Leagues marc morial and former mccain economic advisor douglas holtzeakin debate the pros and cons and raising the minimum wage. Wages cannot be so high that they reduce a companys ability to keep labor costs low during a recession. Those job losses among lowwage workers would be con centrated among. Weighing the pros and cons of a minimum wage hike proopinion. The obr office for budget responsibility estimate of 60,000 job losses is much too low given what is known. The benefits of raising the minimum wage 8 words 6 pages. Raising the minimum wage means minimum wage workers have more money to expend which means more money ripples throughout the economy as minimum wage employees are able to. In setting a minimum wage, the government has to find the sweet spot between protecting workers and giving businesses the flexibility they need to remain competitive. Why raising the minimum wage is a civil and human rights issue is an initiative of the leadership conference education fund.
As a matter of fact, the experience from the last decadeon both the state and federal levelsuggests that increases to the minimum wage have done little to reduce poverty. The assurance of a certain minimum income for everyone, or a sort of floor be. A disadvantage is that it only allows us to study the effect. Although alleviating poverty is a goal that is shared nationwide, raising the minimum wage may not be directly affecting the target group that it is intended for. What are the pros and cons of raising the minimum wage. Pdf role of minimum wages in rebalancing the economy. This is a scenario that rings true in the case of many immigrants. The main potential negative impact of raising the minimum wage is the loss of close to 500,000 jobs, which comes out to around 0.
What are some of the pros and cons of raising the minimum. Minimum wage a minimum wage is the lowest hourly wage that employers have to compensate the workers for their service. The pros and cons of raising the minimum wage smartasset. What are the pros and cons of having a maximum wage. Pros and cons of raising a minimum wage essay graduateway. The effects of a minimumwage increase on employment and. Other communities that have historically faced and con tinue to face higher. The debate over raising the federal minimum wage isnt as cutanddried an issue as it might appear.
The effects on employment and family income of increasing. The authors address the question of how a minimum wage increase affects the wages of lowwage workers relative to the wage the worker would. The negative effects of minimum wage laws cato institute. These supporters are generally democrats and employees who work at a minimum wage. Why minimum wage should be increased raising the minimum wage is a very important public policy issue. Pros and cons of raising the minimum wage cleverism. The job losses could occur as a result of higher wages placing a greater strain on companies, which could lead to cutting jobs, reducing employee hours, and other methods to save the company. Schedule 1 comes into effect on a date fixed by the president by proclamation in the gazette. Pdf minimum wages can be a powerful tool for supporting decent work. Some people are against minimum wage and the other think minimum wage can help you in a certain way.
Employment effects of minimum wages iza world of labor. Bureau of labor statistics page 1 characteristics of minimum wage workers, 2018 in 2018, 81. The potential benefits of higher minimum wages come. Britains national living wage economists debate pros. Information about the federal minimum wage is available. W hat is the optimal level of the minimum wage in the economy. What options for increasing the minimum wage did cbo examine. Increasing the minimum wage helps to raise millions of us working class citizens out of poverty 2. If its intended as a method of reducing income inequality, it seems to be missing the point. Benefits of minimumwage increases seem too good to be. Recent research has found that raising the minimum wage can lead to improvements in prenatal care and birthweight, which have longterm benefits for childrens health webby 2016. Staff assistance was provided by tyler lewis, patrick mcneil, jeff miller, lexer quamie, scott simpson, and corrine yu, who was an editor of the report.
It creates wealth distribution to each socioeconomic group. But the pros only outweigh the cons if the minimum wage isnt too high. Back to blog weighing the pros and cons of a minimum wage hike. Demographics of minimum wage earners in canada and the provinces 39. For this report, the congressional budget office cbo examined the effects on employment and family income of two options for increasing the federal minimum wage. The indiana minimum wage law also prohibits pay discrimination on the basis of sex. Of course, every states regulations vary, based on factors such as gross annual sales and number of employees. If the employees tips combined with the hourly wage do not equal the minimum wage, the employer must make up the difference. Analysis of the pros of raising the minimum wage the main intention of the minimum wage is to alleviate poverty, and help the lowskilled workers to earn a wage they can live off of. Here are the key pros and cons of raising the minimum wage to think about.
