American workers will have a 1.75$ increase in their hourly wage by the end of 2015, as President Barack Obama recently called to raise the federal minimum wage from $7.25 an hour $9.00 an hour. This increase in the minimum wage of American citizen aims to help people with a low annual wage: cooks, employees of the janitorial industry and many others working these necessary menial occupations are set to benefit. The white house estimates that this measure will boost the wage of approximately 15 millions low-income workers.
Raising the minimum wage, according to the White House press, will have some positive effect for low-income families; however, many companies are opposed to raising the minimum wage. A higher wage will have a direct impact on the cost of business. Some economists argue that higher minimum wage will result in an increased unemployment percentage. Although minimum wage laws can fix hourly pay, they cannot guarantee jobs. Employers are not willing to pay a worker more than the value of the additional product that he produces. For example, if a worker produces 4$ worth of goods per hour and because of the minimum wage he has to be paid 5.15$. Since he cost more than what he produces it makes it hard for him to find a job.
At one point in the article, the President said that one of the best ways to get the economy going again is to put money in the pockets of people who work. (Lowrey)It is true that families with low income will earn more money: it is projected that a family that is earning $20,000 to $30,000 a year will see an additional $3,500 in their income. (Lowrey) This general positive outcome of increasing the minimum wage has led many law makers to wrongly assume that increasing the minimum wage is an...
How has the level of employment/unemployment and national minimumwage legislation impacted on the economy as a whole and how will this effect the economy in the years to come?
What is the current state of our economy? Well many economists think that this year the economy will slowdown. In the last ten years or so our ecomony has been driven by factors such as high consumer spending and the soaring property market, our economy has have already witnessed the housing market slowing down this in turn will have an effect on household spending.
As for our manufacturing industry this has reported its worst fall in output in more than 10 years, increasing fears over the health of the UK economy. Also Factory production it is reported fell by 4% in the year 2002, This is the largest annual slump since 1991, this is according to figures from the Office for National Statistics.
Britain's manufacturing industry is going through its worst recession since the early 1990s, however high consumer spending has so far protected the wider economy.
2004 has seen a rise in economic growth both in the UK and worldwide.
Britain has had what economists call full employment for quite some time the problem for the future is that this could soon change and we could end up like germany with 10.5 % of the population out of work. The reason that this could happen is that many jobs that exist today were created by the boom in the housing...
...Against Raising MinimumWage
People everywhere are voicing out that we need to increase minimumwage, again. They say that an increase will have a minor impact on jobs but there are no facts to back them up. The impact of raising minimumwage has been studied since the beginning, and has been concluded that raising minimumwage hurts the poor, and helps the rich. Raisingminimumwage takes away jobs; especially the low-skilled and young worker, keeps people on welfare, and also encourages high school students to drop out. When you look at the facts, is it really worth raising minimumwage? All credible research has come to the same conclusions, and these I will discuss with you.
Poverty will rise
When minimumwage is raised, businesses have to raise the price on whatever products or services they offer, to offset the loss of profits from having to pay the employees more money. With products more expensive, consumers will not be able to afford to buy as much as they normally would, and businesses will start to go under; causing a huge loss of jobs. Small businesses will start going out of business first, and will eventually lead to bigger businesses. Take Visteon for example, in Connersville, Indiana. Visteon was one of the biggest employers around this area. 900 plus jobs...
The youth wage subsidy proposed by the national treasury has generated a heated debate in South Africa. This essay sets out to critically analyse this topic by exploring the merits and demerits of this proposal. This analysis will be conducted by firstly discussing the economic theory of the subsidy, and what it sets out to achieve. Furthermore the substantive credibility of whether the theory is applicable in the real world will then be discussed through various case studies, followed by an analysis of alternative proposals on the matter, and whether or not they could substitute the youth wage subsidy. Finally conclusions will be drawn as to whether or not the subsidy will help alleviate the unemployment problem in South Africa, and how it can be successfully implemented.
Unemployment in South Africa is rife, and according to Burns et al. (2010: 16), “this problem should be addressed by policies that improve the absorption of labour into full-time employment, preferably in the formal sector.” Furthermore, the study has identified three main sources of unemployment in South Africa, Namely; weak economic growth, changing structure of employment in South Africa, and youth unemployment (Burns et al., 2010: 17). Although all three sources of unemployment are equally important to analyse, special emphasis will be placed on youth unemployment.
The high rates of unemployment in South Africa are extremely concentrated...
