Minimum Wage Problem

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The general point of contention is whether or not the minimum wage should be increased. The proponents argue that increasing the minimum wage would not result in job losses because rising prices and redistributed earnings mitigate job losses. It also argues that increased pay would result in higher salaries even though working hours were reduced. Nonetheless, it assists low-wage employees in meeting the financial needs of their families. The dissenting side, on the other hand, claims that increasing the minimum wage would result in job losses and fewer employment of less skilled workers. He further claims that the payroll tax credit is sufficient for employers and that there is no requirement for a pay increase.

2. Increase in average wages = (10.72-10.04)/10.04) x100=3.2%

Increase in inflation = ((241.428– 199.8)/ 199.8) x 100 = 20.8%

The average wage has not kept up with inflation. The increase in inflation rate has been higher than increase in average wage (20.8%>3.2%)

3. The increase in average wage from March 2006 to October 2016 was 3.2%

4. The increase in inflation from March 2006 to October 2016 was 20.8%

5. Employers win because wages would not take much of the revenues obtained from high prices charged on produces.

5. Employees win because the higher wages neutralizes the effect of rising in inflation

6. Mark Adams argues that wage increase is likely to make it harder for the poor to get jobs. Rather than employ a less experienced workforce, business will likely remove the position or recruit others who are more experienced (Adams, 2011). Joseph Sabia of State University and Robert Nielsen of the University of Georgia argues that raising minimum wage does not improve the lives of low-income American families because the majority of these families do not belong to low wage bracket (Sabia &Nielsen, 2011). They propose income tax credit as an effective way of increasing employee’s earnings. John and Bishop, on the other hand, argue that raising the minimum wage to help poor American meet their needs.

7. Mark Adams relies on information from economist such as Diana Thomas support his argument. Joseph and Robert, on the other hand, used data from Census Bureau’s Survey of Income and Program to support their arguments. John and Bishop use data from the impact of wages such as an increase in wages set by Obama regime. Adams research is less reliable because he does not provide dependable sources apart from citing economist that may not have adequate experience in labor economics (John, 2010). Joseph and Robert's assertion is reliable because they use tangible sources of data such as Census Bureau’s Survey

8. A support the view that minimum wage should not be raised. An increase in wage make it expensive for firms to continue to produce optimally and still make a profit and so are likely to lay off workers. Firms may also decide to raise the job qualification making it harder for inexperienced to get a job. Nevertheless, employees deserve better earnings, and that can be achieved using other strategies. I also agree that other approaches such as income tax credit can have significant benefits compared to low raising wages.

References

John, P. (2010, March). What’s Best At Reducing Poverty? An Examination of the Effectiveness of the 2007 Minimum Wage Increase. Retrieved from https://www.epionline.org/studies/r124/

Sabia, J. &Nielsen R. (2011, January). Can Raising the Minimum Wage Reduce Poverty and Hardship? Retrieved from https://www.epionline.org/studies/can-raising-the-minimum-wage-reduce-poverty-and-hardship/

Adams, M. (2011, March 11). Raising the Minimum Wage Hurts the Poor. Retrieved from https://www.usnews.com/opinion/blogs/economic-intelligence/2013/03/11/raising-the-minimum-wage-wont-help-the-poor

November 23, 2022
Category:

Government Economics

Subcategory:

Economy Work Finance

Subject area:

Minimum Wage Job Budgeting

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3

Number of words

572

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