Category: Minimum Wage

Most of exchanges of goods and services, in modern times, said to be dictated by the ‘law of supply and the law of demand’. The former being that as prices rise the greater the number of suppliers, willing and able to supply and the later, as price rise, the fewer the number of people willing and able to buy the good. The interaction of the two laws leads to the market equilibrium i.e. the point at which demand and supply meet. If there is excessive demand for a certain service or a product the price, therefore, increases. This triggers an increase in supply so that suppliers benefit from the rising price and people’s wants. This law is reflected in the labor market. If there is an excess of workers in the market, meaning that fewer companies wish to hire workers than there are workers available, the price of the labor will diminish and vice versa. This is because each individual worker is less valuable to the firm as they have alternatives. Nowadays, several governments in several different countries have adopted a minimum wage policy. The minimum wage can be defined as “the smallest amount of money that employers are legally forced to pay someone who works for them”. This set of rule guarantees a certain amount of money that a worker will receive for their labor. Any minimum wage is intimately connected to the economy of a community. Thus, changes to the minimum wage have knock-on effects for the local community. Increasing the minimum wage will, arguably, bring out drastic negative repercussions for whichever society. It can ultimately cause a decrease the number of jobs available in the local community and it may also cause firms and companies seek to relocate to areas with a lower minimum wage.

The most salient (and widely accepted) argument against the minimum wage, is that raising it will lead to depriving those most in need of job positions. Whilst the minimum wage does guarantee workers that they will receive at least a certain amount, this is only helpful for those in employment. Although this insurance of a certain amount of wage might seem enticing, its effect will likely be more detrimental than positive in the long run. Employers will dislike the increasing price they have to spend on labor. In order to combat this, they may choose to have fewer workers working for the business, so as to maintain the same costs as before the introduction of/change to the minimum wage. Even a thriving business that has more than enough orders to make products and render services, ultimately, the fall in the size of the workforce will prevent the business to further expansion and profit. As the minimum wage increases, numerous people working a part-time job, or people with mini-jobs will have a high probability of losing their work, as they are less valuable to the firm than full-time workers. Owners will forgo employing local workers in favor of immigrants, who are often cheaper. The increased minimum wage will likely force the employers to maintain more valuable workers who are better paid by letting go part-time job workers. They may even choose to pursue a nepotistic strategy, keeping their family members employed. This will definitely prove devastating for who are newly redundant. Furthermore, the general price level of goods tends to rise as the minimum wage goes up. Food, rent, groceries, beverages and the price of several other necessities will increase which will only serve to worsen unemployed people’s vulnerable economic status. People who lost their job in due to the increased minimum wage may be forced to relocate to an area with a lower minimum wage and/or lower living prices. This brain drain will lead to a severe resentment from low-wage workers and intensify the polarization of the ‘haves and the have-nots’ since people with high-skill sets and who get paid enormous wage do not get affected by an increased minimum wage.

When considering this controversy, a great epitome of this could be the situation in South Korea. The intense increase in minimum wage is currently viewed as an obstacle that deters any advancement to South Korea’s economy. South Korea’s economic structure is rather different from that of the US, and that of its wealthy European counterparts. The vast majority of the country’s GDP is attributed to the overseas economic activity by the conglomerates like Samsung, Hyundai and others, and yet a significant number of people are self-employed. This is due to the fact that many choose to retire or are let go well before the mandatory retirement age of fifty-five. Many of these workers set up their own business rather than seeking out another employer. Some of the most popular ventures include but are not limited to: a personal cafe, fried-chicken delivery company, a restaurant. These businesses usually consist of only an owner and several part-time workers who work for the minimum wage. If the minimum wage is artificially placed at a high price and continues to rise, it will damage all these self-employed businesses. With minimum wage still rising, the owners will not be able to afford to keep as many employees as before, leading to nationwide layoffs of part-time and ‘mini’ jobs. This has been observed in South Korea with the introduction of the government’s economic plan: The Wage-led Growth policy. It saw a 16.4% rise in the South Korean minimum wage, the steepest rise in South Korean history. The policy has been unpopular as seen in the manufacturing sector. The number of factory workers decreased by 79,000 in May 2018. One thing that sets the Korean economy apart from others is a large number of part-time job workers and ‘mini’ jobs. According to Statistics Korea (KOSTAT), in the first quarter of 2018, the number of people working fewer than 36 hours was 4,150,000, the highest rate of all time. It is hardly up for debate that the ‘mini’ job is the new trend in the labor market of South Korea. People who worked fewer than 18 hours per week increased from 1,324,000 to 1,426,000, i.e.7.8%. Whilst these ‘mini’ jobs and part-time workers are getting paid with minimum wage, the radical increase of minimum wage led to businesses to lay-off several workers. Which in turn causes a rise in a number of self-employed workers or machines. As mentioned above, a rise in minimum wage inevitably leads to a rise in the price of every single good and service within a said economy. According to Korea Consumer Agency, the price of processed foods, such as soft drinks rose 11.9%, as did pork belly (5.6% rise of price) – a food staple in South Korean cuisine. The quality of life for the workers may have been enhanced due to their better salary. However, countless self-employed businesses are shutting down and laying off workers. This proves that a minimum wage is not a universal fix all. The nature of the South Korean economy shows a group that is by no means negligible are worse off. The collapse of these self-employed owners means the collapse of Korean-middle class. The debts from these self-employed individuals have reached nearly $300,000 per person, a figure derived from the division the total debt of self-employed startups by a number of business owners. The total amount is $465,594,280,607, and by dividing this by the 5,600,000 self-employed owners leads to $300,000 per a self-employed owner. If half of these self-employed people shut their business down and are unable to repay the debts, the Korean economy will struggle drastically, as these startups form a significant part of the economy. If these companies were to default payment they would face bankruptcy, putting the whole economy in a weaker position. This case shows a devastating effect that happened in the Korean community, in the nation as a whole.

