what are the arguments for and against the minimum wage?
430290
Arguments against Minimum Wage Laws Excludes low cost competitors from labor markets, hampers firms in reducing wage costs during trade downturns (etc.), generates various industrial-economic inefficiencies as well as unemployment, poverty, and price rises. Hurts small business more than large business.
948589
While the federal minimum wage is $7.25, most states and many cities have higher minimum wages resulting in almost 90% of U.S. minimum wage workers earning more than $7.25. The effective nationwide minimum wage, the wage that the average minimum wage worker earns, is $11.80 as of May 2019.
254057
First, increasing the minimum wage is often seen as a solution to reduce poverty and a way to increase the standard of living, especially for people in low-paid work. However, as we have seen, there is evidence that suggests it increases the cost of living by raising prices, especially for food.
608430
Even modest rises in the national minimum wage make a big difference to disposable income and contributed to higher spending. Higher wages enable higher consumer spending and a rise in AD.
1235268
By boosting the income of low-wage workers who keep their jobs, a higher minimum wage raises their families' real income, lifting some of those families out of poverty. ... For those reasons, the net effect of a minimum-wage increase is to reduce average family income.
878326
Many believe that an increase in minimum wage would help reduce poverty. If a person works forty hours per week, which is full time, and makes the federal minimum wage of $7.25, then they earn $15,080 per year. ... Raising the minimum wage would make a huge difference to a lot of people.
1420927
However, the minimum wage is only one factor that affects growth and inflation. In the real world, the UK has seen above inflation increases in the minimum wage without any negative impact on inflation or unemployment – but only negligible impact on economic growth.
173826
The minimum wage does not provide a living wage for most American families. A typical family of four (two working adults, two children) needs to work nearly four full-time minimum-wage jobs (a 76-hour work week per working adult) to earn a living wage. ... State set their own minimum wages.
1308088
['The system should be fair both to the employer and the employee. ... ', 'The worker should be assured of a guaranteed minimum wage at satisfactory level irrespective of the work done by him. ... ', 'Workers should be paid according to their merits.']
470611
The potential downside is that a higher minimum wage may discourage firms from employing the low-wage, low-skill workers that minimum wages are intended to help. ... Research findings are not unanimous, but especially for the US, evidence suggests that minimum wages reduce the jobs available to low-skill workers.
1467568
A minimum wage is the lowest legal amount an employer can pay an employee. ... In the United States, minimum wage laws were first introduced in 1938. Federal law requires a minimum wage of at least $7.25. Most states also have their own legislation, although a minority do not.
865986
Raising the minimum wage has positive impacts, such as bringing people out of poverty and increasing income for individuals and families. However, increasing the minimum wage can also lead to increased unemployment, depending on the increase, as employers would seek automation as opposed to hiring workers.
1182243
If it is below the natural wage rate, then nothing changes. But if the minimum (say, $7.25 an hour) is above the natural wage (say, $6 per hour), it distorts the market. More people want jobs at $7.25 than at $6, but companies want to hire fewer employees. The result: more unemployment.
1171424
Ontario's recent minimum wage increase is controversial, partly because it's unclear what exactly a modern minimum wage is supposed to achieve. When the measure was introduced in Canada about a century ago, the purpose was to protect women and children from being exploited.
791970
Minimum wage increases can also create negative situations for employees. Wage increases can push the employee's annual income into a higher tax bracket, of imposing a higher marginal tax rate on the individual. Minimum wage employees usually have lower wealth than other individuals in the economic marketplace.
48237
['Pro 2: Unions promote higher wages and better benefits. ... ', 'Pro 3: Unions are economic trend setters. ... ', 'Pro 4: Political organizing is easier. ... ', 'Con 2: Labor unions discourage individuality. ... ', 'Con 3: Unions make it harder to promote and terminate workers. ... ', 'Con 4: Unions can drive up costs.']
512856
In this case, a minimum wage could lead to firms passing wage rises onto the consumers in the form of higher prices. This will cause SRAS to shift to the left and higher inflation. Also, if higher minimum wages leads to an increase in consumer spending, it could cause a degree of demand-pull inflation as well.