22 November 2011
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Minimum wage has been a continuing matter since its first establishment, and it is something everyone faces. Though, the recurring problem being brought up again and again is the issue of being underpaid, and is the set minimum wage fair? And will raising minimum wage be more beneficial or harmful in the long run? Through its history can society better understand and find a solution to this problem. Minimum wage was not instituted in the United States until the 1920s, and the idea of wages being determined by the hour was introduced in the 1930s. The Fair Labor Standards Act was born and passed through the Supreme Court in 1938, as well as the Wage and Hour Division. Raising minimum wage has promoted fairness in the work area, and has helped workers earn money for themselves and their families. Through these fairness and equality had been brought about, though its problems have risen throughout after its establishment, questioning its fairness and equality. With the unemployment rate so high, this matter needs to be looked into, as it could potentially save jobs.
While many support the idea of raising minimum wage, those opposing the idea claim that raising the minimum is rather detrimental than beneficial to workers and companies, as there is a higher risk of one losing their jobs and items becoming more expensive. It is seen by that raising minimum wage, it costs more to keep an employee, and when a company cannot afford to keep that employee any longer, they lay them off. Director Michael Hicks of Ball State University's Center for Business and Economic Research (CBER), illustrates this by providing a study in which it was found that between the ten year span of 1999 to 2009, the minimum wage increase to $7.25 affected some businesses, whom had to “scale back on filling vacant positions or eliminate jobs altogether” (Hicks). Additionally, The Reason Foundation points out that “economists generally agree that increases in the minimum wage cause unemployment even when the economy is prospering…” (Reason Foundation). These take a look how while the United States is fruitful on the outside, but what goes on the inside to fulfill that prosperity, is costing the citizens and their employers. James Sherk, a Senior Policy Analyst at the Heritage Foundation, claims that “…only workers who benefit from a higher minimum wage are those who actually earn that higher wage” (55). Raising the minimum wage threatens to reduce employee’s working hours as well as job opportunities. Those in poverty will not gain as much, and in raising minimum wage for those who poor and not working, is not beneficial and does not help anyone. It also claimed that with a particular percentage interval increase of “10 percent” in minimum wage, it affects employment by reducing it to “2 percent” (57). These claims demonstrate the effect of raising minimum wage, as it costly to keep employees, creates a decrease in the employment rate, and does not help those in poverty
In a rebuttal against the opposition, there has been much evidence to support that raising minimum wage is not necessarily beneficial, but rather there is not a real significant effect on employment. Robert Pollin, Mark Brenner, and Jeanette Wicks-Lim, authors of A Measure of Fairness wrote a chapter, entitled “Employment Effets of Higher Minimum Wages”, in which looked at the statistics, empirical explanations, and cause of raising minimum wage, and its effect on employees and companies between the years 2001-2005. In previous chapters, they explored various cities’ minimum and living wage stats, and found that in those scenarios, raising the minimum wage actually helped the businesses where they were able to “absorb the increased costs resulting from the higher minimum wage, primarily through a combination of raising prices and improving productivity” (216). Furthermore, they found that in the...
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