...Thaisa Ribeiro de Miranda 10/06/2014 EN 131E – Composition Essay 1 The World Goes Round Is it possible to live earning just a minimum wage? Is it fair to pay workers a low wage? Throughout the United States it is possible to see workers earning just a minimum wage. The working class that receives this low wage is bigger than people can imagine, such as waitresses, hotel receptionists, ambulance drivers, and others. It is right paying these workers low wages; therefore, the value of the minimum wage is wrong. The current minimum wage is not following the inflation in the country. As quality of life is directly linked to inflation, low-wage workers are subject to greater difficulties. The minimum wage is the lowest wage that employers may legally pay their employees for time and effort spent in producing goods and services. It is also the lowest value at which a person can sell their labor power. In the United States, the minimum wage is regulated by the government of each state; therefore, it cannot be less than the value stipulated by the federal government. According to the National Conference of State Legislatures, the current minimum wage provided by the federal government is $7.25. Although some states have established their own minimum wages, often higher than the stated by the federal government. Over the years, people seek to improve their skills in order to have a better understanding; therefore, it will increase their chances of getting a job with a better salary...
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...Abolish or Sustain? The Minimum Wage Debate Sarah Campbell May 8, 2013 Abstract In 1938 the Fair Labor Standards Act established a federal minimum wage. Minimum wage has continuously increased throughout the years due to interest rates and the value of a dollar. Since its introduction the minimum wage has risen from 25 cents an hour to 7.25 dollars per hour in 2009. In President Obama’s recent State of the Union Address he states, “Working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher.” He hopes to raise the minimum wage by 2014 to 9 dollars per hour. Following the President’s support on minimum wage increase Sen. Tom Harkin (Democrat-Iowa) and Rep. George Miller (Democrat-California) formalized a proposal known as S.460, the Fair Minimum Wage Act of 2013 to increase the minimum wage by 2015 to $10.10. This proposal includes increasing the minimum wage (in three incremental increases of $.95) and then indexing it to inflation (“as prices rise, so would the minimum wage” (Cooper, Hall 2013)). Also, the tipped minimum wage (the minimum wage paid to workers who earn a portion of their wages in tips) would be increased in $0.85 increments from its current value of $2.13 per hour, where it has languished since 1991, until it reaches 70 percent of the regular minimum wage (Cooper, Hall 2013). However, in the current tough economic times many people argue that an increased minimum wage will only hurt and that...
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...Minimum Wage Solutions Paper Labor Economics Minimum Wage Dilemmas There is a large push from the Democratic Party to increase the federal minimum wage. What effects could this have on American citizens? Minimum wage has been around for quite a while now, but what are its origins? What are the pros of having a minimum wage, what problems does it have potential to solve? What are the problems with having a minimum wage, and just how much do they affect the U.S. economy? What are potential alternative solutions to raising the federal minimum wage? Many different viewpoints and ideas will be discussed below, but it is difficult to fully grasp how far reaching the effects of minimum wage. The purpose for a baseline wage was set to help poverty stricken workers a fair wage for their cost of living. In June 25, 1938 President Franklin D. Roosevelt signed the “Fair Labor Standards Act of 1938,” which aimed to ban child labor, set maximum work weeks at 44 hours, and set minimum hourly wage at 25 cents. Roosevelt felt child labor, undercutting wages, and stretching out hours of the lowest paid workers during times of recession had a big effect on buying power even though this act affected one-fifth of the United States population at the time. Roosevelt realized a population without buying power is more than just an ethical problem but an economic one as well (U.S. Labor Department). The father of modern economics Adam Smith once stated, “But what improves the circumstances...
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...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...
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...Why should minimum wage stay the same? Minimum wage shouldn’t be risen because of the value of the dollar. Not only would the value of the dollar go down but, more people would be unemployed. “The rich will get richer while the poor get poorer” as said by William Henry Harrison on October 1st, 1840. With the minimum wage going up, prices will go up and the economy will collapse because of inflation. The economy will be unstable and homeless people will be receiving less money. In 2008 the economy collapsed, badly, we can refer to what happened then to what will happen now. People will work less and get more and think they are set for life when they are very rich. Off of basically doing nothing and getting 15 dollars an hour and having a 48...