When taking in to account the global implications, the problem and controversies surrounding the minimum wage prove not only to be a South Korean issue but rather a global one. This can be seen by the radical increase in the minimum wage in Seattle, in the United States of America. In 2014, the Seattle state increased its minimum wage from $9.47 in 2014 to $11 in 2015, and later $15 in 2017. This case is particularly interesting as it attracted international attention and sparked debate as to the benefits or disadvantages of the decision. The Seattle state, like the South Korean government, had intended to cause income-led growth, stating that “boosting the quality of low-skilled, low-wage workers will trigger an increase in consumption, eventually spurring the whole economy”. Many of the workers were not paid enough when considering the high price-index in Seattle – a significant driving force behind the government’s drastic plan. After observing the consequences for three quarters in 2016, the Washington University concluded that low-skilled workers were operating in Seattle regardless of which industry. The workplace unit decreased about 7% in the short period of time and the working hour decreased 9.4%, in spite of the rise in wages. The crucial takeaway is that the change in workers’ monthly wage actually fell: it decreased 6.6%, which is about $125 per month for a worker. The average of low-skilled, low-wage workers monthly wage declined from $1,897 to $1,772 declining $125. Monthly wage diminishing $125 per month is not a trivial, subtle change that could be ignored when considering the amount of wage, they receive in a month. Especially when taking into account the rise in the cost of necessities such as buying foods at the grocery store and living expense ultimately leaving workers in a more desperate and worse position than before. Professor Jacob Vigdor, from Washington University, concluded in this research that increasing the minimum wage had not worked out well in the past, where most of the people had their job in manufacturing factories. Ensuring their wage, leading to their consumption and superior living quality, will lead to a better economy of a nation. However, circumstances and the structure of the economy is completely different in this modern day, where most people work in a service industry and part-time jobs, concluding that blindly raising the minimum wage will backfire and be harmful to the economy, as was the case in the United States.

When looking at the example of city Seattle, the increase in minimum wage triggered a deficit as it did in other countries. Considering the particular structure of the Korean economy i.e. the independence of workers, the sharp rising of minimum wage definitely seems to be more harmful compared to some positive effect it brings to the community.

The minimum wage increase has been an ongoing conversation among almost everyone which it should be because it is a very important topic. Increasing the minimum wage has seen many pros and cons. Many people are unaware of what the words minimum wage even mean, and that is the lowest amount of pay that an employer is allowed to pay their employees by law. On October 1st, 2017 minimum wage in Ontario was $11.60 and in January 2018 minimum wage in Ontario went up to $14.00 per hour, this was a $2.40 rise. When this happened, many employers dealt with the downfall; and now again we want it to go up yet again. It may only just be $1.00 but it will affect many people’s lives negatively. Employers get negatively affected by the increases in the minimum wage because it results in their payroll expenses going up as well. As a solution to this issue hey will begin to lay off employees. Moreover, employees face the biggest cons of the increase because they will have to pay a lot more in taxes which will decrease their income.

Increasing the minimum wage may seem like a good idea when you just look at it as plain as that: increasing how much we get paid. We never really look at it past that fact; which is why many of our opinions on the topic stand where they do. I have come to the conclusion that increasing the minimum wage will not benefit us. Increasing the minimum wage will increase inflation due to the fact that people will be making more money so the prices of goods and services will go up as well. Unemployment would rise due to the fact that business will want to hire people who are more skilled or have more experience compared to the employees they have and were usually hire.

In order to fully understand how minimum wage affects our society we need to look at where it all started – Fair Labor Standards Act. In 1932 the act was drawn up by Senator Hugo Black where it required employers to have a 30-hour workweek, as a result, there was a lot of push back (Perez, 2015). A big push that came for the act was in 1936 when President Frederick D. Roosevelt was in New Bedford, Massachusetts and a little girl explained to him that her working conditions were getting worse and her pay got cut down from $11.00 to almost $4.00 per week (Perez, 2015). Moving forward just 6 years later a newly changed act was approved for 8 hours days and 40 hours week and on top of that if employees worked 44 hours they would get paid for overtime (Perez, 2015). The act made the minimum wage $0.25 per hour and since then it has gone up about 22 times (Perez, 2015). The act covers more than just the minimum wage aspect of employment; it also touches on children under the age of 18 are not permitted to work dangerous jobs such as mining or manufacturing (Perez, 2015). On the other hand, the act does not look out for seasonal employees, executives, and some other employees (Perez, 2015).

One of the reasons Canada adapted minimum wage was because of this act and the government saw how many benefits came from it (Derry et. al, 1922). In order to put an end to the exploitation of women and children, Canada brought in minimum wage (Derry et. al 1922). When it first came to Canada people were either for the minimum wage or against it. Those who were for it thought that it would improve workers living standard and reduce poverty and inequality. Those who were against it argued that it would get rid of jobs and increase poverty with those who were lacking skills (Derry et. al, 1922). All across Canada, the minimum wage laws are very different. For instance, in 1917 Alberta passed a law that stated no person working in a factory, office building, or shop would be making any less than $1.50 per shift; this was adapted from Utah and Arkansas where they had very similar laws (Derry et. al, 1922). On the other hand, when looking at Manitoba we see that in 1919 they passed a law that restaurant and office workers had to make a weekly minimum of $12.50 (Derry et. al, 1922).

Moving on, looking at the positive effects of the minimum wage increase. Starting off with the increase in productivity when the minimum wage goes up as well. Studies done by leading economists have shown that when minimum wage increases the morale and work ethic of the staff when they truly believe that they are getting paid a fair wage (Hon, 2014). Many economists have claimed that when employees get paid more it results in better physical and mental health and reduced tiredness, which all in all makes for higher productivity (Hon, 2014). According to a research paper done by economists saw that when employees are making more there is a lower chance of them missing work which results in higher productivity (Bucila 2010). Taking Amazon as an example they raised how much they were paying their employees to $15 and saw big growth in how productive their employees were. The reason behind this was because no one wants to lose a job that pays them more then what minimum wage is right now; therefore, they work harder than they need to in order to keep their jobs (Bellemare 2009). Looking at the psychology aspect of increasing productivity it has been suggested that employees’ attitudes, satisfaction, and behaviors influence the way they work (Kim et, al. 2019). It is also seen that with better pay, training, and job security would make employees a lot more satisfied which results in them working harder and increasing productivity (Kim et, al. 2019).

