Minimum Wage Essay

Ameri ignore histrions will let a 1.75$ improver in their minly absorb by the end of 2015, as prexy Barack Obama lately called to raise the federal nominal prosecute from $7.25 an hr $9.00 an hour. This annex in the borderline engross of American citizen aims to help population with a low annual profits cooks, employees of the janitorial industry and many separates working these undeniable menial occupations atomic number 18 set to benefit. The discolor house estimates that this measure will emanation the pursue of approximately 15 millions low-income workers. fostering the negligible lease, according to the White home plate press, will have some confirmatory effect for low-income families however, many companies are oppose to raising the stripped-down rent. A higher(prenominal) mesh will have a direct impact on the propose up of business. Some economists argue that higher stripped-down wage will way out in an increased unemployment percentage.Althoug h minimum wage laws can fix hourly pay, they can non guarantee jobs. Employers are not willing to pay a worker more than than the value of the additional product that he produces. For example, if a worker produces 4$ worth of goods per hour and because of the minimum wage he has to be salaried 5.15$. Since he address more than what he produces it makes it hard for him to find a job.At one catamenia in the article, the President said that one of the best slipway to get the economy going once again is to put money in the pockets of mess who work. (Lowrey)It is true that families with low income will construct more money it is projected that a family that is earning $20,000 to $30,000 a year will send off an additional $3,500 in their income. (Lowrey) This general official outcome of increasing the minimum wage has led many law makers to falsely assume that increasing the minimum wage is an legal way to fight  scantiness.From the point of view of an economist, raising the minimum wage may increases the prospect that a poor family will escape poverty through with(predicate) higher wages, but it does increase the probability of another family with average income will croak poor as a result of minimum wage giving facelift to inflation. It also decreases the proportion of families with income near the poverty line, suggesting that it more will be more difficult to escape poverty. We all do that if the minimum wage increases then the cost of living will inevitably increase as well as a result of inflation.Economists are against minimum wage laws because they create a price floor. In this case, a price floor is not the price that products can be sell for, but what price employers can pass off on their employees. For non-economists, legislating a minimum wage is commonly seen as an effective way of giving raises to low-wage workers. Unfortunately it, equal any other price floor, creates a surplus. In this case, the surplus is a big than expect ed number of workers more of are willing to work in minimum-wage jobs than there are employers willing to hire at that wage.Economists think that there should not be any policies concerning wages an employee should be paid what the employer thinks he/she deserves. Minimum wage increases make unskilful workers more expensive and thereof undesirable relative to all other factors of production. (Mankiw) For example, if skilled workers make 15$/hour and unskilled workers make cardinal dollars an hour, skilled workers are five times as expensive as the unskilled. Imposing a minimum wage of five dollars an hour makes skilled workers relatively more agreeable by making them only three times as expensive as unskilled workers.Another important device characteristic of the policy to increase minimum wage that was not discussing in the article is that it may also negatively impact workers by changing how they are compensated. Benefits such as paid vacation, free room and identity card i nexpensive insurance and subsidized childcare are an important part of the summate compensation for many low wageworkers. (Mankiw) When minimum wages rise, employers can control marrow compensation costs by biting benefits such is the case for the United States today.The employer forever had to follow the minimum wage in order to pay their employee. The minimum wage should not be existent forthwith the employer should have the choice to pay their employee base on their knowledge. An employee that knows more and produces more should have an higher hourly range.SourcesTextbookMankiw, N. Gregory. Principles of Economics. 6th. Mason, OH, ground forces 2012. Print.WebsiteLowrey, Annie. Raising Minimum Wage Would salvage Income Gap but Carries Political Risks. newly York Times. N.p., 13-02-2013. Web. 5 Oct 2013. .