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...#2 PHY 100 LAB My graph depicts the change in the U.S minimum wage over time. This graph has data starting at the implementation of the minimum wage act in 1938, up to more current data in 2014. The gray bar data represents the nominal value for an unadjusted dollar. The yellow bar accounts for the inflation of the dollar, turning it into a 2014 dollar. This depicts what the minimum wage change would look like in constant data value. Looking at the unadjusted graph, there is a bigger discrepancy between the start and end minimum wage. The gray graph has a slow increase of to minimum wage over time. The adjusted wage data depicts many more fluctuations in the data. The yellow bar depicts a more significant increases in the beginning particularly between 1950 to 1970. There are large decreases to the minimum wage around 1975, the end of 1980 and 2008. These decreases do not populate on the nominal value chart. The yellow data shows that the minimum wage has not been a constant an increase like the nominal data. The adjusted dollar is a more realistic and reliable interpretation to the change in the minimum wage. It's interesting that minimum wage has been "higher" in the past then by 2014's minimum wage value. Graph on Page 2 Citation: Taylor, S. L. (2014, February 1). A Basic Fact About The Minimum Wage. Retrieved February 20, 2016, from http://www.outsidethebeltway.com/a-basic-fact-about-the-minimum-wage/ Velocity Graph Descriptions 1 This graph is at a constant...
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...The minimum wage is often thought of as a guarantee of fairness in the employment market. As it is erroneously perceived, the minimum wage ensures that every person receives a living wage. However, the minimum wage neither guarantees that an individual be employed in the first place, nor does it guarantee that an employee will be offered enough hours of work in order to garner a so-called “living wage.” A raise in the minimum wage, without a raise in productivity for the given work, will result in companies resorting to drastic measures to secure profits. These measures include cutting down worker hours, implementing rigorous productivity standards, and most importantly, raising the cost of products and services. An increase in the minimum wage will result in an increased difficulty for low-skilled individuals seeking work, as they now have to compensate for an inequity in the value they provide and the wage they are guaranteed. In addition, those already past the threshold of the minimum wage will be forced to endure a rise in the cost of living, despite the fact that they did not receive a raise in their personal wage. Lastly, raising the minimum wage will degrade the idea of the free market, a system which allows prospective employees to exchange their work to an employer for an agreed upon wage, including wages that may not conform to the restraints of the minimum wage. Ultimately, the federal minimum wage should not be raised as it will encourage an increase in the unemployment...
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...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...
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...Explaining Unemployment: An Analysis on State Unemployment Rates Rachel Schlesselman Creighton University Introduction and Research Question Mississippi has 48,434 square miles of land. The state flower is the magnolia. Hawaii has only 6, 423 square miles of land and the yellow hibiscus as the state flower. These states are very different in many aspects; their populations, products, and geography are all very different. States are very unique and while national averages can give a general understanding of these separate entities, how are we to be sure it is an accurate account. The national average for unemployment in August of 2006 was at 4.7 percent. This does not adequately represent the unemployment rates for Mississippi or Hawaii. Mississippi had the highest unemployment rate of all states at 7.1 percent. Hawaii on the other hand, had the lowest at 2.8 percent. If the national average does not accurately represent the unemployment rates of these states, is it not then important for us to look at those state rates and determine our own cause for the differences? It is because of this I ask the question, how do we explain the variation of unemployment rates among the individual states? It is important to clarify exactly what the question is asking and the unit of analysis that is going to be tested. According to the Bureau of Labor, unemployment is defined as “persons who did not work or have a job during the reference period, were actively looking for work during the...
