Minimun Wage Essay
Ryan Bass
3/31/13
Micro
Do Minimum Wage Laws Really Help?
Minimum wage laws were first implemented in the United States in the early 1900’s and since then, economists have all agreed that they play a large role in our economy. They were first implemented to put an end to the sweat shops in America, however things have changed dramatically since then. The minimum wage is an important topic to consider and understand because "minimum wage workers" account for 1.7 million Americans. In the past, when the minimum wage has been raised to high unemployment rates increased. When minimum wages are set too low, companies pay their minimum wage employees too little to support their families or even themselves. It’s important that policy-makers know how to set minimum wage at a level that companies can afford and people can survive on.
Supporters of the minimum wage are usually strongly against poverty, support welfare programs, and aren’t usually upper class such as business owners or business management. They claim that the minimum wage increases the standard of living for the lower classes (Filion). They also think that it motivates and encourages employees to work harder. Both of these claims sound like great reasons to keep raising the minimum wage, but there are some expected counter-effects that occur from an increase in minimum wage that is too high. When the minimum wage is increased, many employees receive higher pay; however, this means that companies must pay more salary to their workers. If the pay raise is too high, this results in job cuts so that the company can afford to pay these employees that they are now forced to pay more, so yes, the standard of living for some of the lower class does improve, but many of the lower class also loses jobs. Employees are also only motivated for a short time. “You end up with a smaller number of workers, and even those workers who keep their jobs are less happy, because they’re forced to work harder for less attractive
3/31/13
Micro
Do Minimum Wage Laws Really Help?
Minimum wage laws were first implemented in the United States in the early 1900’s and since then, economists have all agreed that they play a large role in our economy. They were first implemented to put an end to the sweat shops in America, however things have changed dramatically since then. The minimum wage is an important topic to consider and understand because "minimum wage workers" account for 1.7 million Americans. In the past, when the minimum wage has been raised to high unemployment rates increased. When minimum wages are set too low, companies pay their minimum wage employees too little to support their families or even themselves. It’s important that policy-makers know how to set minimum wage at a level that companies can afford and people can survive on.
Supporters of the minimum wage are usually strongly against poverty, support welfare programs, and aren’t usually upper class such as business owners or business management. They claim that the minimum wage increases the standard of living for the lower classes (Filion). They also think that it motivates and encourages employees to work harder. Both of these claims sound like great reasons to keep raising the minimum wage, but there are some expected counter-effects that occur from an increase in minimum wage that is too high. When the minimum wage is increased, many employees receive higher pay; however, this means that companies must pay more salary to their workers. If the pay raise is too high, this results in job cuts so that the company can afford to pay these employees that they are now forced to pay more, so yes, the standard of living for some of the lower class does improve, but many of the lower class also loses jobs. Employees are also only motivated for a short time. “You end up with a smaller number of workers, and even those workers who keep their jobs are less happy, because they’re forced to work harder for less attractive
Cited: Brown, Charles. “Minimum Wages: Are They Overrated?” Journal of Economic Perspectives Summer 1986: 133-146. Filion, Kai. "Minimum Wage Issue Guide." Economic Policy Institute. 21 July 2009. Web. 08 Dec. 2010. <http://www.epi.org/publications/entry/issue_guide_on_minimum_wage/>. Swinkles, Jeroen. "Minimum Wage Matters - Increasing the Minimum Wage May Not Help Low-wage Workers." Kellogg Insight. June 2010. Web. 08 Dec. 2010. <http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/minimum_wage_matters/>.