The argument for minimum wage has remained remake consistent over the years. A wage is a money paid by employer to an employee due to the work done. That increase would be implemented in six annual increments starting on january 1, 2020. In the midst of the great depression, the unites states federal government passed the. Raising the minimum wage creates a ripple effect throughout organizations with positive and negative effects. National minimum wage act 9 of 2018 english tshivenda. Studies focusing on the restaurant industry are arguably comparable to studies of teen employment, as the incidence of minimum wage workers is similar among both groups, and many of the teens earning the minimum wage are employed in this sector. The pros and cons of raising the minimum wage by isabel. The flsa requires employers to follow the state minimum wage law, which is usually set higher than the federal law. However, in some cases, this downside of the minimum wage can be minimized by applying a multiplewage structure, allowing a lower minimum wage if you fit into one of these groups. They believe that a minimum wage increase is needed to continually maintain its value. In 2009, thanks in large part to a higher minimum wage, brought the national teenage unemployment rate to record highs over 25%.
An increase seems to be on the horizon for many states who have not already adopted a higher minimum wage, which could result in both. A prosperous working class is the basis for a healthy economy, so obviously, people with more money to spend, will buy things with. What are the pros and cons of raising minimum wages. The remaining states have a higher minimum wage than the federal minimum wage.
Net neutrality should internet service providers be allowed to give priority to certain content. The effects of a minimum wage increase on employment and. Why does the minimum wage have no discernible effect on cepr. Photo id and voting should voters be required to show photo id in order to vote. The first federal minimum wage law was signed in 1938. Environmental education resources to commemorate earth days 50th anniversary. The pros and cons of minimum wage essay 1294 words cram. Each day, minimum wage workers across the country struggle to. It guarantees that an employee will not get paid any less than the stated minimum wage for their work effort.
Pros and cons of minimum wage the argument for minimum wage has remained remake consistent over the years. It gives employees the incentive to do the job that they hired on for. Raising the minimum wage will lead to higher unemployment opponents of the minimum wage argue that increases in the minimum wage will lead to higher unemployment. The living wage in 2020 would be 30 per cent higher than the current minimum wage. The pros and cons of minimum wage 1866 words bartleby. The pros and cons of raising the minimum wage when i work. The pros and cons of new restaurant minimum wage rules. The minimum wage is the salary floor or the lowest possible rate that employers can pay employees. Here are the pros and cons of a minimum wage to consider when looking at this compensation schedule. Pro 2 increasing the minimum wage would reduce poverty.
Since the last time the minimum wage was raised at the federal level, over 80% of the income gains in the u. Pros and cons supporters of the fair minimum wage act have insisted that raising the minimum wage will benefit a vast number of americans, especially those with families to support. He did so in response to a grave national crisis, the great depression, and a growing concern for unfair labor. Benefits of raising the minimum wage essay 614 words. Increases in the minimum wage in the competitive market on employers and employees. Minimum wage as a public policy instrument pros and cons presents arguments in support of the need to introduceincrease the minimum wage in the countries at the periphery of the european union including romania proposes an optimum levelevolution of the minimum wage in romania, beyond. Ram garikipati pros and cons of koreas minimum wage law. It increases unemployment experts see the rise in unemployment among unskilled and inexperienced workers.
A raise in minimum wage can be spent by the consumers and this will then ripple throughout the entire economy once the whole budgets for the salary will be increased under gradual raise in the scenario of minimum wage. Benefits of minimumwage increases seem too good to be true, but theyre not. Increasing the minimum wage will also boost the living standard, particularly of. There are many pros and cons to having a minimum wage in the united states. In the midst of the great depression, the unites states federal government passed the fair labor standards act. The minimum wage is way behind the times and setup too low. The potential benefits of minimum wage policy in terms of higher earnings for low paid workers. The employment effect of the minimum wage is one of the most studied topics in all of economics. For many american workers, minimumwage employment was a temporary, teenage condition, as we bussed tables or answered phones or cleaned rooms for tiny paychecks before moving on to more financially rewarding work. Just as a higher minimum wage increases productivity and boosts gdp, it also reduces costs for the taxpayer. Pdf minimum wage is one of the most studied topics in economics. Raising the minimum wage is a responsible policy that is supported by research and demanded by the american public. Experts believe that some businesses are just not willing to pay that much to workers with modest skills. Our 55th website explores the pros and cons in the debate over increasing the minimum wage.1303 458 1406 57 84 811 851 1273 488 943 1414 1279 940 308 716 6 1172 1083 147 1167 1461 670 1260 1017 449 1383 1282 949 291 1068 1216 1376 438 304