Essay on The Minimum Wage Should Be Increased - 1048 Words

Congress enacted the federal minimum wage in 1938, during the Great Depression. Congress had two goals; keeping workers away from poverty and boosting consumer spending for economic recovery. Today, there is a debate, whether we should increase the minimum wage again. Increasing the minimum wage is useful for several reasons. First, the current minimum wage has failed to keep up with inflation. Second, a higher income level reduces employee turnover and increases efficiency and ultimately, raising the minimum wage does not reduce employment. Even with high unemployment rates, the minimum wage is useful for the economy. Today the federal minimum wage is $7.25 per hour since July 24, 2009. It has failed to keep up with inflation. The†¦show more content†¦Economists explain this connection with efficiency wage theory. The theory implies that higher wages motivate workers to work harder and increase their incomes to enable them to eat well and become healthier. Increasing the minimum wage thus will increase productivity and demand for labor. A recent study by Andreas Georgiadis (2008) supported this view. In the study, Georgiadis states â€Å"estimation results suggest that higher wage costs were more than offset by lower monitoring costs, and thus the overall evidence implies that the national minimum wage may have operated as an Efficiency Wage.† These policies also encourage employers to increase training investments. Economists Daron Acemoglu and Jà ¶rn†Steffen Pischke showed in their study (1999) that compression in the structure of wages can cause firm-sponsored training. They concluded â€Å"When the wage structure is distorted away from the competitive benchmark and in favor of less skilled workers, firms may want to invest in the general skills of their employees† In their research, in 2001, they also state â€Å"In noncompetitive labor markets, minimum wages tend to increase training of affected workers because they induce firms to train their unskilled employees.† Opponents to minimum wage raise claim that the minimum wage costs jobs by pricing low-wage workers out of the labor market. However, when we review academic studies that examine the effects of minimum wage increases onShow MoreRelatedMinimum Wage Should Be Increased1057 Words   |  5 PagesRebecca Nevins Meredith Sides English 101 16 November 2015 Minimum Wage Should Be Increased Congress enacted the federal minimum wage in 1938, during the Great Depression. Congress had two goals; keeping workers away from poverty and boosting consumer spending for economic recovery. Today, there is a debate, whether we should increase the minimum wage again. Increasing the minimum wage is useful for several reasons. First, the current minimum wage has failed to keep up with inflation. Second, a higherRead MoreMinimum Wage Should Be Increased?1472 Words   |  6 Pagesdifficult if you are living on minimum wage. Of course it’s more difficult for some people than others depending on their situation and their living conditions. Americans and working class people who do come to America for a â€Å" better opportunity† and for the famous American dream struggle. Minimum wage should be increased because of the overqualified, educated, and experienced Americans who are relying on minimum wage jobs as a result of the struggling economy. Raising minimum wage will hel p employees sustainRead MoreShould Minimum Wage Be Increased?1691 Words   |  7 PagesShould Minimum Wage be Increased? Introduction The term, â€Å"minimum wage† refers to a lowest payment that an employer is bound to pay to its workers. Today minimum wage is made compulsory in more than ninety percent of nations including Canada where workers are demanding to increase minimum wages for a long time. Minimum wages are revised by governments in order to met growing needs of workers. There is a difference of opinion on the issue of increasing minimum wages among people of Canada. EmployersRead MoreThe Minimum Wage Should Be Increased1289 Words   |  6 PagesThe National Minimum Wage Should be increased to a Living Wage. Back in 1998 Labour s’ Tony Blair introduced the national minimum wage (NMW). It was created in aid of employers not valuing their workforce, often giving them very little wages. When it was first introduced the rate was set at  £3.60 and has slowly risen to  £6.70. However this is not enough to live on. It has been estimated that you need no less than  £7.85 an hour, rising to  £9.15 in London, to survive on. There is a clear differenceRead MoreThe Minimum Wage Should Be Increased976 Words   |  4 Pagesthe federal minimum wage. The post may have a picture of a soldier, a disheveled EMT in the back of an ambulance, or a waving American flag with overlying text stating something to the effect of ‘â€Å"Burger flippers† think they should be paid as much as these minimum wages workers? No way!’ If my experience on social media is any indicator, the most popular posts always contain â€Å"burger flipper† or â€Å"baconator.† Posts like the ones described above make moral judgements about the minimum wage with littleRead MoreMinimum Wage Should Not Be Increased1669 Words   |  7 PagesFederal minimum wage is a huge controversy around the world and especially in the United States today. It is the lowest wage that employers can legally pay their employees. The world’s first minimum wage law was passed in the year eighteen ninety-four in New Zealand. New Zealand’s minimum wage experiment caught the attention of other countries. It made them start considering the law for their own countries. The United States passed their federal minimum wage law in nineteen thirty-eight. The federalRead MoreThe Minimum Wage Should Be Increased Essay1758 Words   |  8 Pagesincrease the minimum wage in California from ten to fifteen dollars by the year 2022. The minimum wage will be increased by one dollar each year until 2022. This will give businesses enough time to meet state requirements to raise wages for em ployees. The bill was created to help people who are making less than minimum wage but it will disable California’s economy system and cause negative effects for people who are living on the current minimum wage system. The rise of the minimum wage will causeRead MoreShould The Minimum Wage Be Increased?1169 Words   |  5 Pageslarge scale over the State of Michigan’s plans to increase the minimum wage from seven dollars and fifty cents to ten dollars. Although increasing the minimum wage may seem beneficial to some, possibly stimulating the economy or increasing the standard of living for those who live below the poverty line, when looking at the economic issue through a larger lens and placing it into its context, one finds that by increasing the minimum wage, not only is the State of Michigan not addressing the most criticalRead MoreFederal Minimum Wage Should Be Increased911 Words   |  4 PagesThe question that ponders many people’s minds is whether the federal minimum wage should be increased or not. The current U.S. minimum wage is $7.50 and this wage has not increased since 2009. Families with minimum income wages are suffering due to the fact that they cannot provide everyday needs for their families. This is the reason why many people are rioting. They are frustrated with the government’s nonchalant attitude towards the hard situations in which they are living in. A final decisionRead MoreFederal Minimum Wage Should Be Increased1180 Words   |  5 Pagesto come to conclusions that the federal minimum wage is excessively low. The government can stand to help people gain more money, resulting in a less poverty-stricken country. The cost of living or gaining has increased significantly over the past twenty years, and the minimum wage, for most isn t enough for them to support themselves. There have been efforts to increase the federal minimum wage, but none has succeeded in getting approved. Minimum wages are too low for a human, to provide for