Introduction The minimum wage is the lowest amount of compensation an employee must receive for performing labour. It is a price floor below which the market price may not fall and to be effective has to be set above the equilibrium price. Minimum wages are established by contracts or legislation by government. It is therefore illegal to pay an employee less than the minimum wage. The supporters of minimum wage say it increases the standard of living, reduce poverty, reduce inequality and boost morale while the opponents say the exact opposite.
In this case, workers and jobs that have a value inferior to the minimum wages are unhallowed to enter in the market legally. This graph displays the labor market with a minimum wage. The market with a price floor has shown an increase in the quantity traded from Qd to Qs . The effect of minimum wage is represented by the black area: Qd,Qs,Pe. The black area is what we can call a surplus, on the labor market, it is Unemployment.
The answer to that question however is multifaceted, but it starts with one base ideal: Raising minimum wage doesn’t do any of the good that one might expect it to. The first reason that an increase to the minimum wage would be the wrong decision, is because raising the minimum
This shifting of businesses abroad further pushes up unemployment levels as lesser jobs are available. Moreover, studies done on the impact of minimum wage laws clearly show that minimum wage laws lead to a reduction in the labour force participation rate (Brown, 139). The introduction of legislation to repeal minimum wage laws would also reduce poverty. It would motivate the younger generation entering into job markets to look for enriching jobs. An increment in the minimum wage is said to have a negative impact on all employees, and businesses.
Hence, it is apparent that if we want to increase minimum wage, we can do so. This is something that is a natural outcome of the economic growth that the United States is now enjoying. Clearly, there are going to be increases in revenue and profits throughout America. And if this is only restricted to a few, in top positions who get their salaries increased hundreds of times ahead of the ordinary worker who is doing a lot to keep a company going. In line with this, the small change in minimum wage is not helping and it is clearly not reflecting the fair and just distribution of money throughout the organization and teamwork is hurt by keeping the minimum wage low.
Not only will increasing the minimum wage make it pricier for businesses to hire young, inexperienced workers, but it is also not stated in the constitution to allow such a thing for the government to handle. Boosting the minimum wage will not alleviate poverty, and there are plenty of alternatives to decrease the poverty rate. Also, by leaving the amount the minimum wage should be to the government and no the people. America is losing its freedom and changing its economic system. By increasing minimum wage, America would be hurting its people, not helping them.
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.
That is the heart of the liberal perspective on increasing the minimum wage and paying employees more will not just help workers but business owners and the population at large. This is so for several reasons. First, paying workers a higher salary is going to increase the productivity of the workers. This increased productivity and improved customer service will generate more in revenue than the increase in wages. Secondly, the reduction
Some say that raising the minimum wage will lift people out of poverty and provide a higher standard of living for everyone. Others believe that doing so would damage the economy and result in the loss of jobs. Raising the minimum wage would be detrimental to the economy, because it would create many problems for businesses and the free market. Raising the minimum wage would have a negative impact on the quality
Rent control is when government limits the price landlords can charge for renting property. (Investopedia, n.d.). Ideally, this rent ceiling benefits both the tenants and property owners. However, as seen by much empirical research and the economic