...Second, increasing minimum wage will help businesses and it will actually help the economy. Two out of three small business owners (67%) support increasing the federal minimum wage and adjusting it yearly to keep up with the cost of living. (U.S. Newswire) People with the lowest incomes are the ones most likely to spend money when their salary will increase. They will afford to buy necessities they could not afford before, which will boost sales at businesses. Those people with food stamps and those that depend on the government will not ask help to them anymore. People will have their own independence since they will be able to afford to pay for their own. Increase in wages also will increase the customer demand that businesses needed and...
Words: 287 - Pages: 2
...Washington State which already has the highest minimum wage in the country; as she notes "SeaTac, home to the Seattle-Tacoma International Airport went a big step further, raising its minimum wage to an unprecedented $15." However, as the name of the town points out, SeaTac's main industry is the International Airport. While the business community in this town may not be truly representative of the national business climate, the same monotonous arguments against a living wage are present. Consequently, the tired remarks from those against a living wage are listed and argued against by the author. They include the age-old claims of business owners, more specifically from those claiming to represent the small business owners. While the loudest voices speak of the...
Words: 521 - Pages: 3
...Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania The article aims to evaluate the impact of increased minimum wage from $4.25 to $5.05 per hour in 1992 on the employees working in fast-food restaurants in New Jersey and Pennsylvania. The author has shown two comparisons in this study. One is the comparison of employment growth rates at Stores in New Jersey and Pennsylvania before and after the rise of minimum wage. And second is change in the employment rate from stores which paid higher wages initially to the changes in lower wage stores. His study concluded that there is no indication that the increase in minimum wage reduces employment. Analogous to this case study, based on the basic economic concepts, rise in the wage rate per hour have two effects – substitution effect and the income effect. If substitution effect dominates the income effect, then rise in minimum wage increases the labor supply and thus the employment rate. But if income effect dominates, then rise in minimum wage reduces unemployment. We shall understand the reason behind why rising minimum wage did not show any impact. The study analysed the 410 fast –food restaurants in New Jersey and Pennsylvania post the increase of minimum wage and compared the changes in wages, employment and prices at stores before and after such increase. Some of the other significant features of this empirical study include: first, the idea to increase the minimum wage happened...
Words: 1123 - Pages: 5
...The authors of this paper are in search for how employers in a low-wage labor market respond to an increase in the minimum wage. Specifically the raise in the minimum wage of New Jersey (NJ) on April 1st 1992 from $4.25 to $5.05 per hour and how this effected the surrounding areas employment level. This question is of interest to students of economic because we would expect to see a case study like this follow the labor of demand theory, as wage increase, employment decreases. However this paper finding indicates that the rise of minimum wage does not reduce employment. Which for someone studying economic comes as a shock, and the opposite of the models we have learned in previous class. This paper is not alone in these findings because as mentioned in the paper its self earlier studies have come to the same conclusion. So as a student this gives us a real life example of the labor demand theory being disproven, at least for this case study. Both of the authors of this paper have credibility and useful backgrounds. Dr. David Card earned his Bachelor of Arts degree from Queen’s University in 1978 and his Ph.D. in Economics in 1983 from Princeton University. His main field of study is labor economics; having authored 4 books over 90 journal articles and book chapters, while currently teaching at the University of California Berkley. Dr. Alan B. Krueger received a Bachelor of Science degree from Cornell University in 1983, a Master’s of Arts in Economics from Harvard University...
Words: 1042 - Pages: 5
...Raising the minimums raises the maximums Most of our nation’s low-income jobs and positions are not paying like they used to. Is federal minimum wage at an all-time low? Are we not in the greatest country, where American’s who work harder live more wealthily and have more success? The first federal minimum wage legislation was created in 1938, where law stated that workers earned 25 cents an hour. Since then the federal minimum has been revised and increased twenty-two times. The federal minimum wage was ignored from the year 1981 to 1990, and again until in 2007 where wages were raised to $7.25 per hour. Eight years later, the minimum standard remains the same which is an issue for most American’s considered to be middle class today. Actually, today’s minimum wage is lower than any rate during the years between 1956 and 1985. Nearly a quarter of America’s working adults are laboring for wages that do not support families at the minimally acceptable level (Curry). A person working full-time at the federal minimum wage earns $290 in a week, around $15,080 for the year (Gillibrand). With an annual salary of $3000 less than the nation’s poverty level line, an average family of three will struggle to make ends meet. These low-income families will need government assistance, for basic living needs. At this rate of pay, even an average family who has two working/supporting parents will still have financial burdens. They will be considered a poor family, with house-hold income of...
