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The Value of Minimum Wage

In: Business and Management

Submitted By derick24
Words 578
Pages 3
16 September 2014
The Value of Minimum Wage
The first attempt to establishing minimum wage was during the Great depression. It failed, due to the Supreme Court striking it down in 1935. Three years later, President Franklin Roosevelt signed the Fair Labor Standards Act, as a result, a minimum hourly wage of 25 cent was inaugurate. Over a century later, Americans are still debating the merits of this fundamental portion of the New Deal. The question is, is it necessary for government to ensure that, low skills worker receive a decent paycheck, or would the economy and low wage earners be better off without government intervention. The logical response is latter, primarily because, the continuity of minimum wage would only raise the unemployment and diminish the employment for low skilled workers.
The first argument is, minimum wage will escalate the raise of unemployment rate. –Its basic economics. If the price of labor increase, the demand will plummet. According to James A. Dorn article, Obama Minimum wage hike: A case of zombie economics, “A fundamental law of economics-Law of demand-states that when price of anything increase, the quantity demand will decrease…in the case of labor, this means as the price of labor increase, the number of job will decrease” (Dorn). Dorn statement validates the assertion of unemployment rate escalating while, employment plummet. However, opponents such as President Obama, disregard the law of supply and demand by, proposing to increase the federal minimum wage. During his annual State of Union address, Obama stated, “No who works full-time should have to live in poverty…raise the federal minimum wage to $9. This single step would raise the income of millions of working families” (Obama). Paul Krugman disprove Obama’s assertion in his New York Times article Rubio and the Zombies by denoting Obama’s case “a Zombie idea…a...

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