Do Minimum Wage Laws Increase Unemployment Essay

The current 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 earn extra money and be able to make a better living, but what impact does an increase to the federal minimum wage have on the economy? Citizens of the US in 1912 were concerned about employers turning their jobs into sweatshops by†¦show more content†¦The value of money decreases when it’s more accessible, which means it will take more cash to buy the same amount of goods and services as before. This is most radically understood when studying the effects of the recent bou t of hyperinflation as experienced by Zimbabwe. The government of Zimbabwe ran large budget deficits and attempted to close the gap by printing a lot of their currency, the Zimbabwean Dollar. In January 2008, after years of experiencing hyperinflation due to this injection of money in their economy, the central bank of Zimbabwe began issuing notes worth millions of Zim Dollars. This rendered the lesser denominations of Zimbabwe’s currency worthless, and signs outside public restrooms began restricting people from using Zim Dollars instead of toilet paper (Mankiw). Unemployment is another concern when the minimum wage increases. Employers are mandated by federal law to pay their current and future employees the new minimum wage despite potentially no increases in their workers productivity. When a businesss base line is increased in this way they lose out on profits they could have been making. By profiting less than before, an employer may not be able to provide benefit s, have resources to train their employees appropriately, or employ more workers in the future. Despite these concerns, it is a fact that millions of workers earning the minimum wage will be helped out of poverty by thisShow MoreRelatedMinimum Wage And Its Effect On The Economy1015 Words   |  5 Pagesthe unemployment rate. The increasing of unemployment rate is caused by some reasons, and one of the problem that causes the high unemployment rate is the issue of minimum wage. Depending on the states in U.S., the price of minimum wage is different, but the low minimum wage may cause the economic condition worse. Minimum wage is the lowest wage that an employer is allowed to pay. This wage is regulated by the law, so all workers must follow this rule. According to the book, â€Å"Minimum Wages†, theRead MoreLink between Higher Minimum Wage and Higher Unemployment1179 Words   |  5 PagesIn theory when an increase in minimum wage increases the cost of low-wage workers firms should want to hire less workers, however in reality this basic theory might be wrong according to Plumer B. (2013) While some studies found a link between higher minimum wage and higher unemployment level many others such as a recent paper from U.C. Berkeley that exploited differences across state borders did not find a link between higher minimum wage and higher unemployment. A study by John Schmitt of theRead MoreThe Regulation Of Minimum Wage1055 Words   |  5 PagesRegulation of Minimum Wage In today’s society, people face to many serious issues which affect the society both in a positive and negative ways such as increasing the employment rate and increasing the unemployment rate. The increasing of the unemployment rate is caused by some reasons, and one of the problems that causes the high unemployment rate is the issue of the minimum wage. Depending on the states in the U.S., the price of minimum wage is different, but the low minimum wage may cause theRead MoreCongress As Part Of The Fair Labor Standards Act1084 Words   |  5 PagesStandards Act (FLSA) instituted minimum wage back in 1938. The first minimum wage was at $0.25 per hour and the last minimum wage increase occurred in 2007. Over the past 65 years the minimum wage has varied considerably in inflation-adjusted buying power. It has averaged $6.60 an hour in purchasing power in 2013 dollars, but it has ranged from a low of $3.09 an hour in late 1948 to a high of $8.67 an hour in 1968. Today’s minimum wage buys somewhat more than the minimum wage has historically, althoughRead MoreThe Effects of Raising the Minimum Wage on US Economy1507 Words   |  6 Pagessupport their family. Due to the fact that the prices of goods increase year and after year, the minimum wage has been increasing from less than a dollar to $7.25 now. The question that comes to everybody is that should we increase the minimum wage by too far. Does the minimum wage increase reduce the unemployment since now the current wage is high enough? Some people might think that we should increase the minimum wage in order to increase the labor supply. However, if we think deeply than this, thereRead MoreEssay on Pros and Cons of Minimum Wage701 Words   |  3 PagesCons of Minimum Wage The argument for minimum wage has remained remake consistent over the years. Some people are against minimum wage and the other think minimum wage can help you in a certain way. In the midst of the Great Depression, the Unites States federal government passed the Fair Labor Standards Act. The law has been amended almost every year to expand coverage of the wage floor and to increase the wage itself. Many of the fifty states have enacted their own minimum wage laws, some ofRead MoreImpacts Of A Minimum Wage Hike900 Words   |  4 Pagesto a Minimum Wage Hike in America There has been much controversy over the years on the impacts resulting from an imposed minimum wage and how it relates to the economy. It wasn’t until President Franklin D. Roosevelt signed a Bill enacting the Fair Labor Standards Act of 1938 that American’s gained the right to a minimum threshold by which their labor could be sold. Against much opposition President Roosevelt was for a law that banned oppressive child labor and set the minimum hourly wage at .25Read MoreRaising The Minimum Wage?1575 Words   |  7 PagesThe issue of raising the minimum wage from $7.25 to $15 an hour is a heavily debated topic. Both sources against or in favor of the minimum wage refer to a â€Å"growing gap† between low-income workers and high-income earners. Sources against the minimum wage believe raising it will increase this gap, whereas those in favor of the minimum wage believe it will decrease this gap. The arguments in favor of the minimum wage rely mostly on ethical beliefs, such as â€Å"pay should reflect hard work,† to advanceRead 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 economic theoryRead MoreMinimum Wage And The Wage Essay1728 Words   |  7 Pages Royer Political Science 120 7 November 2016 Increase Minimum Wage Introduction The United States’ minimum wage has been a concerning issue amongst the low wage earners because of the amount they earn is not enough for them to live on their own. Therefore causing the citizens who earn minimum wage to have an impossible time finding a place to stay and expenses for daily survival. Increasing the minimum wage will solve the issues that the minimum wage earners make, thus increasing the chances of