Low wages play a major role in poverty and health inequality. Therefore, if the minimum wage was increased inequality would be decreased (Dube et, al. 2007). The Canadian Institute for Health Information came out with a report in 2015 stating that labor market policies such as minimum wage was a big poverty reduction strategy that would reduce health inequality (Lenhart et. al, 2017). It has been shown in multiple different studies that people with lower incomes have worse health outcomes for instance, higher rates of chronic disease and lower life expectancies (Lenhart et. al, 2017). One province that is dealing with this issue the most is British Columbia due to the fact that employment income largely determines whether a family is able to avoid poverty and have the right tools to avoid poor health (Lenhart et. al, 2017). These conditions are known as social determinants of health and when someone has a higher social position, they will have better health based on their circumstances and goods and services they have access to (Lenhart et. al, 2017). According to a research report done by the Provincial Health Services Authority, it was confirmed that low-income British Columbians are at a much greater risk of suffering from chronic diseases in comparison to citizens who make much more (Lenhart et, al. 2017). The Health Officers Council of British Columbia found that in 2008 there was a large number of deprived people which included the unemployed and working poor who all had lower levels of health than the average citizen (Lenhart et, al. 2017). Going forward just 5 years they updated their statement by speaking about how the differences in life expectancy between the poor and wealthy had become much larger which means that the health gap has not stopped winding (Lenhart et, al. 2017).

Furthermore, increasing the minimum wage not only has benefits but also drawbacks. These drawbacks include increasing both unemployment and inflation. A recent study done by the Federal Labor Standards Review showed that if there was about a 10% increase in minimum wage will reduce employment by 0-3% (Kerr, 2008). It has also been seen that in many minimum wage studies, little to none have shown positive employment effects (Kerr, 2008). Moving on, if the minimum wage is increased it is more likely that many young workers and less skilled workers will lose their jobs (Lammam et, al. 2018). When the minimum wage gets increased employers to respond by reducing the number of employees or cut down the number of hours worked. Many low-paying jobs such as wholesale and retail trade saw a lot of unemployment in the past year when the minimum wage went up to $14.00, around 50,000 people across the country lost their jobs in this sector for the first half of the year (Lammam et, al. 2018).

In addition, not only will unemployment increase but inflation will become more prominent. In 2017, when minimum wage went up to $11.40 CPI (consumer price index) inflation was boosted as well in 2018 (Brouillette et, al. 2017). The report predicted that if the minimum wage were to go up even more in 2019 that inflation will go up 0.2 percentage point in comparison to the 0.1 percentage point it went up in 2018 (Brouillette et, al. 2017). An example that was used was when McDonald’s employees asked for a wage of $15 in 2017 which would mean they would make around $30,000 a year (Brouillette et, al. 2017). Most employees at McDonald’s are teenagers and teenagers making $30,000 a year is more than some adults, and teenagers don’t have many responsibilities (Brouillette et, al. 2017). As a result, the money they make will be going to goods and services which increases inflation. Increasing inflation as a response to increasing minimum wages is called wage-push inflation (Machlup, 1960). In order to make a profit after an increase in wages, employers must raise the prices they are charging for their goods and services (Machlup, 1960). It has been seen that inflation and minimum wage increasing go hand in hand. This is because when inflation goes even higher up, higher wages are needed in order to satisfy this (Machlup, 1960).

All in all, after looking at both sides of the argument I understand the benefits and drawbacks of increasing the minimum wage. Increasing the minimum wage has been said to increase productivity in many different industries of work (Bucila, 2010) as long as the employees are satisfied and are happy with their work (Hon, 2014). On the other hand, some industries work cannot be measured, therefore that productivity is unable to be seen. In addition, employee satisfaction is not something that can be easily seen. Increasing the minimum wage gives an opportunity to people who usually do not make as much to close the gap between them and wealthier people in many ways, for instance, health-wise (Lenhart et. al, 2017). Moreover, as the minimum wage increases the prices of these goods and services that people need health wise will go up as well. Therefore, people who do not make as much will be at a disadvantage once again. When looking at the drawbacks of increasing minimum wage the unemployment rate for low-skilled workers becomes very high (Lammam et, al. 2018); yet those workers are the ones who have seen the most benefits from previous increases minimum wage in previous years (Neumark, 2015). With minimum wage going up it causes inflation to go higher as well (Brouillette et, al. 2017). On the other hand, increasing the minimum wage is not the only reason why inflation increases. Inflation has been prominent in our economy for many years even when the minimum wage was at a low. Therefore, we are unable to put all the blame on increasing minimum wage for the reason of inflation (Haberler 1960). Other reasons for inflation to begin to rising include: import prices, raw material prices and declining productivity (Haberler 1960).

In conclusion, increasing the minimum wage has many strengths and weaknesses. To begin, it allows for the productivity of employees to go up due to the fact that they do not want to lose their well-paying jobs. In addition, increasing the minimum wage allows the poor to close the gap between them and the richer ones. On the other hand, increasing the minimum wage causes a lot of unemployment in teenagers and low-skilled worked because employers do not want to pay someone who has little to no experience. Furthermore, increasing the minimum wage allows for the prices of goods and services to go up as well which results in inflation. In my opinion, increasing the minimum wage always seems like the best thing that could happen for us as a society because we are getting more money to spend, but there is much more to just that. I strongly believe that increasing the minimum wage will hurt us more than anything. The reason for this is that many people will become unemployed due to employers not wanting to pay so many people. On top of that, inflation will drastically increase because people will begin to make a lot more money and as a result, the prices of goods and services will go up with it.

Introduction: The Current State of Minimum Wage and Poverty

Neediness keeps on developing in America. The lowest pay permitted by law in the United States is $7.35- every 60 minutes awfully low in the present society. Key costs, for instance, gas and lodging costs, have gone up fundamentally since the lowest pay permitted by law was last changed in 2007. The laws making the lowest pay permitted by law were proposed to improve the way of life and abatement neediness. Raising the lowest pay permitted by law is a crucial advance in diminishing neediness and allowing each family the chance to endure and succeed. A great number of Americans are beneath the neediness line and need an expansion in pay. The lowest pay permitted by law must be raised in light of the fact that it will decrease neediness and help the common laborers to help their families.

Historical Context of Minimum Wage Legislation in the U.S.

In 1933 President Franklin D. Roosevelt created a movement of financial arrangements called ‘The New Deal’. One of those arrangements which ended up known as the lowest pay permitted by law, ensured that all specialists in America win enough pay to accommodate their families. The New Deal denoted the start of government control of wages to make certain each laborer has the capacity to acquire a living pay. The monetary framework was made by individuals, is kept up by individuals, and is always adjusted by individuals.

