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The Minimum Wage Should Not Be Abolished - Essay Example

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Instructor name Date Minimum Wage The minimum wage law was intended as a humanitarian act which would stimulate the economy as well. The rationale behind a minimum wage, intended for the least skilled and educated persons in the workforce, is to raise their earnings in order to offset the forces that drive the market down which would otherwise reduce their buying power…
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The Minimum Wage Should Not Be Abolished
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Download file to see previous pages This discussion examines the benefits of raising the minimum wage not only for those workers who would gain monetarily but to employers as well and ultimately, the economy as a whole. Currently, the minimum wage stands at $7.25 which was increased from $5.85 per hour in July of 2009. This modest increase put minimum wage earners near the poverty line, about $16,000 for a family of three (Poverty Guidelines, 2006). The minimum wage had not been raised for seven years previous, the longest time span since the law first went into effect in 1938. This decline in the real value of the minimum wage over that seven years translated into lower real wages for millions of workers and contributed to the income gap between poor working families and the middle class. Raising the minimum wage allows those who make minimum salaries to keep up with inflation. It also helps those that need it the most such as single mothers and minorities. In addition, it will cause a ‘ripple effect’ in that wages will also increase for those that make just above the minimum. In 1968, a full-time employee who earned the minimum wage made what would be “the equivalent of $15,431 today, 44 percent more than today’s full-time minimum wage worker” (Lee, 1999, p. 1016). ...
decreased by 20 percent since September 1997.  “The minimum wage still equals only 31 percent of the average wage for private sector, non-supervisory workers… the lowest share since at least the end of World War II” (Bernstein & Shapiro, 2006). Some of those who oppose the increase have suggested that the dominant wage earner of families does not fall into the minimum wage category, that it normally applies to teenage summer workers. This assertion is not at all the case. The Economic Report of the President evaluated the evidence in 1999 and found that that this argument was indeed untrue stating in its report, “most minimum wage workers are adults from lower income families, and their wages are a major source of their families’ earnings” (Council of Economic Advisors, 1999, p. 111). Opponents also argue that raising the minimum wage will hurt the economy but, unlike the effects tax-cuts for the wealthiest Americans have on the economy, when the poorest in society have extra income; they spend it on the necessities of life thus directly stimulating the local economy. Employers generally oppose increasing the minimum wage. Their claim is that they would be forced to lay-off employees to cover the extra costs. This claim, however, has been proven to be unfounded. On the front-end, employers may indeed pay more to their employees after a wage increase but, as evidence indicates, the increased costs to employers are usually compensated for by benefits. For example, employees who make a wage that allows their families to subsist, rather than not, are less likely to secure other employment which reduces the employer’s employee turnover rate thus reducing additional training and recruitment costs. It also results in a decrease in absenteeism as well as higher ...Download file to see next pagesRead More
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