Minimum Wage Analysis

Words: 782
Pages: 4
Open Document
In this paper, I will show that minimum wage creates unemployment, raises prices, and reduces growth in the economy. Minimum wage is a long supported fiscal policy that destroys jobs and opportunities while trying to help the poor. Although in theory, minimum wage should increase the amount that low paid workers are making, this does not end up being the case for them as a group. Because the cost of labor rises, fewer jobs are being created and some jobs are being destroyed.
In the United States, a minimum wage has been federally mandated since 1938 with The Fair Labor Standards Act. This act set the minimum wage at 25 cents. Currently the minimum wage is $7.25 per hour nationally, but some states have specific minimum wages such as Washington …show more content…
These costs can be passed on to consumers in the form of price increases. Its effects can be seen often. Recently, Chipotle has increased its prices by as much as 14% in San Francisco and many other cities due to the rising labor cost from minimum wage. [Worstall, 2015] Some may argue that this is ok because as wages rise from a minimum wage increase, people can afford to spend more. However, this is incorrect because the increase in wages would only be noticeable in those working at or near the minimum wage level, which is a fairly small percentage of the total population. This means that minimum wage is simply raising the cost of living for everyone while only balancing it out for minimum wage workers. Another problem with this increase in prices and wages is that it moves jobs and production out of the US into other countries with more competitive pricing. Again, this hurts the economy …show more content…
This is problematic because they are not all in the same state of economic affairs and in some places workers have to be paid less to make a profit. One example of this is Puerto Rico. In Puerto Rico, the minimum wage is 77% of the median wage, and this means that labor is too expensive because the cheapest labor is only slightly cheaper than average. This makes it hard for Puerto Rico to compete with other islands in the Caribbean. This leads to higher prices for hotels and travel. Because things are more expensive, people choose to go to other islands that are cheaper. As they are generating less money, the hotels cannot expand as easily to create new
Show More

Related Documents: Minimum Wage Analysis

Raising The Minimum Wage Analysis

you think it is a good or bad idea to raise the minimum wage? ) In an article entitled, “Raising the Minimum Wage Is Still a Bad Idea.” Written by Ramesh Ponnuru, this author gives reasons as to why raising the minimum wage is a bad idea. Conversely, another article written by Andrew M. Cuomo called, “Fast-Food Workers Deserve a Raise.” Gives his reasons as to why raising the minimum wage is a good idea. Ponnuru believes that raising the minimum wage is a bad idea because he believes that it is not…

Words 1252 - Pages 6

Essay Project: Minimum Wage and Wage Calculator

The minimum wage in Texas should be raised to $9.25 because the cost of living is too high in Texas for anyone to live on $7.25. Raising the minimum wage will make living in Texas better. The average efficiency, one bedroom apartment in Dallas is $1000.00 per month. Minimum wage workers earn $1,160.00 a month, pretax if they work forty hours a week. Minimum wage workers making this amount leaves workers only $160.00 for all other expenses. Baylor says that the minimum wage “is a poverty wage …. A…

Words 311 - Pages 2

Minimum Wage Should Not Be Raised

Raising minimum wage such a good thing? The raise in minimum wage is a scary thing for many workers. People may think a raise in minimum wage is a good thing, but there are many bad things that can come from raising minimum wage. One reason why raising minimum wage could be detrimental to many workers on minimum wage is many of the people working for a company getting paid minimum wage would end up getting laid off because of the company's lack of money. Also another reason raising minimum wage would…

Words 954 - Pages 4

Minimum Wage Reduce Poverty

Many Americans want the minimum wage to be increased to keep pace with the cost of living. They believe that it aids to reduce poverty and stimulate the economy. Does the minimum wage really reduce poverty? Based on extensive research and analysis, it is evident that increasing the minimum wage would do little to get people out of poverty. Rather, it would reduce job opportunities, especially for those low skilled, entry-level workers. Minimum wage increase can severely affect small business…

Words 198 - Pages 1

Minimum Wage Case Study

to increase Federal minimum wage. As we look at our budget the funding provided to welfare programs such as Special Needs Assistance Program (SNAP); Department of Housing and Urban Development (HUD); the Supplemental Nutrition Program for Women, Infants, and Children (WIC); the Low Income Home Energy Assistance Program (LIHEAP); the Housing Choice Voucher (HCV) program each year has only increased. One of the major outliers is low income households. If the Federal minimum wage increased the overall…

Words 556 - Pages 3

Minimum Wage Case Study

In 1938, President Franklin D. Roosevelt established the minimum wage to protect workers in the labor force. Ever since that time, the minimum wage increased 22 times, under 12 different presidents. As the minimum wage has increased throughout the years, the movement has been gaining momentum; citizens and politicians continuously advocate for a higher minimum wage, or as they would As the minimum wage has increased throughout the years, the movement to continue rising its monetary value has been…

Words 750 - Pages 3

MALONE BRENT UNIT4 ASSIGNMENT Essay

with an appropriate analysis of the firm’s history, an appropriate analysis of the firm’s recent operating results, an appropriate analysis of the firm’s current operating results, an appropriate analysis of the firm’s economic forces that affect the firm the most and an appropriate analysis of the firm’s social forces that affect the firm the most. It will also contain an appropriate analysis of the firm’s political forces that affect the firm the most, a brief SWOT analysis for the firm, a discussion…

Words 1175 - Pages 5

Economics Assignment 1 Essay

Minimum Wage war has again heated up as President Obama in a State of the Union address reveals that a rise in minimum wage to $10.10 will be coming through on an executive order. Obama is seeking congress to pass the $10.10 minimum wage but is unlikely that they will as republicans and democrats differ greatly on this issue (Coy). Will Republicans pass the minimum wage or will they block it? With the Great Recession recovery limping along inequality appears to be generating wide spread attention…

Words 2084 - Pages 9

Toulmin Argument Analysis

The Toulmin method is an analysis that goes very in depth in an argument. It breaks the argument in parts and when read, it shows how effective the argument is all together. The passage goes over how the United States is facing a problem with illegal immigrants and the United States wants to get rid of them. The authors go over the possible way of overcoming that obstacle by providing clear cut facts and in depth analysis. This overall was a very effective argument due to the author using the Toulmin…

Words 852 - Pages 4

Argumentative Essay On Minimum Wage

Minimum-wage increases are viewed from many different perspectives. An average worker would may be happy to see their wages increases, while others might be upset that workers with less skill are closing the gap between both sets of wages, and employers will be upset having to pay their workers more. Despite all these opinions, there hasn’t been much consideration of whether or not the use of minimum wage has been useful in terms of fighting off poverty in the United States. When considering its…

Words 1717 - Pages 7