The Role of Government and Ethical Considerations in Minimum Wage Laws

To support a dynamic economy, the administration needs to assist the poor with their assets. The poor will be poor not on the grounds that they don’t work, but since government has neglected to give compensation that American families can get by on. Cost can be an issue yet the expense to finance the specialists with low-wage employments are higher. Recognizing moral and religious conventions should be thought about. In Judaism and Christianity God says individuals in a network need to help the poor exist in that network. Our present the lowest pay permitted by law never address the expansion in gas, lodging and medicinal services costs the average workers battle to pay for. On the off chance that legislature has the chance to get a huge number of families out of neediness, at that point why not accept that open door to help individuals help themselves.

Living Wage Movement and Local Wage Increases: Case Studies and Impacts

Actually, raising wages at the nearby and state level demonstrates an expansion in work and a diminishing in families on welfare. Starting in 1995 a living compensation development has constantly attempted to influence nearby and state governments to build the lowest pay permitted by law. Activists from chapel gatherings and non-benefit associations have indicated developing enthusiasm for affecting many urban communities over the United States. For instance, after Santa Fe, New Mexico’s lowest pay permitted by law went from eight dollars and fifty pennies to nine dollars and fifty pennies work expanded in the city’s inn industry. A large number of these associations have fled to a portion of the significant urban communities in America and showed their perspective in affecting the lowest pay permitted by law levels. Conversely, raising the lowest pay permitted by law may mean organizations should finance the expansion in pay by raising costs on their items. By direct association there will be less spending by the customers. Obviously, raising the lowest pay permitted by law has constructive outcomes differing from state to state contingent upon the essentially greater expenses of living in a state, for example, Alaska contrasted with a territory of California’s way of life.

Public Opinion and Political Bipartisanship on Minimum Wage Increases

Broad investigations have demonstrated that most of Americans bolster making a living pay. As indicated by a recent report taken by the Employment Standards Administration, eighty-three percent of Americans concur that the lowest pay permitted by law ought to be brought up in request to diminish the destitution. Bill Samuel of A.F.L.- C.I.O. states, “The open is path in front of Washington. They consider this to be a fundamental matter of reasonableness, the supporting of essential work law in this nation, a story under wages so we’re not rivaling Bangladesh”. Many issues in Washington bring partisanship between the Democrats and Republicans, however, in raising the lowest pay permitted by law the two gatherings show bipartisanship. Measurements recommend ninety-one percent of Democrats and seventy-two percent of the Republicans support a compensation increment. As almost everybody expects lower-breadwinners are in most noteworthy help of an expansion in the lowest pay permitted by law in any case, seventy-six percent of the raised workers are similarly as sympathetic for an update in wages.

Consequences of Minimum Wage Increases on Employment and Economy

Raising least wages won’t build joblessness. By giving the lowest pay permitted by law laborers an expansion in pay implies giving the specialists extra cash to spend consequently, making an accommodating gradually expanding influence on the country. Shopper spending is a fundamental variable to an effective budgetary market. Margot Dorfman of U.S. Lady’s Chamber of trade pronounces: “When organizations don’t pay a living compensation all general public pays. We pay as organizations and networks endure monetary decrease”. The measure of duty dollars going to families that are not ready to manage the cost of the necessities required for their consideration is a cosmos of the issues that face America’s economy. Extraordinary segments of the mounting national obligation are expected to finance the low – working class families. Each time the lowest pay permitted by law has improved, customer spending has enhanced. The nation has experienced occasions with no difference in the government the lowest pay permitted by law. States assumed the liability into their own hands and steadily improved the lowest pay permitted by law, rewardingly encountering prevalent private venture patterns.

Faultfinders of raising the administrative the lowest pay permitted by law proposes will add to a subsidence since organizations would be more averse to procure new representatives and the central government ought not meddle with a free-showcase society. Expanding the business’ untalented laborer’s checks will make strain to build the gifted workers checks too, leaving organizations with less cash. The truth is thirty-seven million Americans are living in destitution and are on sustenance stamps. The central government’s point of convergence ought to be to enable natives to give the most ideal life and give families openings. Essayist David Ramm proclaims that “Altering the lowest pay permitted by law laws is the same a social approach than the one-hundred billion dollar a year home loan reasoning which enables individuals to buy homes”. Critics finish up in the event that every city pre-decided higher living wage, at that point business visionaries would preferably improbable to set up organizations there. On the off chance that urban communities are weakened by neediness and separated neighborhoods, in this way, business visionaries are not going to bring their organizations into those urban areas either. The government needs to give organizations considerable tax reductions and less limitations to give the organizations the cash to raise their specialist’s checks. Advocates state, for instance, that the open help for raising the lowest pay permitted by law is on the grounds that the open is acting candidly instead of legitimately. Because the open thinks about the poor does not propose the open is acting irrationally or financially unreliable.

Addressing Counterarguments: The Debate over Minimum Wage Increases

A few reasons represent the developing compensation hole between the rich and the poor as a result of huge organizations. For instance, Walmart is a standout amongst the best open partnerships in the nation, yet, the company is outstanding for giving their representatives fundamentally low wages. Substantial retailers, for example, Walmart establish ruthless estimating, which makes their items costs underneath the market an incentive to push the challenge away. At the point when the challenge leaves, the organization can raise costs essentially. The United Food Services says that Walmart influences American citizens on the grounds that their medical coverage covers just forty-three percent of their laborers. Supporters debate that Walmart is simply in paying low wages because since the beginning incompetent specialists have dependably had lower pay rates. Educator of business morals at Babson College, Jim Hoopes closes, “Front-line administration part workers have never made bearable wages”. Mr. Hoopes neglects to refer to that partnerships have never gotten the measure of cash Walmart has in the previous decade. Actually, a specific level of vast organizations misuses the poor by not paying them decent wages so as to expand the company’s benefits.