Words: 2818 - Pages: 12
...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+ ages)...
Words: 1205 - Pages: 5
...Compensation, and Minimum a growing management issue. By: Kendra Wright MGMT 630-9022 Turnitin score : As we enter the second decade of the 21st century and examine the management issues facing today’s organizations one in particular sticks out, and probably has been seen on many media outlets over the past few months. Compensation, and minimum wage a many organizations are encountering especially the fast food industry. The McDonalds Corporation has been at the forefront of this heated minimum wage battle between workers, and management. We will go more depth with the issues surrounding this organization, after we first have an understanding of what exactly minimum wage is entails. The minimum wage policy was created in the late 1930s, the law mandates that hourly pay does not go below a fixed level, and that these regulations are being enforced. There are many debates surrounding the issue of minimum wage. You will find many who believe minimum wage increases the likely hood of unemployment, and is not doing anything to help those stuck in the low earning workforce situation. Countering that argument are those who believe minimum wages ward off or decrease people from falling into poverty and exploitation. (Wilkinson, T.M 2004) In my review of the case study “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New...
Words: 907 - Pages: 4
...How ‘fair’ are wage practices along the supply chain? Global assessment in 2010-111 Daniel Vaughan-Whitehead 2 SUMMARY Worrying global wage trends around the world as well as poor wage practices along the supply chain – both exacerbated by the economic crisis – have led to increasing concerns over wage issues. This paper is aimed at identifying how ‘fair’ would be wage practices along the supply chain. For this we first propose to define ‘Fair wages’ through a new approach, the ‘Fair wage approach’, aimed at providing CSR actors with a coherent set of fair wage dimensions and indicators. This new approach is then applied in a large-scale exercise carried out on wages in more than 100 suppliers in Asia and complemented by three case studies in China. This exercise carried out in 2010-11 provides first hand and most recent information on wage practices among suppliers. The results identify a number of wage problems along the supply chain, and also confirm the need to address wage issues using a broad spectrum of different ‘fair wage’ dimensions, including living wages, minimum wages, prevailing wages, social dialogue, the payment of working hours and the evolution of wages in accordance with prices, enterprise performance and changes in technology and human capital. Paper prepared for the Better Work conference, 26-28 October 2011, Washington DC. Data have been collected through the 2010 auditing process of the Fair Labor Association (FLA). I would like to thank Kenan Ercel, Patrick...
Words: 14477 - Pages: 58
...Professor Bajwa 13 November 2013 Against Raising Minimum Wage In my opinion, more people are hurt by a minimum wage increase than are helped by it. Increasing the minimum wage helps some low wage workers in the short run but is detrimental to the majority of society in the long run. An increase in the minimum wage helps some low wage workers in the short run. If a worker earned less than the new minimum wage, it is beneficial to them to get an increase in their hourly wage, as long as the prices of goods and services stays the same and the company they work for is not forced to downsize. In spite of a temporary benefit to one group of workers, an increase in the minimum wage is harmful to several other groups. Employers, some low wage employees, and society as a whole are hurt by the increase. Employers are harmed by an increase in the minimum wage. The increase causes a company’s cost of operation to go up. Higher input prices decrease a company’s profits. Because of the higher cost of labor, an employer cannot employ as many workers. This causes a decrease in the company’s productivity, which also decreases their profits. Small businesses especially have a difficult time accommodating increases in minimum wage because they do not have as large of a budget to work with. Some low wage workers lose their jobs as a result of an increase in minimum wage. The company they work for may decide to let some of their low wage employees go to offset the increase in the cost...
Words: 1906 - Pages: 8
...Application Paper Coy, Peter. “How Much Am I Worth? - The Case for a $10.10 Minimum Wage.” Bloomberg Businessweek. Feb 2014: 10-13. Print. The Cost-Of-Living in Hawaii and New York are among the highest. Yet, in both states the minimum wage is set at $7.25. In his January 2014 State of the Union address, President Obama requested to raise a new federal minimum wage of $10.10 an hour. This movement has progressed within the past couple of weeks since its publication in February 2014. In the following pages, I will attempt to update and fill in the gaps where the article has left off. How would you like a 40% increase in your payroll? I bet that sounds like a great idea! How about if you and your fellow coworker’s all received a 40% raise? Even better right? Now, what if that 40% increase went through with the entire nation? Although raising the minimum wage would not increase everyone’s wage, this is where the controversy starts. Set in 1938, the Fair Labor Standards Act, or FLSA, is the fundamental compensation law in the United States. It is the federal law that establishes a minimum wage and limits the number of hours that may be worked in a standard week. It defines two categories of employees, the exempt employees and the non-exempt employees. The exempt employees are not allowed over-time pay, and non-exempt employees who are allowed overtime. The non-exempt employees are highly effected through this issue of raising minimum wage. Non-exempt employees are given the benefit of...
