw the very people it claims to help, while......

Words: 1113 - Pages: 5

Premium Essay

Minimum Wages

... higher the wages will be. On the other hand, the supply of labour market is highly competitive that every household is the supplier of labour (Wall, 1995). Free and pliable labour market is self-regulating; the price of wages alter automatically to bring the market to equilibrium (Abbott, 2013). The Bertrand competition assumes that even in a market of two supplier, both assumes the other supplier will remain prices unchanged (Dufwenberg, Gneezy, Goeree, Nagel, 2007). In order to gain maximum benefits from the market, one has the incentive to cut price which leads to a price war. Minimum wage has been introduced as a floor price to deviate from the equilibrium to prevent competition and to increases the total income of a worker. Hence, increases household income and decrease welfare and assistance cost for the government (Root, 2014). Besides that, the introduction of this legislation can increase human capital accumulation; a low demand for unskilled labour, induced by a minimum wage, may encourage workers to accumulate human capital (Cahuc, Michel, 1996). However, surveys have been taken and shown that the majority agreed minimum wage creates unemployment within young, unexperienced or unskilled labour (Summer, 1991). High unemployment rate among teenagers, might have keep teenagers in school and not to join the work force in an early age, but this will not help increase in the total of household income for families with dependents. When the minimum wage is set by......

Words: 736 - Pages: 3

Premium Essay

Minimum Wage

...the minimum wage, the time is now,” said Delegate Derek E. Davis, of Price George’s County. The increase in minimum wages has been a topic that has been on the rise with much controversy involved. President Obama wants state and lawmakers to increase the minimum wage from $7.25 to $10.10 per hour by 2018. Connecticut was the first state to pass the law, which will increase their minimum wage to $10.10 by January 1, 2017. Maryland is a year and half behind them, making the minimum wage $10.10 by July 1, 2018. The reason for Maryland’s delay is because they want to give businesses more time to adjust to the new and increasing price. The increases will be in steps. The first increase will be from now until July 2018, and will increase to $8 per hour on January 1, 2015. The second increase will be to $8.75 per hour in July 2016. The third increase will be to $9.25 in July 2017, and then the final increase to $10.10 in 2018. The graph below, from the congressional budget office website, shows the increases of wages over the time period. President Obama commended Martin O’Malley and other lawmakers for “leading by example” in hopes that congress will follow. However, some counties have been setting their minimum wages even higher than $10.10. Montgomery and Prince George’s counties have approved their minimum wage increase to $11.50 by 2017. However, businesses are going to be allowed to pay a lower training wage to workers under 20 years old. However, this increase in wages......

Words: 874 - Pages: 4

Premium Essay

Minimum Wages

...over time, leading the 2013 winner of the Nobel Prize in Economics to call it, “The most important problem that we are facing now” (Christofferson, 2013). A significant contributing factor to this is the stagnant minimum wage. Raising the minimum wage will not only decrease income inequality, but also raise millions out of poverty, spur consumer spending, and ultimately lead to a more efficient workplace and workforce. Therefore, America needs to adopt one of the currently proposed $10.00+ minimum wage policies being discussed in the political arena and ensure it is being used in a responsible way to fight these problems. The federal minimum wage has went without a change for nearly a decade twice, from 1981 to 1990 and 1997 to 2007. There have been many more multi-year gaps as well (Federal, n.d.) As a result, the minimum wage has not kept pace with inflation over the last 40 years. The purchasing power of the $7.25 minimum wage set in 2009 has already dropped by 5.8% by 2013 (DeSilver, 2013). Since 1968 the power of the minimum wage is down 23% after adjusting for inflation (Boushey, 2014). There is, however, another way of weighing the minimum wage instead of just against inflation. In 1968 the minimum wage was 53% of the average wage for hourly lower level employees, compared to 2013 when it had fallen to 36% as much (Boushey, 2014). This measurement shows that the people making the minimum wage today are not only falling behind their own historic......

Words: 1672 - Pages: 7

Premium Essay

Minimum Wage

...Minimum Wage: A Historical Perspective and its’ Future On June 18th, 2004, Senator Kerry announced his minimum wage plan, saying, “I’m running for President to build a stronger economy that lifts up families and expands opportunity for hardworking Americans. Today, there are workers, many of them women, struggling to get by on the minimum wage. That is wrong. We can do better. And together, we are going to change it. I want to build an America where working families can get ahead, where a family working fulltime does not have to raise their children in poverty.” (Burkhauser 1) Classical economists have proven for years that floors and ceilings on prices are bad for economies. So why do politicians, who call themselves progressive, continue to beat the drum of creating a living wage? The reason; to get more votes. A wage floor is strictly a political issue disguised as a social problem needed to help the poor. Raising the minimum wage has taken on a fever pitch in Congress this year, regardless of the fact that there is not a widely accepted empirical economic study suggesting it is the correct policy to assist the working poor. This paper consists of research conducted by the author from both the government activist and laissez-faire positions. In addition to the list of works cited at the end of this paper, several public policy institute web site were reviewed for pertinent material. These sites include: the Heritage......