The pay hole between the rich and poor is enlarging a result of salary disparity. An examination done by essayist Noel Merino analyzed the most generously compensated CEOs since the twenty-first century and have taken in the normal pay they were gaining is thirty-seven and a half million dollars for each year. The normal laborer is the thing that make their organizations fruitful and enable these officials to acquire top pay. Without the run of the mill laborer the organization does not exist. Maybe, salary disparity exists since stream down financial matters isn’t working. Lower class families are not expanding the pay as quickly as the high-salary family units do. Training, off shoring, innovation, tax breaks and associations are for the most part supporters of pay disparity.

The remote challenge and innovation hurt the average workers. Employments once thought as secure are presently being re-appropriated to China and India. Everything Americans have are made in China and numerous innovative employments are re-appropriated to India, pulverizing a great many occupations for each year. The re-appropriating and innovation keep on augmenting the compensation hole between the gifted and physical work employments. The specialists in China and India are happy to work for less pay than the Americans in light of the fact that the typical cost for basic items in America is altogether higher. Bosses misuse the open door since its less expensive for them. Maybe, businesses never considered the proviso could balance since individuals would be out of employments, in this way, unfit to buy their items.

The powerlessness from those from low-salary families to acquire a school training is adding to stale livelihoods. Getting a four-year degree is a definitive open door for money related security, lamentably, it’s about outlandish for the poor to bear the cost of even junior school trainings. After the second World War the GI Bill was executed for all officers getting back home to get a free school instruction. A huge number of men and lady presently were taught, helping Americas’ economy prosper. Americas’ training framework is upheld by nearby property charges. Wealthier neighborhoods are accepting better schools and the poor get ill-advised training. Consider the financial perspective since it clears up how extraordinary the youthful grown-ups between the ages of nineteen to twenty-four act among lower and higher salary families they originate from. The school instructed people will in general be progressively capable by not having youngsters before graduating and getting hitched, contrarily, non-taught people will in general get pregnant a lot prior making them relinquish their tutoring.

The United States government has a critical activity to ensure each family has a reasonable chance to convey monetary help to the poor. This nation can never again stand to pay for every one of the necessities the lowest pay permitted by law neglects to give. The cash the administration is paying for the poor in social insurance costs extraordinarily surpasses the expense of just raising the lowest pay permitted by law and putting more cash into lower-pay families. Individuals need to begin having the capacity to climb the pay scale and demonstrate to them it’s an incredible reality the general population can accomplish whenever given the chance. Raising the lowest pay permitted by law will just upgrade open door for the more youthful age to succeed and climb. Instructing the young about high schooler pregnancy and penitentiaries we can significantly decrease the measure of disheartening situations. At the most punctual instructive dimensions youngsters become familiar with the soonest, in this way, upgrading these grade schools will be to extraordinary advantage for their future training.

Conclusion: The Necessity of Raising Minimum Wage for Economic and Social Progress

Through administrative arrangement and government lawmakers’ acknowledgment, the best nation can significantly upgrade each family’s life and opportunity. This social issue is profoundly founded on feeling and rationale. Government officials work for the general population; in this manner, they must give it their best shot to do directly for the general population. The lowest pay permitted by law must come back to its motivation proclaimed in the Roosevelt organization, to give enough salary to a decent living. The cash America is spending for the poor due to the insufficient consideration is sponsoring the disappointment of managers to raising the lowest pay permitted by law.

Minimum wage is the compensation payable to laborers as fixed by law. Should the minimum wage be raised? I have mixed emotions regarding this topic. If minimum wage is raised, it would hurt most organizations, there would be fewer open positions. I think if the minimum wage were raised from $7.25 it would probably hurt public and private entities. Especially during the pandemic, most companies are not flourishing. Raising the wages would mean bigger paychecks and those small businesses may not be able to support their employees.

That is cash that most independent companies simply do not have or can payout. So, what might they need to do to make up for that deficiency of cash? They either need to lay off workers or raise costs and neither of the decisions will profit the economy. Secondly, if the minimum wage is raised it would create less work or make better jobs less accessible for laborer. The good thing is, if by chance that you have individuals working at McDonalds for $7.25, and minimum wage was raised, individuals who are heading off to college now have a job making a fair paycheck. At least if the employee is going to college, it would look good on their resume to receive more money.

Presently considering a high school senior who does not really like school, raising minimum wage may provoke students to drop out and go straight to the workforce. Especially if minimum wage is $15. There are better approaches to help poor people. Students need to remain in school and attend a university, and if minimum wage gets raised that is motivating them to do the total opposite, to exit school and start work.

Assuming it gets raised, it will harm independent companies, they will lose open positions. How is this aiding our economy? Think about individuals who will be upset from this. Certainly, there might be a couple of advantages yet there will be much more damages. We should consider everything before we settle on our choices. Though this might be encouraging, is it the better decision for the whole country?

Raising minimum wage will always be a debate when it comes to getting compensation, as most laborers will come to an understanding that, one can never be sufficiently paid. businesses may cause issues with that decision, asserting that they pay more to the less qualified than the more qualified. Arguments supporting raising minimum wage would be a decent impression on the grounds that the average cost for basic items will go up to the level where people are not bringing in sufficient cash to pay for their necessities any longer. Raising it would help the ones economy over the long haul by expanding purchaser consumption. afterward people would get more cash to where they are proficient to meet for their necessities and have cash to save. This would cause to an upsurge in customer consumption, and would be useful to organizations, at the same time, to the financial development in economies.

Raising the wage also delivers assistance to neediness and approaches to battle it (Dube, Arindrajit, William and Michael, 949). This suggest that a raise in minimum wage would help individuals considered ‘poor’ to move out of poverty. I agree with this idea, and I accept that it would help people who are in poverty. Lawmakers argue that raising minimum wage is awful for the economy since it raises pay. Raising the wage would contribute to government assistance structure and diminishing the quantity of people on government assistance (Osterman, 127). This is accomplished by making compensation high enough to move people to go to work, rather than remaining on government assistance. With more cash to spend and more people in the work market, this would upsurge the economy.

In conclusion, I do feel strongly about raising the minimum wage as it would help cover some of the costs of living. It would help tremendously, but it is not a fix-all remedy.

