The Minimum Wage Is Not The Best Policy Essay - 1213 Words

When the costs of labor increase, there is a deadweight loss of employment associated with this reduction in hiring (quantity demand), which reflected in the loss for employers (consumer) and job seekers (producers). In 48 years, from 1968 to 2016, the U.S GDP has rapidly, and steadily increased to 361.5 percent from 4.62 trillion dollars to 16.7 trillion dollars. Relating this statistic to the federal minimum wage, in 1968, the federal minimum wage is 1.60 dollars per hour, if the federal minimum wage should increase by GDP grown rate, it will be 5.79 per hour today. When adjusted by inflating rate, it should be 11.11 dollars per hour for the same purchasing power. Indexing the minimum wage to inflation is not the best policy to help the low-wage worker. For example, suppose the Congress in 1938, at the height of the Great Depression, when established the first federal minimum wage as part of the Fair Labor Standards Act (FLSA) authorized its indexing to inflation thereafter, just a s President Obama asked for in his final State of the Union address, the minimum wage of .25 dollars per hour in 1938 is worth 4.29 dollar in 2016, compared to the current federal minimum wage of 7.25 dollars per hour (BLS CPI Inflation Calculator. So what is a fair minimum wage after all and would it fix poverty with a new increase in minimum wage? Regardless of race, status, age, or where one may live, Americans are the people, not the statistics. We the American people are facing vital andShow MoreRelatedMiimum Wage and Power to the People1746 Words   |  7 PagesThree – Power to the people The third and final alternative minimum wage is to allow the local people in the community vote on a living wage. This alternative would put all the power in the hands of the people; allowing them to decide what is best for their neighborhoods. If the people are allowed to vote in such matters, they will be permitted to use their voice and at the very least express their concerns with the gaps in minimum wage and cost of living in their community. However, there are drawbacksRead More Min Wage Essay1461 Words   |  6 Pages Should Minimum wage be increased? Introduction For many decades now, there has been heated debates concerning minimum wages and increases in those wages. Most people have a tendency to assume that when the minimum wage is increased people will benefit. They do not stop to think of the consequences that come from minimum wage increases. The general population merely assumes that people should make an adequate amount of income and never stop to consider the consequences, nor do they stop to considerRead MoreFirstly, I Would Like To Talk About How This Topic Relates1092 Words   |  5 Pagesindividual. I feel that it is very crucial that the government sets these wage policies because obviously without them we would have firms and business who would treat employees wrongly. Although some may say the minimum wage restriction is too low I however feel that it is reasonable from a college student’s perspective. To me the reason I am in college is so I don’t have to live paycheck to paycheck by means of minimum wage. My p lan is to one day own my own company where I will be the one payingRead MoreThe Benefits Of Raising The Minimum Wage706 Words   |  3 Pages Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in generalRead MoreThe Economic Effects Of Minimum Wage1322 Words   |  6 PagesThe minimum wage was introduced for the first time in the 1890s in Australia and New Zealand and since then it has been a crucial component of public policy. It entered British market in 1909 and approximately 30% of U.S. states in the following two decades. After America’s introduction of the federal minimum wage law in the Fair Labour Standards Act in 1938, minimum wages have spread to a large number of industria lised countries as well as to some developing countries. Consequently, by the 1990sRead MoreThe Debate of Increasing Miniumum Wage713 Words   |  3 Pagesdecades, the minimum wage has been on going topic that the economists and the policy makers has been debating on. Indeed, It is still an open issue and the policy makers still debating on increasing it. The first Country that passed the minimum wage policy was New Zealand in 1984, and a lot country followed. President Roosevelt passed the first minimum wage in 1938, the minimum wage was 0.25 when the Roosevelt passed, and it has been increased as the living expense went up. The minimum wage is measuredRead MoreMinimum Wage And Its Effect On Employment839 Words   |  4 Pagesso, the minimum wage in the United States (U.S.) have been a topic of interest for many parties. On one side, the parties that oppose an increase in the minimum wage believe that an increase will spark an epidemic of high unemployment rates. On the other sid e, the parties are asking for an increase in the minimum wage for many other reasons, including help lower the poverty levels, afford health insurance and higher education among other needs. Throughout the U.S., the inequality of wages and compensationRead MoreThe Impact Of National Minimum Wage On South Africa s Income Inequality Essay1525 Words   |  7 PagesThe impact national minimum wage would have on South Africa’s income inequality should it be implemented. South Africa is still considered one of the countries which still consist of high income inequality. Economists argue that inequality is the most unavoidable part of the economic development and that it continues to increase in developing countries due to economic growth (Keeton, 2014). Inequality is a problem in countries such as South Africa, because it shifts the attention from bigger andRead MoreDoes the Minimum Wage Increase the Standard of Living for Low-Income People?1391 Words   |  6 PagesThe United States has maintained a minimum wage which was enacted since 1938. At the present time there is much political debate in regarding to increase the minimum wage to levels at the federal level, state, and local levels of government across this country. There are various theories regarding the minimum wage. Some believe it would circulate money into the economy faster which would negate and negative effects on employment, or even improve unemployment rates. Others point to the ec onomic theoryRead More Do Minimum Wage Laws Increase Unemployment? Essay1188 Words   |  5 Pagescurrent minimum wage, as set by federal law, is less than $15 per hour. Is this enough for any person to provide for themselves and their family? Laborers earning the minimum wage dont seem to think so and are wanting an increase in the required minimum wage so they will be paid more by their employers. The Bureau of Labor Statistics reported in 2015 that 3.6 million workers earned below or at the minimum wage (Minimum Wage Workers). At first it sounds wonderful for minimum wage workers to