Mike Schall
Mr. Reuter
Economics
10th November 2015
Minimum Wage Unfairness?
Minimum Wage it is a minimum amount an employer can pay an employee which, as of right now, is $7.25 per hour. Most individuals who are in High School or College are either working in a fast food restaurant or have a job that doesn’t require them to have a degree; we still get an income of $7.25 per hour. Minimum wage started back in 1938, which was only $0.25 an hour. As the years went by, the wages increased showing a Supply Curve, and it reached a certain point to where we have the minimum wage set to $7.25 an hour.
Fast food employees are walking out because they believe they are not getting the desired wage that they worked for. Instead of having the current minimum wage, their goal is to go on strike and demand that they have the wage raised to $15.00 an hour, which is a Price Ceiling. Already thousands of workers have walked out of their place of business in cities around the country including: Boston, New York, Philadelphia, Detroit and many more. This is mostly happening at McDonald’s having an imperfect competition. People pass by and see signs such as, “CLOSED due to STRIKE” and “Hold the burgers, hold the fries, we want our wages supersized!” Many people believe that the minimum wage goes up, which means more money; however, they are not looking at the cons of what will occur. If consumers demand more and they get what they want, it is unfair to the people who have already worked so hard in their career. Take for example Marketing; if an employee makes $20.00 an hour then that would be unfair to that person because they now have competition with a FAST FOOD RESTAURANT! Another aspect to look at is the prices at grocery stores. It is a necessity for many people to get what they desire and with minimum wage increasing, that means the prices of food goes up as well. Even if we demand for the price to go down, it will not because of how much additional money minimum wage earners alone now have. Not only that but it also shows us that the unemployment rate will increase and according to the article of, “Yes, Minimum Wage Still Increases Unemployment” it states, “In essence, minimum wage increases make it more likely that firms won’t hire new people than that they will fire current employees. For example, movie theaters have stopped employing ushers almost entirely. And many companies are moving toward more automation, at least partly because of minimum wage increases.” Minimum Wage will differentiate each year and it is going to be a tough decision whether the protesters will win or not.
Work Cited: Davidson, Paul. "Fast-food Workers Strike, Seeking $15 Wage, Political Muscle." USA Today. Gannett, 10 Nov. 2015. Web. 11 Nov. 2015.
"U.S. Minimum Wage History." U.S. Minimum Wage History. N.p., 19 June. 2015. Web. 03 Nov. 2015.
"Yes, Minimum Wages Still Increase Unemployment." Mises Institute. N.p., n.d. Web. 03 Nov. 2015.
The topic of minimum wage can be an interesting debate as there is strong evidence that it will both benefit the economy and cause problems if it is raised too much. Even though the input costs will go up for producers the cost will be offset by increased consumer spending. As the wage is raised people will have more disposable income which means they will buy more goods.
ReplyDeleteThis is a very interesting topic because there's strong arguments to both sides. Although by paying your employees more, generally the price for most products will increase making goods more expensive. The objective of this is simply because businesses are trying to make money, if they have to pay their workers more, then they will have to raise their prices in order to make the money they are losing back. I personally believe this will not be much of a problem because since they will have more money, they will be able to purchase more goods.
ReplyDeleteI really liked how you talked about both sides of the debate pertaining to minimum wage. I think your cons of raising minimum wage are fairly accurate. Something else I think you can add to the discussion is how those who work and receive minimum are often those who defend it the most.
ReplyDeleteMinimum wage today is a huge debate. Many people are fighting to get it raised while others are staying firm in their belief that it should remain the same. Furthermore, I believe raising the minimum wage would be highly ineffective for many reasons. For starters, like you said in your article it is unfair to other employees working harder in different firms that require years of schooling and education. Someone working at McDonald's flipping burgers by NO MEANS should be making $15 and hour when the nurse over at the doctors office is making only 12-15 after years of schooling. Another reason is that when the wage is increased, many companies will have to lay people off to compensate for the increase costs. In addition these companies will want to keep the more experienced employees already making more than the minimum wage and the inexperienced people demanding the higher wages will wind up jobless. Top top it all off, there is the huge possibility of increased inflation all together. There will be more disposable income, therefore prices will just go up as well, both because companies know people have more money and to compensate for the higher costs. Raising the minimum wage would be a silly decision, as it already has been increasing from $.25 to $7.75 and has had no effects. Minimum wage should only be increased small amounts at a time to keep up with inflation.
ReplyDeleteI'm pretty sure a minimum wage is a price floor not a price ceiling. Minimum wage would cause one of two things. The first would be the automation of easy tasks typically performed by employees. It would be cheaper for employers to develop technology to do the work than it would be to pay employees the ridiculous $15.00 per hour requested wage. The second response would be an increase in prices in order to maintain current profit levels. This would likely hurt the business, causing some businesses to go under. If this happened there would be several people out of work.
ReplyDeleteWhat should be understood about the raising minimum wages would be that inflation would increase meaning all the prices of other goods would also increase. Also less people would be hired at minimum wage jobs and more higher skilled people would be hired. Or it would go unaffected and higher paying jobs would adjust to the inflation and also pay more.
ReplyDeleteIt is a interesting debate and both sides have strong points. However if the fast food workers would get paid more, inflation would occur and prices of goods would rise. Also the fast food workers are only getting that much money since they are working at a fast food place. If you want more money you should get a higher paying job.
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