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Negative Effects Of Minimum Wage

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Economic Impacts:
Today, Minimum wage is an important labor policy and it affects the nation's economy and people's welfare. Minimum wage aims to help not only those who are facing extreme poverty, but also human dignity. In addition, minimum wage policy affects the decisions of producers and consumers and affects the whole economy.
Supporters of this policy think that it increases the standard of living and reduces poverty. They also believe that it will ensure equality among workers by giving them a fair wage without discrimination by gender or race. For the whole economy, supporters believe that minimum wage spur consumption, which mean putting more money into the economy by allowing workers to spend more. The Council of Economic Advisers …show more content…

Opponent’s opinion is that minimum wage forces the employers to hire fewer employees because they have to pay more to their workers and the cost will increase. Other opponents say that it can increase the prices as businesses must raise their prices to adjust the higher wage and keep the profit stable. In 1995, the Congressional Joint Economic Committee published a review of 50 years of academic research on the minimum wage . The study found many negative impacts of increasing minimum wage, the findings include: reducing training for workers, increase job turnover, reducing school attendance, and encouraging employers to hire illegal workers. Also, because the minimum wage levels are different from one state to another, some states have higher minimum wage, some economists believe that this would have negative impacts on investments, as investors would like to invest their money in states with lower minimum wage to minimize the cost and to maximize the profit. In addition to some currently existed industries which would tend to shift their investments to other states with lower minimum …show more content…

government imposed a new federal minimum wage in 2007 on American Samoa and the Commonwealth of Northern Mariana Islands (CNMI). While this increase had good intentions—a reply to the islanders' wages being lower than that of their mainland counterparts—the results were shocking. As indicated by another report from the United States General Accountability Office (GAO), the 19 percent decrease in employment in the workforce that American Samoa has encountered since 2008 was in vast part the consequence of imposing minimum hourly wages across different industries. The islands’ essential industry is tuna fish canning, with major employers Chicken of the Sea (Seafood company) shutting and Starkist (Tuna company) reporting enormous layoffs. In 2008 the number of workers in the canneries was somewhat more than 19,000 yet has following tumbled to

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