In the United States MinimumWage is approaching record lows. Even with recent increases inflation is one of the main reasons that workers are being paid less for labor than they were back in the Seventies. There are about 3 million workers in the United States that worked full time year round last year and still fell below the National poverty level. If everyone earns exactly the same amount of money, then the income distribution would be perfectly equal. If no one earns any money except for one person, who earns all of the money, then the income distribution would be perfectly unequal. In a normal society Income Distribution is usually somewhere in the middle of perfectly equal or unequal. When a small number of people start receiving a large portion of the income in a society, the government tries to find ways to redistribute income. Governments try to stop the rich from getting richer, and the poor from getting poorer in order to achieve a good balance in income distribution. Minimumwage laws are a way that the federal and state governments balance income distribution.
MinimumWage is considered a price floor. Minimumwage laws determine the lowest price possible that any employer must pay for labor. In the traditional minimumwage model the quantity of supplied labor is...
November 5, 2013
Argument Rough Draft
Do minimumwage workers deserve a better paying wage? Perhaps a wage that they are believed to be able to live off of? Will raising the minimumwage help those it really intends to? With unemployment pushing 8% nationwide and costs rising, nationwide people are pushing for minimumwage to be increased. Theminimumwage was established by Franklin Roosevelt as part of the New Deal in the 1930’s. The Fair Labor Standards Act of 1938, as stated by Jonathan Grossman on dol.gov, is what ultimately established the minimumwage nationwide for all workers. The minimumwage guarantees workers a wage that is fair for all workers. It is the lowest possible amount that an employer can pay their workers.Though it is believed that the minimumwage will help the lower class, raising it will not actually help those it intends to, but in fact raise living costs and many other expenses when the minimumwage is raised.
The problem with minimumwage is that it is not kept up with yearly. As inflation across our country increases yearly, minimumwage stays the same. With unemployment at about 8%, many people are...
Controversy on MinimumWage
A minimumwage is an hourly wage rate that is set by law. The minimumwage was introduced during Roosevelt’s presidency in 1938. This was the time of The Great Depression where unemployment was at 19%. Today it is around 9%. As early as 2010 the minimumwage in the United States was $7.25 per hour. Now, only 3 years later, it is up to $7.85. Some feel as if minimumwage should be raised to decrease the amount of poverty in America whereas in reality, a higher minimumwage would only hinder low class Americans. Higher minimumwage would actually prove detrimental to the poor, the lower class will still fall below the poverty line, and raising the minimumwage will not target the desired demographic.
Contrary to popular belief a higher minimumwage would harm the poor. Researcher David Henderson explains that a higher minimum raise would force employers to be more particular when hiring employers. Many teenagers and young adults would be passed up for an employee who is older and can provide for better hours. The amount of people an employer is going to hire will decrease because of the amount they have to pay each employee. This is cutting people out of...
Raise the MinimumWage
There has been a lot of discussion regarding the increase of minimumwage across the nation. Currently, the wage is set at a low amount of $7.25 an hour. In today’s society it is almost impossible to live on only an income of $7.25 an hour especially for those who are raising a family. In President Obama’s 2013 State of the Union Address, the president proposed to raise theminimumwage to 9 dollars by the year 2015 (Luhby). A higher minimumwage would help people living in poverty by providing better means of financial stability, and it would also improve the chances of those people trying to escape poverty stricken living conditions. Another bonus to increasing the minimumwage is that it could potentially help lift the economy back up out of recession. For example, if people have more money, they are more likely to spend more money, therefore creating an increase in revenue for the nation as a whole. An increase in the present minimumwage to $ 9.00 per hour will boost the economy, promote sufficient funds for the standard of living, and enhance equality among all United States citizens.
To fully understand the argument circulating around the minimumwage law, it is first essential to recognize the reasons it was established....
...“Increasing the minimumwage is a bad move economically, philosophically and politically.” This quote by Marc Freedman, a distinguished author and CEO of Encore Careers, perfectly exemplifies my view on minimumwage. As a minimumwage earner, I would enjoy and entertain the idea of a few extra dollars in my pocket that comes with a minimumwage increase. Despite my self-interest, I believe in the interest of Ontario and the general population, that a minimumwage increase has only negative implications. I believe a minimumwage freeze is necessary, the economy needs to catch up, to decrease minimumwage is very difficult for a government because they would never get elected.
In a time when Ontario is in a slow economic recovery and is in dire need of job creation, a minimumwage increase will only slow the recovery and reduce jobs. The government of Ontario would like the minimumwage to increase by 10% in 2012 and it has already increased by $2.50 in past 10 years. I believe this is more of a political tactic then an economic aid. The majority of minimumwage earners are young people, immigrants/refugees and elderly people. These groups of people are infamous non-voters; the provincial...