Proposal Essay

By definition, the minimum wage is the lowest wage permitted by law or by a special agreement. It was initially introduced with the purpose of stabilizing the post-depression economy and protecting workers in the labor force. In this day and age, the minimum wage is designed to create a minimum standard of living to protect the health and well-being of employees. Despite varying across states, the federally imposed minimum wage stands at a long-obsolete $7.25 an hour. This has raised an uproar among minimum wage earners who struggle to meet the demands of everyday life, considering the significant inflation the economy has experienced since the $7.25 basement was introduced. By challenging this law strenuously and rallying for its improvement, these workers have raised nationwide awareness of this issue and have sparked perhaps one of the most complex debates in society these days. Recently, their efforts have paid dividends, with various states such as New York, Massachusetts, and New Jersey following in the footsteps of San Francisco in raising the minimum wage to a more appropriate $15 per hour.

However, despite the obvious benefits a minimum wage raise may have, some underlying drawbacks loom large. Lawmakers are attempting to address these issues in the process of drafting legislation to raise the minimum wage. The main argument against the raise is the fact that if labor markets are competitive, a minimum wage could cause unemployment because firms will demand less labor, and higher wages may encourage more workers to supply their labor. Another concern is that a raise can cause cost-push inflation. This is because firms face an increase in costs which are likely to be passed on to consumers. This is even more likely if wage differentials are maintained. Also, a minimum wage raise may encourage an increase in the number of people working on the black market so firms can avoid paying the legal minimum. All these problems among others are what lawmakers are trying to inform the public about. In this much-anticipated raise, there are significant disadvantages that should be addressed and perhaps a different, more wholesome way to tackle them should be introduced.

In my opinion, despite its immediate benefits, a simple minimum wage increase is not enough considering the increasing amount of concerns behind it. I believe that along with it there should be another legislation that will complement the minimum wage raise and perhaps tackle some of the inevitable impacts the raise will have on the economy, workforce and market. This would be to raise the Earned Income Tax Credit commonly referred to as EITC. This federal program benefits middle and low-income households. The credit equals a fixed percentage of earnings from the first dollar of earnings until it reaches its maximum. The maximum credit is paid until earnings reach a specified level, after which it declines with each additional dollar of income. Proponents of raising the Earned Income Tax Credit say that doing so would more effectively aid low-income families than raising the minimum wage. Some immediate benefits are that it is a policy that already exists, therefore it will require much less legislation work for it to be ready. Also, it is already doing a great job, the EITC lifted about 6.5 million people out of poverty, including about 3.3 million children in 2015. More than that, research shows that the EITC strengthens families, communities, and the country in a number of ways.

The benefits the EITC has for the workers are obvious. For a start, workers mainly use their tax credit to pay for necessities like groceries, transportation, medical expenses, rent, and utilities. The tax refund can also help workers build savings and establish financial stability. It can also provide a short-term safety net. Almost half of the taxpayers with children claimed the EITC at least once during an 18-year period, providing a source of temporary insurance and preventing entry into poverty. Also, research suggests the EITC improves health, with the most robust results for single mothers and children. Mothers experience health improvements through reduced stress. Among children, there is a decreased incidence of low birthweight and improvements in the home environment, nutrition, and educational and economic attainment. All these are several examples of how the EITC benefits workers.

For a policy to be effective, it should have significant positives for the employers. The way EITC is set up is to encourage and reward work. Therefore, employers will have a more productive and lively labor force. It also supports local jobs and businesses in several manners. To begin, EITC recipients are now able to spend more money thus creating more cash flow around them. With this increased spending, businesses in turn are able to grow and spend more in response, either delivering a better product, increasing their employees’ wages, or both. With a study from Columbia University indicating that the EITC is linked to increased life expectancy, this means that employers can expect healthier workers for a greater amount of active years in the workforce. With money moving around, a healthier workforce, and a happier society overall, employers should expect their businesses to thrive under the EITC legislation.

After satisfying both workers and employers, the raise in Earned Income Tax Credit does have a significant positive impact on the state. Firstly, it promotes further education in the way that it increases children’s educational performance and attainment. Children in families receiving the EITC score higher on tests and are likelier to graduate from high school, enroll in college, and earn more when they enter the workforce. In turn, it increases workforce participation and encourages low-wage workers to get additional education or training to boost their employability and earning power. The need for additional education by both children and workers increases the income of public state schools or universities. The fact that these people can now attain degrees aids the state significantly as both the intellectual and economic aspects of the society receive a boost.

There is, however, one objection that is commonly made since the EITC is a subsidy from taxpayers. However, since it is the public as voters insisting that incomes must be higher then it should be the public as taxpayers paying that higher bill. It is very easy to shout that everyone should be getting a living wage, especially if we then say that someone else has to be paying that living wage. It should be considered a rather more moral option that we sacrifice economically for the changes we push and believe in for our fellow members of society.

All in all, the debate on minimum wage will continue to hold the utmost importance in today’s society. There are several arguments to be made for either side, and it becomes a multi-faceted discussion if you mix in all the alternative solutions that exist. In my opinion, the advantages of raising the minimum wage slightly outweigh the disadvantages, but the already existing policy of the Earned Income Tax Credit trumps the rest of its alternatives. With its obvious benefits to all aspects of the economy, it is a safer and perhaps smarter approach to dealing with poverty. The benefits it provides to workers cover several areas including welfare, education, and health. Employers can expect a more productive and more skilled workforce, while the state can stand to benefit from the increased flow of the economy in places such as public schools. There is no doubt that something needs to be done. By postponing or not supporting policies such as these and being conservative, people fall into the trap of politicians where words are being exchanged at a great rate but no action is taken. For this reason, I believe the EITC policy has shown enough evidence and shows significant potential through respected research that it should be adopted immediately by any state that aims to reap the benefits of a reenergized, healthier and happier society.

Sources:

1. http://www.taxcreditsforworkersandfamilies.org/news/eitc-linked-increases-life-expectancy-among-low-income-americans/
2. https://www.theatlantic.com/business/archive/2018/01/eitc-getting-people-to-work/549416/
3. https://www.forbes.com/sites/timworstall/2016/07/07/dont-raise-the-minimum-wage-and-kill-jobs-increase-the-eitc-instead/#5c5d48d660df
4. https://www.healthaffairs.org/do/10.1377/hpb20180817.769687/full/
5. https://www.chicagotribune.com/business/careers/ct-biz-0317-work-advice-huppke-20140317-column.html
6. https://www.vox.com/2019/5/8/18528098/national-federal-minimum-wage-fight-for-15

Everyone believes that America is the place where all your misery and issues disappear, however in America there a more people in poverty than rich people. We often describe New York as a place where many wealthy people live, due to the fact of expensive rent prices, big corporations, and outstanding education. Due to this stereotypical stereotype, people that live in poverty are often looked down upon or not even cared about. Society often talks about the wealthy but never talks about the poor because our society only cares about money since New York is known for having the best lawyers, and accountants and is the most expensive place to live. Although New York is expensive we do not often talk about the working class. Minimum wage is a big issue across America that has not been spoken much about due to society always focusing on the wealthy and not the working class. How are New Yorkers in a position to overcome poverty even with a raised minimum wage?

