Minimum wage is defined as the lowest rate at which workers may compensate at their place of employment. The very first minimum was law was passed in 1938, guaranteeing the workers at least 25 cents an hours. Today, minimum wage is at $7.25 per hour. A bill has been proposed to raise the minimum wage to $10.10. Of course, the wage would not rise immediately. The raise would take place in three increments at 95 cents a piece to coincide with the ever-rising cost of living. Since Barak Obama has proposed the law, 5 States have passed it. In this short essay, I will discuss minimum wage and its effects.
Everything has its pros and cons’; increasing the minimum wage is no exception. I certainly believe that it is time for an increase in minimum wage. Raising the minimum wage to $10.10 obviously
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Typically, wage distribution reflects the productivity of the worker. If the government decides to enforce minimum wage increase on labor market, the workers whose productivity falls below the minimum wage will find very few, if any, employment opportunities. Historically there has been evidence that employment loss has been one of the outcomes of increased minimum wage. A higher minimum wage, may be too heavy a burden on employers, especially small business owners and those employers, in turn, would be unable to hire as many people. Since January 1st 2014, employers with 50 or more employees re required to provide a package including essential benefits for their employees. If they do not, they will suffer a penalty. In result of the government-mandated package, the cost of hiring an employee would increase by $1.79. $1.79 multiplied by 50 plus associates is astronomical. This alone may increase the unemployment rate because if employers have to pay more for every employee, they are going to look to cut cost somewhere. In my opinion, if minimum wage goes up, everything else will go up