Words: 4144 - Pages: 17
...Analysis of Case Study for International Business By Assistant Professor Asif Mahbub Karim MBA, CA(Inter.), KPMG, MCFC,MBA, B.Com. PhD Research Fellow, Malaysia Coordinator – BBA & MBA Program Stamford University Bangladesh Introduction Background of the Case Established in 1972. Company has $10 billion in annual revenue. It sells in 140 countries. It only Sub Contracts. Employs 550,000 all around. Mission Statement “ Just Do It “ Accusations !! Products are made in Sweatshops. Many are Child Worker. Work in hazardous condition. Less than Subsistence Wages. Nike have become symbol of Evils of Globalization. Global Exchange – A Human Right Organization targeted Nike for repeated critisicm. Accusations !! The condition at foreign factories was at stake. Subcontractors were not matching minimum local labor laws. Long working hours. Working environment very poor. Minimum Wage rate very low. Safety & Security compliances not followed. Case Against Nike In search of cheap labor Nike looks factories as such in target countries where minimum wage level is not set. Targeting literate , disciplined and desperate job seekers. Mostly young women are hired. Labors don’t share Nike’s huge profit. They work 6 days a week for only $40 a month - just 20 cents an hour. Attack on Nike’s Sub Contracting Some factories were employing 11 years old labors in Indonesia for their sneakers. Wage as low...
Words: 541 - Pages: 3
...The Devastating Effect of Raising the Minimum Wage Raising the Federal minimum wage does not reduce poverty. If legislators raise the price of low and unskilled labor, businesses would reduce the workforce. The very laborers that are pushing for raising the minimum wage are the ones that will suffer the most. An increase in the minimum wage would lead to job loss and may result in higher prices for consumers. Minimum wage increases may result in severe economic devastation. Recently in New York between ten and fifteen thousand laborers marched in an effort to persuade lawmakers to increase the minimum wage to fifteen dollars per hour. The majority of those marching were activist students and employees of fast food industries. If protesters are successful in securing a fifteen dollar per hour minimum wage up to seventy percent of them will lose their jobs. For the first time in history, if the fifteen dollar per hour wage is approved, a fully automated solution would be an economically viable solution for struggling companies like McDonalds. Several companies are nearing commercial launch of the automated burger process. “Roboburger,” an automated burger machine can produce 8,500 burgers a day while 25 employees can produce 320 per day in comparison. If the companies are only required to pay a minimum wage of eight dollars per hour and contract labor, which means no benefits, it would still be viable to hire those 25 employees. The automation over the next few years...
Words: 814 - Pages: 4
...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
... (History Of Minimum Wage) President Franklin D. Roosevelt characterized the Fair Labor Standards Act of 1938 (FLSA), as “the most far-reaching, far-sighted program for the benefit of workers ever adopted in this or any other country.” A law drafted by Senator Hugo Black of Alabama and signed into law in June 1938, the FLSA was designed to “put a ceiling over hours and a floor under wages” by establishing an eventual maximum 40 weekly work hours. Henderson, David R. "Raising the Minimum Wage Will Not Reduce Poverty." Poverty. Ed. Viqi Wagner. Detroit: Greenhaven Press, 2007. Opposing Viewpoints. Rpt. from "The Negative Effects of the Minimum...
Words: 917 - Pages: 4
...In the current United States of America, a high minimum wage has hurt people economically, which has been seen by poverty rates, unemployment rates, and the reduction of part-time jobs. In 2008, an economist from American University and Cornell University released their results to their study on the effects of a higher minimum wage. They reported that through 2003 to 2007, the increase in the minimum wage did not decrease poverty rates throughout the struggling urban areas of America. Simultaneously, a group of economist from Ohio State University released a study that the increase in minimum wage, but in fact increased poverty rates across America. Unlike poverty rates, there has been a significant and visible increase in unemployment rates...
Words: 1247 - Pages: 5