Words: 3439 - Pages: 14

Premium Essay

Minimum Wage

...increase the minimum wage is the fact that living costs simply do not add up for minimum wage workers. That is to say, the current minimum wage simply does not match the current living wage for most of these Americans. A living wage is essentially the income necessary for a person to provide for themselves or their family. In a 2014 article for CUNY’s New Labor Forum, Peter Dreier recalled the introduction of the term “living wage” itself removed stigma attached to low-wage workers because it revealed the problem not as a situation of people who are in poverty due to bad decisions and lack of intelligence or motivation but rather as a situation where mothers, fathers and children’s can’t even make the means to meet their basic physiological needs despite working full-time, (Dreier, 2014). Economists calculate recommended living wages based on the cost of living in a given area and the housing size as well if it is a single parent household. According to the U.S. Department of Labor, the current minimum wage was determined by amendments passed by the Fair Labor Standards Act in 2007 that proposed it would be incrementally be raised to $7.25 per hour effective on July 24, 2009, (U.S. Department of Labor). This rate has not increased since then despite ever-increasing living costs and despite the fact that productivity has risen, where productivity is measured by how much output can be produced in an average hour of work. According to analyst Lawrence Mishel at the Economic......

Words: 655 - Pages: 3

Premium Essay

Minimum Wage

...arguments for and against raising the minimum wage are almost unavoidable in the labor market, with each side having individually strong points. Advocates say that anyone who works 40 hours a week or more deserves to earn a decent living wage and get out of poverty, while opponents argue that high wages cost jobs. Most of the arguments for increasing the minimum wage are more emotional pleas and theories with very little evidence for achieving the desired outcome. The truth is that raising the minimum wage does not lead people to get out of poverty, but what it does is make it more difficult for younger workers to find entry-level jobs to build their skills. By raising the minimum wage, experts argue that it will make it more difficult for younger workers entering the workforce to get a job. Employers will be hiring workers with more experience and skills, since they can attract these workers with higher wages. Therefore, raising the minimum wage may be causing more harm to a younger workforce looking to find their first job to gain relevant work experience. Our country needs to focus on the inconvenient truths about the real impact around raising the minimum wage. Some of these inconvenient truths are highlighted by the research that clearly shows how raising the minimum wage may cause more harm than good, and have significant consequences to the younger and entry-level workers vs. the emotional theories that state increasing the minimum wage will get more people out of......

Words: 2622 - Pages: 11

Premium Essay

Minimum Wage

...That is the national minimum wage set by the Fair Labor Standards Act in 2009. Projecting this to a 40-hour work week over 50 weeks it comes to a total of $14,500 a year. This is just above the U.S poverty level for a family of 2, but below the poverty level of $22,050 for a family of 4. Despite the fact that the minimum wage has been increased 3 times since 2007, it is almost $3.00 below what it was nearly forty years ago in purchasing power. It has not kept up with inflation. If it had, the minimum wage would be $10.74 per hour. In other words, the minimum wage is a far cry from being a living wage which is a wage that is high enough for fulltime workers to provide a decent life for themselves and their families. For the benefit of American citizens and the economy, the minimum wage must be increased! Those opposed to an increase in the minimum wage focus on a number of assumptions suggesting it would be a bad idea. Under close examination, all of their arguments fall apart.   One of the main arguments for not raising the minimum wage is that it is a job killer. The reasoning is the increase in salary decreases profits and results in cutbacks in hiring. However, a study at the University of California, Berkeley, has shown that raising the minimum wage does not have a negative effect on employment. An analysis of those states that independently increased the minimum wage “had job growth slightly above the national average.” Another study from the Economic Policy......

Words: 1051 - Pages: 5

Premium Essay

Minimum Wage

...Minimum wage legislation has been a topic of discussion for many years among economists. The first laws were introduced in Australia and New Zealand in order to protect minimum standard living for unskilled workers. At this point more than 90% of all countries have some kind of minimum wage legislation. However there are countries that do not set the minimum wage among those are: Germany, Finland, Iceland, Italy and other counties. Germany is the largest national economy in Europe. According to Central Intelligence Agency GDP of the country in 2011 is $2.94 trillion with real growth rate of 3.5%. Based on Trade Economic data unemployment rate of Germany in October 2011 was 6.5%. Despite the fact the Germany does not have a set minimum wage the average wages in western Germany is 27.9 euro per hour and 17.4 euro per our in Eastern German (source http://export.gov/germany based on data from 03/2011). The wages there are higher than average wages in European Union or worldwide. Of course there are laws of the German Government that regulate dismissal of workers/maternity leave/ vacation/health benefits; but not minimal wages. Minimum wage is set by the Government in order to protect unskilled workers. It provides employees with guaranteed minimum amount of income from their work to survive and pay their bills. It protects mostly adults from loosing their jobs to teenagers or foreigners that are ready to work for less than a minimum wage. However there are...

Words: 935 - Pages: 4

saison 9, épisode 2 - Enfance volée | NCIS Los Angeles S10E13 720p HDTV x264-AVS[eztv] mkv | HD 720P 2018 5,6 Break My Heart 1000 Times