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...obesity, and the minimum wage Chad Cotti a, Nathan Tefft b,* a b Department of Economics, University of Wisconsin Oshkosh, Oshkosh, WI 54901, USA Department of Economics, Bates College, Lewiston, ME 04240, USA A R T I C L E I N F O A B S T R A C T Article history: Received 1 August 2011 Received in revised form 22 March 2012 Accepted 9 April 2012 Available online 15 April 2012 Recent proposals argue that a fast food tax may be an effective policy lever for reducing population weight. Although there is growing evidence for a negative association between fast food prices and weight among adolescents, less is known about adults. That any measured relationship to date is causal is unclear because there has been no attempt to separate variation in prices on the demand side from that on the supply side. We argue that the minimum wage is an exogenous source of variation in fast food prices, conditional on income and employment. In two-stage least-squares analyses, we find little evidence that fast food price changes affect adult BMI or obesity prevalence. Results are robust to including controls for area and time fixed effects, area time trends, demographic characteristics, substitute prices, numbers of establishments and employment in related industries, and other potentially related factors. ß 2012 Elsevier B.V. All rights reserved. JEL classification: I18 J38 H20 Keywords: Fast food prices Obesity Body mass index Minimum wage 1. Introduction ...
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...INSTITUTIONS AND WAGE INEQUALITY WINFRIED KOENIGER, MARCO LEONARDI, and LUCA NUNZIATA* The authors investigate how labor market institutions such as unemployment insurance, unions, firing regulations, and minimum wages have affected the evolution of wage inequality among male workers. Results of estimations using data on institutions in eleven OECD countries indicate that changes in labor market institutions can account for much of the change in wage inequality between 1973 and 1998. Factors found to have been negatively associated with male wage inequality are union density, the strictness of employment protection law, unemployment benefit duration, unemployment benefit generosity, and the size of the minimum wage. Over the 26-year period, institutional changes were associated with a 23% reduction in male wage inequality in France, where minimum wages increased and employment protection became stricter, but with an increase of up to 11% in the United States and United Kingdom, where unions became less powerful and (in the United States) minimum wages fell. W age inequality is substantially lower in continental European countries than in the United States and United Kingdom, and its evolution over time has differed greatly across countries. The same holds true for the skill (or education) wage premium. Changes in the supply of and demand for skills are unlikely to fully account for these marked differences (Acemoglu 2003). A substantial amount of research on wage inequality has...
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...About Work Values The 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...
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...Impact of increasing minimum wage on the economy Earlier in 2014, Deval Patrick, the governor of Massachusetts signed a legislation which stated that the minimum wage in Massachusetts would increase from the current $8 per hour to $11 per hour over the next 3 years. To many people, an increase in the minimum wage may sound beneficial as many positive connotations such as reducing poverty are commonly associated with an increased minimum wage. However this isn’t the case from an economic perspective. From an economics perspective, an increase in the minimum wage can have both positive and negative long and short run effects on the minimum wage workers, and the economy as a whole. One of the risks associated with increasing the minimum wage is that the minimum wage will be raised over the equilibrium price level in the labor market. In the economic model below, we can see that the labor market has set a minimum wage, or the price floor (a legal minimum price at which a good can be sold) at a price that is above the equilibrium price. Because this price floor is above the equilibrium price level in the market, the price floor is considered to be binding. Because of this binding price floor, the quantity of labor supplied will exceed the quantity of labor demanded. As a result, a surplus of labor will be brought about from the binding price floor, which will then cause unemployment as there are more people who would like to work than there are jobs available. This will...
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...Max Edwards Increasing the Minimum Wage By reducing employment growth and/or eliminating jobs, economists have long understood that adoption of a higher minimum wage can harm the very poor who are intended to be helped. Nonetheless, a political drumbeat of proposals—including from the White House—now calls for an increase in the minimum wage from our current $7.25 per hour to levels as high as $15 per hour. These changes are coming after years of national debate about how the government needs to raise pay so families can earn a living wage. The first time the U.S. federal minimum wage was established during the Depression and was first instituted in 1938 as part of the Fair Labor Standards Act when it was 25 cents per hour, since then it has risen from to $7.25 per hour. Despite the increases, inflation has eroded its value. To make todays minimum wage return to the value it held in 1968 would require an increase to almost $10 per hour. President Obama initially proposed raising the minimum wage to $9 per hour in his February 2013 State of the Union address which in adjusted terms would put it back at its early 1980s level. The President later embraced a proposal in Congress to raise it to $10.This would boost the wages of an estimated 15 million people according to administration. Supporters of these efforts make it known that women in particular are likely to benefit significantly. But increasing the minimum wage may have other economic impacts beyond adding more...
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...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...
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