Raising The Federal Minimum Wage - 799 Words

In the US, President Barack Obama urges Congress to raise the federal minimum wage to $10.10 an hour from $7.25. Although some Republicans oppose to this action, overwhelming majority of Americans see that is a good idea (The Guardian, 2014). Regarding to the issue of minimum wage, there have been lots of debates for a long time. Some economists such as Milton Friedman deeply believe that minimum wage kills jobs, but some like Alan Krueger and David Card think, to some extend, it actually increased employment (The Economist, 2012). To detailedly understand the topic of the minimum wage, both sides debate of the economists on the issue should be concerned. The first is Milton Friedman, claiming that the minimum wage cannot help the economy on the ground that it will increase unemployment and poverty. According to the classic pricing theory, the law of demand, if the price of the labor increases, the quantity demanded for it will decline. Because of the higher wage rate, the empl oyers will decrease the number of workers hired, or replace the low-paid and unskilled workers with the skilled, or even introduce the machinery to do the simple tasks instead of employing workers (Friedman, 1966). Also, small businesses with the tight profit margin may not survive under the higher cost of production. Raising the legal minimum wage rate reduces demand for unskilled workers by increasing the marginal cost of a worker, and induces additional search effort from unemployedShow MoreRelatedRaising The Federal Minimum Wage889 Words   |  4 Pages In my report, I will go into detail and show how raising the federal minimum wage would positively effect the economy. In doing so, I will be discussing how an increase in the federal minimum wage would make a vast improvement on the way many low income families live, and also how raising the federal minimum wage would boost the economy as it desperately needs. In raising the federal minimum wage, one might argue that it would cause a spike in the unemployment rate. The reasoning is that it wouldRead MoreRaising The Federal Minimum Wage1277 Words   |  6 PagesThe idea of raising the federal minimum wage that has developed nation wide attention, including protesting and arguments, has caused many discussions on why it could potentially help the economy grow and how it could result in the crash of the economy. Many people feel like raising the federal minimum wage is a must, while others think it will destroy the economy. There are many benefits that come with raising the federal minimum wage, but those benefits also come with many disadvantages. TheRead MoreRaising The Federal Minimum Wage1225 Words   |  5 Pages Study shows that wage increases do lower poverty, by 2.4% if wage at $8.00, consistent with other studies. (Washington Post/ Arin Dube) 1. Raising the federal minimum wage doesn’t cause substantial unemployment as most economists agree, including over 600 economists who wrote a letter to Congress urging a wage increase, and the Economic Policy Institute. A. Identify shortcomings of the opposition (fallacies they make, or weaknesses in the evidence they use) 1. Arin Dube’s study would be great,Read MoreRaising The Federal Minimum Wage969 Words   |  4 Pages At the heart of this plan was the idea that wages must be set and fair. â€Å"No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.†(Roosevelt) This plan became the Fair Labor Standards Act, which set the Federal Minimum wage. Minimum wage has increased, slowly, over the years, but has not kept up with its intended purpose. Raising the federal minimum wage to a fair living wage level will improve the lives of the working poorRead MoreThe Benefits of Raising the Federal Minimum Wage1334 Words   |  6 PagesPicture this: You are a single parent of two, you work 40 hours a week plus occasional overtime at a minimum wage paying job, you struggle to put food on the table to feed your family, and then you receive a call from the bank saying that your home is being foreclosed. This is the situatio n faced by thousands of Americans every year due to low income and wealth inequality. The federal minimum wage (FMW) as of April 2014 is $7.25, which is not enough to keep a family of two above the poverty line.Read MoreEconomic Outcomes Of Raising The Federal Minimum Wage1489 Words   |  6 Pagespercent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum. Together, these 3.0 million workers with wages at or below the federal minimum made up 3.9 percent of all hourly paid workers†(Ratio of Minimum Wage). The Federal minimum wage drives debate among people today, and with many wanting the federal government to raise the minimum wage to fifteen dollarsRead MoreMinimum Wage And Fight Income Equality On Numerous Occasions1470 Words   |  6 PagesPresident Obama has expressed his desire to raise the minimum wage and fight income equal ity on numerous occasions. On January 20, 2015, president Obama made the following statement in his State of the Union Address: Of course, nothing helps families make ends meet like higher wages†¦and to everyone in this Congress who still refuses to raise the minimum wage, I say this: if you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to giveRead MoreMinimum Wage Laws For The United States Essay1742 Words   |  7 PagesThe minimum wage is the mandated price floor paid on hourly or daily basis for the employees regulated by the government or the union. In â€Å"Federal Minimum Wage†, New Zealand and Australia enacted the first minimum wage law during the late 19th century to prevent employers’ exploitation of workers. In 1912, Massachusetts passed the first minimum wage legislation in the US that was enforced for women and children, and fifteen more states followed in the next eleven years. Howe ver, the Supreme CourtRead MoreU.s. Federal Minimum Wage Essay951 Words   |  4 PagesCongress passed the federal minimum wage law in 1938 as part of their Fair Labor Standards Act. Federal minimum wages were intended to ensure fair wages were paid to an alarming amount of women and youths employed and paid substandard wages. This also seems to be the case today, where countless Americans who work full time, cannot make ends meet by making minimum wage. Evidence shows that raising the minimum wage would drive consumer spending, thus producing faster macroeconomic growth. Wage stagnation isRead MoreU.s. Federal Minimum Wage Essay1162 Words   |  5 PagesThe current U.S. Federal Minimum Wage is $7.25 per hour. In just two years from 2013, the demanded from advocates for raising minimum wage rose from $9 to $15. However, raising the minimum wage is more complex than simply raising the number of federal standard of pay for employees. Relative control groups and other market activiti es play a part in the outcome of the minimum wage. For example, one instance of market activity was observers said that raising the minimum wage did not hurt individuals;