GEN499 Week 5 Final

RUNNINGHEAD: INCREASE IN MINIMUM WAGES

Increase In Minimum Wages To Workers In The United States

Mary Arterberry

GEN499 General Education Capstone

Anthony Winters

February 28, 2017

Increase In Minimum Wages To Workers In The United States

Between 1938 and 2016, the minimum wage has remained unchanged at an average of $2.98 per hour. In the USA, the federal minimum wage is the wage per hour that the employees are supposed to be paid by the employers. Several states have their own minimum wage laws. Over the years, the politicians and activists have been pushing for increased and regulation of the minimum wages all over the country. The topic is hotly contested by the critics on both positive and negative sides of increasing the minimum wage. Reduced employment rates have been on occasions linked to the increase in minimum wages, but the idea also has improved the living standards of the workers in the state.

If it comes to the issue of increasing the minimum wage, the opponents of this idea argue that it will lead to loss of jobs. However, this argument has been proven otherwise by several pieces of evidence from the numerous states. According to the results from numerous studies in the recent years, the results have shown that on many occasions, very little difference in the employment for the workers that are in the affected areas within the states that have increased their minimum wages as compared to those that have not raised their minimum wages. “Several states, around 21 of them have followed the government’s leads in enacting the minimum wages” (Gillikin, 2017). The number of states is expected to increase in the coming years.

The federal minimum wage act that was established in the year 1938 by Fair Labor Standards Act was artificially set high with the aim of rendering the low-waged factory jobs within the South obsolete. “The amendments made later increased the Act’s scope to enable in not only covering the retail and other economy sectors but also help in mitigating the unintended repercussions to U.S. Virgin Islands, Puerto Rico and other territories” (Gillikin, 2017). By the year 2014, federal minimum wage is around $7.25 per hour, though there exists more pressure on the Congress to increase the minimum wage to over $10 per hour. According to the increase in minimum wage advocates, it is important to raise the minimum wage as it imperative in improving the wages, of a large number of women who are working.

The argument that the raising of the minimum wage will slow down the creation of jobs may or may not be correct, but calls for close examination. This argument may be true but obscures the more important points. “It is clear that lack of jobs is a hard psychological and economic condition, but the importance of the job is for the worker to earn money that is enough for his or her survival” (Gillikin, 2017). For a worker who has a family, the money earned should be enough for the family to make ends meet. Also, “those who are opposing the idea of increasing the minimum wage argue that the minimum wage is intended for the retires, teenagers and others who are looking for part-time jobs to add-on their non-wage income, but not for the full-time workers” (Mitchell, 2014). This is wrong since many of the family primary earners are working on minimum or low wage jobs. Also, for part-time workers and teenagers, it’s a pretty bad idea for them to work for minimum wages, especially when consideration of the time associated with traveling to the part-time and cost is done.

Some of the studies done earlier indicated that some businesses had been forced to cut jobs so as to pay workers more. The studies have also shown that the increase of minimum may lead to a reduction of employment by around 500,000 positions across the labor market. According to critics, an increase of minimum wages negatively affects businesses by hurting them, prices are raised, and they are at end counterproductive for the poor works since they could lead to unemployment. However, to some economic experts, an increase in minimum wage could ‘ripple’ the economy hence boosting the salaries of over 30 percent of workers. “Raising the minimum wage is something that is overdue” (Mitchell, 2014). By increasing the minimum wages, the economy is improved.

The minimum wages effects are mostly felt by the low and middle income earners. These are people who are considered to only earn what is enough only to cover their basic needs. These low and middle income earners have their diversities in terms of basic needs because of factors such as siblings and family sizes and therefore although they may earn same amount of minimum wage some may incur more expenses than others although classifying their needs as basic.

As much as there is advocating for increase in minimum wages, strict policies in doing so should be implemented. Sometimes some actions taken if not well thought before may be said as ‘shooting yourself on the foot’ such that sudden changes in these minimum wages may cause inconveniences in the other sectors of the economy.

Different states have different policies regarding the minimum wages. This usually depends on the variety resources availability in that state as well as the vast majority of work. Some states have more of blue collar jobs while others have more of white collar jobs. These different states cannot have the same policies for the minimum wages since their labor force has a different job description.

Therefore, minimum wages are determined by many different factors and if such factors are as well considered in fixing the desired minimum wages the overall economy improves and grows stronger.

References

Mitchell, L. (2014). The Importance of Raising the Minimum Wage. The Huffington Post. Retrieved 28 February 2017, from http://www.huffingtonpost.com/lincoln-mitchell/the-import-of-raising-the_b_5295707.html

National Minimum Wage and National Living Wage rates - GOV.UK. (2017). Gov.uk. Retrieved 28 February 2017, from https://www.gov.uk/national-minimum-wage-rates

Why is minimum wage important?. Reference. Retrieved 28 February 2017, from https://www.reference.com/world-view/minimum-wage-important-7c025095a0aaaff0

Gillikin, J. (2017). Problems With Minimum Wage. Smallbusiness.chron.com. Retrieved 18 February 2017, from http://smallbusiness.chron.com/problems-minimum-wage-2692.html

Neumark, D. (2014). Employment effects of minimum wages. IZA World Of Labor. doi:10.15185/izawol.6