government imposed a new federal minimum wage in 2007 on American Samoa and the Commonwealth of Northern Mariana Islands (CNMI). While this increase had good intentions—a reply to the islanders' wages being lower than that of their mainland counterparts—the results were shocking. As indicated by another report from the United States General Accountability Office (GAO), the 19 percent decrease in employment in the workforce that American Samoa has encountered since 2008 was in vast part the consequence of imposing minimum hourly wages across different industries. The islands’ essential industry is tuna fish canning, with major employers Chicken of the Sea (Seafood company) shutting and Starkist (Tuna company) reporting enormous layoffs. In 2008 the number of workers in the canneries was somewhat more than 19,000 yet has following tumbled to
Crazy Wage Mike Durant once said, “Making it more expensive to create new jobs is a perfect way to guarantee fewer of them.” The recent, “Raise the Wage” campaigns have sparked an interest in many low-wage workers, however those who support this initiative are unaware of the economic problems that will arise if this is successful. Several cities have already raised their minimum wages and some, like Seattle, are raising it as high as $15 per hour. Currently, supporters of this campaign argue that this raise should be implemented federally. However, doing so will have broad and negative financial implications. Ever since the Great Depression, the minimum wage has been in effect — in order to reduce poverty and solidify that employees are paid a reasonable sum.
Some businesses find it difficult to operate with less workers, so instead of reducing the number of workers, they are forced into bankruptcy. When this happens, the accumulated revenue falls which reduces the country 's GDP. As minimum wage laws push up the costs of hiring labour, businesses prefer moving their headquarters and operations to countries where minimum wage laws are less strict or don’t exist at all. This is also called outsourcing (Amadeo, 1). This shifting of businesses abroad further pushes up unemployment levels as lesser jobs are available.
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
In today’s world, there is a rising controversial question, should minimum wage be raised. There are several statistics defending each side of this issue. Some people, for example, that raising the minimum wage could benefit so many individuals provide for themselves and for their families. While on the opposing side people say that raising the minimum wage could potentially ruin small businesses. Today’s minimum wage is $7.25.
Which side will win, many states and politicians want the higher minimum wage. What will really happen if this becomes true will it make certain companies go out of business or will they adapt to cut jobs so we may be back at the starting point all over
All of these reasons contribute to the improvement of the economy. “The economy is in its worst crisis than it has been since the great depression” (“The”). Minimum wage has not been what it was made to be in the past years according to many sources ,and the effect that it is having on our modern economy is acceptable. If the minimum wage was to increase more than eight percent of louisiana's workers would be affected in a positive way. The numbers are the same in many other states as well.
In the year 1938 President Franklin Delano Roosevelt established the federal minimum wage of $0.25, an equivalent of $4.11 in modern dollar value. The general idea was an increase in wage would mean that employees started to earn a lot more money so much, that they were able to buy additional products and services. Business whose services and products are now being purchased earn money. These business now are able to hire more people, repeating the circle. Since 1983 congress has raised the minimum wage 22 more times to encourage economic growth.
Why we Should Raise the Minimum Wage In Kevin A. Hassett's essay which appeared in American Enterprise Institutes online issue March 10, 2013 , '' Why We Shouldn't Raise the Minimum Wage'', he responds to announcement proclaimed by President Obama, in his 2009 State of the Union address, regarding the minimum wage. ''In the wealthiest nation on Earth... no one who works full-time should have to live in poverty.'' President Obama 2009 . Hassett believes that the President's resolution to raise the minimum wage would prove to be counter effective. He does not believe that it will solve the , present and worrying issue of poverty in the country.