The Neoclassical theory states that the major cause of migration is different pay and access to jobs even though it looks at other factors contributing to the departure, the essential position is taken by individual higher wages benefit element. The Neoclassical theory involves the macroeconomic and microeconomic aspect. Macro focusing on structural factors and microeconomic focusing on an individual choice to migrate (Weiss, 2003). The macro theory is perhaps the most well-known approach explaining the causes of migration, it came from the theoretical model explaining internal labor migration in light of economic development (Corry 1996, Harris and Todaro 1970). According to the theory assumptions: 1.
This means as employees’ nominal wages increase with inflation their real wage (purchasing power of nominal wages) may remain constant. Since inflation reduces the incentive for households to save, it causes a shortage of savings for firms to borrow. Firms finance investment (the purchase of new capital goods) by borrowing money. Therefore, if there is not saving funds for investment will
There are a lot of potential benefits for an increase in minimum wage and on the surface it’s hard to see why you wouldn’t want to increase the wage. One of the clearest to see is that an increase to the minimum wage will also increase the spending for each household during the following years. So it works to help stimulate the economy in whatever area you increase the minimum wage. Along those same lines increasing the minimum wage will lead to a decrease in poverty as well. With the decrease in poverty you will also see a decrease in government spending on welfare items because the individuals receiving the higher wage in theory will be able to pay for these services/welfare items without assistance.
With the increase in living costs, people are demanding that they receive a higher minimum pay to cover these expenses. In his article “Millennial Thoughts: Minimum wage and my take,” Will Perkins offers his opinion on minimum wage. There are many sides to the debate of whether to increase or not to increase minimum wage. Perkins, in his article “Millennial Thoughts: Minimum wage and my take,” discusses the controversial issue of raising minimum wage. He emphasizes that people who work full-time should “earn a livable wage.” In addition, he feels that it should not matter where you work, as long as you are providing people with a productive service, your hourly pay should be increased to where you can live reasonably.
INTRODUCTION Economic growth is defined as the increased capacity of an economy to be able to produce goods and services in comparison from one period of time to another. This is figured by the genuine Gross Domestic Product (GDP) and development, and is measured by utilizing genuine terms such as “Balanced Inflation”. These terms help to remove any distorted views on the perceived outcome of inflation on the cost of merchandises produced. Likewise, Economic growth is related to the high expectations in a person’s standard of living. If the standards are high, it wouldn’t be beneficial for the economy as the working class individuals will face a lot of trouble.
While the general sweeping statement that everyone is a stakeholder may sound absurd, the minimum wage debate affects everyone. Society as a whole should care about the decisions being made regarding wages and how it will affect business and economy. Arguments: The Pros and Cons The Pros Pro #1: Positive Impact on Economy Argument The argument that raising minimum wage will stimulate the economy in a positive way is based on the thinking that more money in the pockets of minimum wage workers, as well as anyone who experiences increased wages due to employers increasing their overall salary ladder, will in turn spend that money on items and services that pour back into the businesses that need to increase wages. The idea is that not only will more people be able to afford essentials, but they will have additional disposable income to spend. Argument Analysis Pro #2: Increased Availability of Jobs Argument Going along with the positive economic growth is the idea that if minimum wage is increased, and these workers turn around and spend this additional income, sales will increase to the point that businesses will need to employ extra workers.
The main “common sense” argument is that by imposing minimum wages, one artificially raises the price of labour way from its “market-clearing” level and higher unemployment results-and the first to lose their jobs will be the least-skilled workers (city press;2014/11/25). The national minimum wage is a step towards an alternative growth path, in other words wages must be set to target productivity and efficiency. But it must be accompanied by other alternatives; such as industrial policy that sees that South Africa create jobs in sectors that can sustain moderately higher wages, and grow sectors that can benefit from, and contribute to, increased domestic demand (city press;2014/11/25). However national minimum wages promote equality, combat poverty and support economic development e.g. in Brazil during Lula’s tenure as president, the statutory minimum wage rose
Karl Marx has written on this issue,and has analyzed what causes these problems. Firstly, Karl Marx introduces the idea of a “wage slave” a person who primarily makes income from the work they do for others. The increase in factories also came with an increase in these “wage slaves”. The problem arose then, when it came to the corporations. In order to maximize profits the factory workers were paid minimally.
Minimum Wage was first enacted in 1938 during the Great Depression under Franklin Delano Roosevelt. It was initially set at $0.25 per hour, but today it is set at $7.25 an hour. In politics today, deciphering whether or not to increase the minimum wage is among one of the top controversial topics discussed. In this article, ProCon writes about the many different advantages as well as the disadvantages of increasing the minimum wage. Some of the arguments for raising the minimum wage that people tend to make are that it would increase economic activity and spur job growth, reduce poverty, and also would allow people to afford everyday essentials.
If we raise the minimum wage, not only are jobs going to be lost. But middle-class is not going to be so middle class any more. What really happens if we raise minimum wage, is it doesn’t affect the rich people, but it definitely affects the middle-class, considering that 's where a majority portion of the money is taken