The Newsletter Eater New York published a report on “Restaurateurs Are Scrambling to Cut Service and Raise Prices After Minimum Wage Hike” (Some companies are looking to nix more than half a million dollars from costs in order to budget) by M.Tara Crowl the author describes how raising the minimum wage was not a successful idea. According to Crowl “Now, across the city, restaurant owners and operators are reworking their budgets and operations to come up with those extra funds. Some restaurants, like Rosa Mexicano, are changing schedules. Other restaurateurs are cutting hours and staffers, raising menu prices, and otherwise nixing costs wherever they can.” According to the author’s perspective raising the minimum wage was not a good idea because restaurants needed to find better ways to make a profit. For companies and restaurants to overcome this issue they had to inflate prices, fire employees, and limit the number of hours an employee could work, in order to gain back the interest, they lost. According to Crowl “The bottom line is, we have to reduce the number of hours we spend,” says Westcott. “And unfortunately, that means that, in many cases, employees are earning less even though they’re making more.” This quote mentions that although minimum wage has increased it did not actually quite benefit the working class because by inflate the amount a person earns results in restaurants and companies losing profit, and in order to gain that interest back they have to cut back the number of hours an employee can work. Although 15 dollars an hour may seem like a good idea it’s hurting the consumer, because having fewer hours at work means your earning less money. “Restaurateurs Are Scrambling to Cut Service and Raise Prices After Minimum Wage Hike” is a newsletter that can be used for research questions on How are New Yorkers in a position to overcome poverty even with a raised minimum wage. This newsletter displays how before the minimum wage price increase employees were able to work long hours and enjoy their job after raising the minimum wage employees often got fewer hours of work and did not quite enjoy their job. Increasing the amount, a person earns affected the work environment dramatically because according to the article it states “Every afternoon at 4 p.m., each of Rosa Mexicano’s four Manhattan locations used to have a pre-shift staff meeting. That meeting created a really nice family atmosphere,” says Chris Westcott, Rosa Mexicano’s president, and CEO. It created energy and synergy, and people were pumped going into the shift.” But as of last month, the meeting doesn’t happen anymore. Now, start times for shifts are staggered through the evening, and employees receive a document with the day’s updates when they arrive” This quote demonstrates that raising the minimum wage it destroyed the restaurant’s bond with its workers. From the restaurant’s perspective, they use to have a great bond with their workers and were like a family after an increase in raise the bond disappeared because corporations needed better ways of earning profit back.

The New York Times published a newsletter called “A $15 Minimum Wage Seemed Impossible. Now It’s Reality for a Million New Yorkers.” by Patrick McGeehan the authors describe that the biggest issue about raising the minimum wage is that everything in our economy will increase. By this, he means that food, clothes, supplies, etc. For corporations to overcome this issue of the extra money they need to spend to pay their workers, the consumer must pay extra for the product or service they want, to balance the profit the company lost. According to McGeehan increasing the amount a person earned was very beneficial to Rosa Rivera because in the newsletter it states “When I get my first check with $15, I’m going to be so happy”. said Ms. Rivera, an immigrant from El Salvador with three children. She said she was proud to pay her rent and help support her grandchildren without federal benefits”. This excerpt is explaining how raising the minimum wage helped Ms. Rivera because now she was able to pay her own rent and support her grandchildren before that she just earned $5.15 an hour and relied on government assistance to pay her rent when she started working at a McDonald’s in Manhattan 18 years ago. By raising the minimum wage helped Ms. Rivera overcome poverty because now she no longer needed government assistance to help pay her rent.

In the scholarly source “ Minimum Wage and poverty” by Addison T. John and Blackburn L. McKinley the authors explain how raising the minimum wage will help the economy, however by increasing the minimum wage lead to a reduction of employees having jobs and working fewer hours when they use to do when the wage was lower. The scholarly source explains how increasing the minimum wage can be beneficial to some but not all because it depends on the family income and who will be able to keep their job after the policy comes into effect. According to Addison and Blackburn “ They regressed the change in a state’s poverty rate from 1989 to 1991 on the fraction of the state’s labor force (in 1989) that should have been affected by the federal minimum wage increases in 1990 and 1991, that is, the fraction in 1989 below the level of the 1991 minimum wage (396)”. This quote is explaining how not much is known about poverty because not much information is conducted on the poor, The quote also explains how if more workers are getting fired from their jobs and are unable to support their family can result in a higher increase of people living in poverty “ Minimum Wage and poverty” is a scholarly source that is connected to my research question on How are New Yorkers in a position to overcome poverty even with a raised minimum wage. This scholarly source displays how raising the minimum wage may seem like a good idea however the outcome was very brutal as well. It resulted in workers getting paid more however they were unable to work if they did before because the company needed to find ways to cut back costs in order to gain the profit back.

In the scholarly source “How Effective Is the Minimum Wage at Supporting the Poor? by Macurdy Thomas the author describes how the main purpose of raising the minimum wage will increase the incomes of poor families, and second, the minimum wage imposes little or no public or social costs. This is connected to poverty because by raising the minimum there should be fewer people in poverty however that is not the case, due to unaffordable housing many people are forced into living on the streets or living in poor communities due to not being able to earn a lot at work or is currently unemployed. According to Macurdy “Policies that raise the wages of these workers to increase their earnings and contribute to their escaping poverty. As a counterbalance to this impact, opponents of the minimum wage argue that wage regulation causes some low-wage workers to lose their jobs and they will suffer income drops. The issue, then, becomes a trade-off: some low-income breadwinners will gain, and others will lose. Promoters of the minimum wage retort that employment losses are quite small, and consequently, the workers who gain far exceed those who lose (498)”. This quote is explaining how the purpose of raising the minimum wage was to help the people in the lower class however that did not go quite as planned some workers resulted in being unemployed and others resulted in working lesser shifts. Although it may seem like a good idea it’s hurting the employee more because having higher pay means fewer hours to work and by having fewer hours at work means less money. Having a lower minimum wage means that the worker can work longer hours and earn more money and still have a job. “How Effective Is the Minimum Wage at Supporting the Poor” is a scholarly source that is connected to my research question How are New Yorkers in a position to overcome poverty even with a raised minimum wage? This scholarly source displays how people on the minimum wage are often teenagers, single parents, or people that are unable to find a stable job because no one will hire them because corporations are trying to make a profit thus, they must live in poverty.

