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Arguments Against Minimum Wage

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In this essay I will describe the arguments against minimum wage. As an economic advisor representing the Irish small business association, I will talk about my idea of an economic policy document preventing the introduction of a wage floor. Price floor is a minimum price allowed by law. It is a price below which, it is illegal to buy or sell. It is not always as good for the economy, as we think it is, because it creates surpluses, wasteful increases in quality, lost gains from trade and misallocation of resources. Minimum wage is one of the examples of a price floor. It is the lowest wage an employer may pay an employee and it is determined by law or contract. Increasing the minimum wage might seem like a great idea. However, it comes with many disadvantages. The …show more content…

Increasing the minimum wage would rise economic activity and spur job growth. It could also reduce government spending and lessen income, race and gender inequality. Despite the good intentions, it is ineffective and minimum wage is a uncertain policy that should be questionable for anyone concerned with the troubles of the poor. Minimum wage does not help to solve the poverty problem. If labor market has no restrictions, the wage would adjust so that anyone willing to work could find a job. Small businesses would not be the ones that are most hurt and would not be forced to close down. Companies would not have to lay off employees and decrease hiring levels. Higher wage floor also disrupts economic system and causes a lot more of side effects that are very damaging to the market. I think every country should try balance the minimum wage levels to help to stimulate economic growth and keep all the citizens happy, including the poorest and most unskilled and create many job opportunities for them. There are much better alternatives to help poor families, young adults. Minimum wage is a dishonest approach that hides the true cost of the

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896 Words | 4 Pages

A minimum wage is considered as the lowest compensation that employers may legally pay to employees. Similarly, employees may not sell their labor below the price floor. A price floor is a legal minimum in which the government does not facilitate the price of a good or service to decrease below the floor. The minimum wage has gained impetus among policy makers as a method to lessen rising wage as well as inequality of income. However, higher minimum wage or increasing price floor on the price of labor leads to job loss and probable magnitude of those losses.

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368 Words | 2 Pages

According to the law of supply and demand, when a good goes up in price the demand for that item will decrease. In the labor market, labor is a economic good, when the price for labor goes up the demand will decrease. When setting a price floor, in which the price cannot dip below that rate, there will be a surplus of that good if the price floor is above the equilibrium price. The equilibrium price for low skilled labor in many areas is above the federal minimum wage, but in the areas that this is not true there have been large amounts of unemployment following dramatic increases in the minimum wage (Soergel). When a higher minimum wage is enacted the number of available jobs for low skilled workers will decrease.

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733 Words | 3 Pages

A minimum wage increase from “$7.25 to $10.10 would result in a loss of 500,000 jobs”. ("The Effects of Minimum-Wage Increase on Employment and Family Income”) This claim is better because it shows how raising the minimum wage will decrease job growth instead of increasing it. But, the minimum wage should be increased because increasing will also increase economic activity and spur job growth, decrease poverty, and improvements in productivity and economic growth have outpaced increases in the minimum

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551 Words | 3 Pages

Various arguments that have been put across for why the minimum wage should be increased will be explored. The research will provide an introduction to the issue with some historical background as well as the current dynamics surrounding the issue. After which, the direction of the paper will drive towards proving that the minimum wage should be increased by exploiting researched facts as well as evidence-based arguments that have been put forward by various experts concerning the issue. The paper will not include opposition arguments but it will focus on presenting a strong case as to why the wage should be increased as opposed to why it should not be increased or rather counter-arguing the facts presented by the other divide of the subject matter at hand. The research will use figures, numbers as well as other facts about the topic from previous research to build the case for increasing the

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2146 Words | 9 Pages

Most opponents of a consistent minimum wage claim that a higher minimum wage will boost the purchasing power of the poor population and thus benefit the economy. For example, Danziger Leif, a professor of economics at Yale University, claims that,“ For example, when Tommy is talking to the coach, the editors cut to a shot that shows the reaction of the opposing team. Before the fight began, there weren’t so many cuts; however, when the fight kicked off, there were suddenly a tons of cuts shortly after each other.” (Leif 3). In other words, if the government raises the minimum wage from $7.25 to $8, the amount of people that have an income below the poverty line would decrease by 2.4%.

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805 Words | 4 Pages

"(Brecher, 1974, P. 192) Minimum wage has existed in United States since 1938 under the new deal, and it is legalized in many other nations too. However, if we want to discuss how minimum wage would affect the United States, we must first understand what is minimum wage. In economic terms, minimum wage is a price floor, which is a government price control on the lower limit of certain product. In this scenario, cost of human capital, in other words the wage is being regulated by the government.

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588 Words | 3 Pages

Minimum wage hikes have been a long debated issue amongst workers and companies. In the article “The Minimum Wage: to raise or not to raise”, Mike Patton invalidates many of these minimum wage workers by stating that there is ample room in the upper class for those who wish to improve themselves and their economic standing (2015). This implies that achieving economic success is simply a matter of self-motivation rather than an element of luck in working opportunities. Patton continues by stating that the majority of minimum wage earners are young individuals working at entry level jobs (2015). Additionally, the minimum wage was never meant to be a career salary but a starter income for those in the early stage of their work life (Patton 2015).

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1343 Words | 6 Pages

The minimum wage has been an all-time topic that people argue about. Whether discussing or arguing that it is too low, or that it is too high. A majority of the world does believe that the government gave it to them “easy”, as in the wage it’s at now is too much. But that is false. According to Miller, G, in his article “Should Congress Increase the Federal Minimum Wage and Index It to Inflation?”

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659 Words | 3 Pages

Increasing the minimum wage could help reduce poverty and the amount of government assistance that goes on today. • If you get rid of the federal minimum wage then that leaves it up to the employers to decide what is a fair wage for the labor that they are doing. Granted that some employers would probably be taking advantage of this, this should somehow be regulated by each town/city when someone gets hired. That may be a lot of work for the city to keep up with but it would make sure that everything is running smoothly.

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1976 Words | 8 Pages

The minimum wage is therefore not sustainable for people to maintain a proper lifestyle or secure basic

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2176 Words | 9 Pages

Introduction The minimum wage is the lowest amount of compensation an employee must receive for performing labour. It is a price floor below which the market price may not fall and to be effective has to be set above the equilibrium price. Minimum wages are established by contracts or legislation by government. It is therefore illegal to pay an employee less than the minimum wage. Supporters of minimum wage say it increases the standard of living, reduce poverty, reduce inequality and boost morale while the opponents say the exact opposite.

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808 Words | 4 Pages

This has been the minimum wage for the past seven years. During these past seven years, “The cost of life 's essentials have shot up. Groceries cost 20% more, a gallon of gas costs 25%more, and average tuition at a community college increased 44%.” (Quinn, Castle, LaTourette, Morella” The price of living sky rocketed and the price for working still remains the same.

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1649 Words | 7 Pages

Minimum wage. Due to the slide on what we have learn in class, minimum wage " is a tool used by government to regulate the relationship between employer and employee by setting a lower-limit for wages" from this I understand that minimum wage is the lowest amount of salary that are allowed by law by a special agreement. The purpose of the minimum wage is to make sure that the person who work get the suitable payment for what they have work for, this also to protect them from the individual that may take advantage of them by not paying them on reasonable payments. The minimum wage also being made to create a minimum standard of living to protect health and well-being of the employee.

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1586 Words | 7 Pages

1. Introduction In the modest term, a minimum wage is a lawfully authorized minor bound for wages, but the term “lawfully authorised” is unclear, leading too many different kinds of minimum wages institutions (Cunningham et al, 2007:19). It further states that in the most straight forward cases, such as Brazil and Bolivia, the federal government identifies a wage level and all employers in the country must pay at that level or above it (2007:19). Economist have tended to oppose minimum wage on the grounds that they reduce employment , hurting many of those they are supposed to help (the economist:24/11/2012).

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752 Words | 4 Pages

It is often alleged that minimum wage plays a significant role in everyday life. Many companies and individual entrepreneurs are inclined to prioritise this notion in their business and work. In order to provide the definition of it the following interpretation can be used: minimum wage is an amount of money that is the least amount of money per hour that workers must be paid according to the law. This amount of the minimum wage depends on a country and the varieties of it are enormous. In general, there are some advantages and disadvantages of denoting the national minimum wage for a particular country.

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