The scholarly source “The Minimum Wage and the Poor: The End of a Relationship” by Burkhauser V. Richard and Finegan T. Aldrich describes how the main purpose of raising the minimum wage was to help people in poverty however most low-wage workers are currently living above the poverty line. Meaning although the minimum wage has increased only 11 percent of the population living in poverty will benefit. According to Aldrich and Richard “But about one-half of the rise in the fraction of low-wage workers with household incomes at least three times the poverty line is due to this general rise in real living standards (Pg. 60)”. This quote explains although with a raised minimum wage some workers are still forced to live in poverty due to high rent prices and their standard of living. From the author’s perspective “families. Today, whether a family headed by a low-wage worker falls above or below the poverty line depends much less on how much he or she earns per hour than on how many hours are worked, how large the family must be supported, and, most importantly, how much other family members (pg. 60)”. This quote is explaining how there are most factors needed in order to for a person in poverty to understand. If a person had a job but was not able to work the number of hours needed to support their family or themselves is also a big issue. Another major factor that can lead to poverty is the number of people you are trying to support, the bigger the family the harder it will be to overcome poverty. This scholarly source is connected to my research question because it demonstrates how even with a raised minimum wage there will still be some families living in poverty because it depends on certain factors such as the number of hours a person works, the number of people in a family and if that person is able to keep their job.

Poverty is a major issue throughout America even with a raised minimum wage. Although a person earns more than before there are still major factors that prevent that person from living peacefully such as high rent, expensive clothes, and food, and the number of hours a person can work at their job, or it can also be due to unemployment.

Minimum wages are meant to help workers and prevent business from exploiting employees. One thing I learned from minimum wage is raising minimum wage can do a lot more than putting money in the back pocket of hard workers it can help workers in many ways such as paying bills in time and other stuff from minimum wage rising can change the life of many people’s life.

There are many types of minimum wage laws that set forth the lowest hourly wage an employer may get paid or how the employee performs work gets paid.

Although minimum wage laws are fairly comprehensive in many coverages must provide exemptions. From Looking at many articles and looking at how society really is we learned that about a bill increasing the current minimum wage is greatly needed, and our government officials should demand a raise due to the increase in the cost of living as if it isn’t any longer realistic. One thing we learned is we need higher paying wages for all, middle- and lower-class income levels. Without some sort of help and support from our government, the economy will only get worse for many middle- and lower-class people. Students without getting the money they need for the minimum income they will not be able to afford the cost of school and living. Not only students won’t be able to afford things, but also single-family households will not be able to support themselves. Some argue that if an increase in minimum wage is passed businesses will raise the prices of goods and services to help compensate the cost of pay raises. Well, the cost of goods and services is already on an increase due to the high cost of many things such as gas-oil, and yet we are still getting paid the same price as we see in this society.

One thing we learned in this world is that many people are having to cut spending in other areas so that they can pay bills, and feed their families, which in turn is hurting the economy because people do not have the extra money to buy extra things like they need to enjoy themselves like, going out to the movies, or going out to eat at Chili’s. But because of minimum wage, many people are opting to stay home, watch cable and cook from home. If a minimum wage was an increased the economy will improve, people will have more money to spend, and the morale among low-income workers will improve. More people will seek jobs, which will help the unemployment percent decrease. People also argue that the minimum wage jobs are for teenagers, so that they can earn money to help cover the cost of school, and if a minimum wage is not for school, then who is minimum wage really for if it’s not for students. With the increase of minimum wage is can help many people, but many companies would also not higher more people because of the minimum wage increasing they will lose a lot of money on how many people they higher.

So, what do I think about minimum wage? I feel like it should just stay the same because if it stays the same not a lot of people would be jobless and a lot of people will still have a job and will be getting paid the same amount of money that’s not low or high but just in the middle.

Wages, typically known as salary, play a great role of significance in the lives of employees employers, and economies around the globe. Within different economies, it can be easily seen that even the workers who get the lowest salary have a fixed salary that cannot be reduced than that this can be simplified in two words- minimum wage. The concept of minimum wage is quite simple as it describes the lowest wage any company or employer can give to any type of employee. The USA follows a national minimum wage of $7.25 per hour. It was $0.25 per hour when started by FLSA in the year 1938 under President Franklin D. Roosevelt. Apart from USA united kingdom started the minimum wage low in 1909 Davis-Bacon act in the united states became an issue as it basically stood for discrimination between white and black workers moving further minimum wage has certain pros and cons it leads to better employee satisfaction moreover it may help in the reduction of poverty, on the other hand, it can cause job loss to many employees in this way minimum wage impacts employment as well as inflation let us go through its impact on employment and inflation respectively.

The minimum wage is one of the leading factors that affect employment through different aspects. These effects can be either negative or positive and normal or abnormal. However, they somehow affect the economies and lives of those related to them. To cite an example, had national legislation for minimum wages in 1999. The main purpose was to increase the minimum wages for all types of workers. Many studies found that the best thing was that everything was almost positive. Almost every worker in the labor market was happy with the legislation as it provided them with a better standard of living. This is because the act provided workers with equal wages. So, the belief in inequality started disappearing. The workers, especially the low-income workers, saw themselves living with better social facilities. Even though the majority of workers were happy, part-time workers faced certain negative effects and lost their jobs. Another major topic in this series is regarding formal and informal sector workers. The formal sector refers to the major sector that stands for the rest of the works. When the minimum wage is increased for the formal sector, it can lead to a major reduction in poverty. This can especially help low-income homes where only one person earns for the whole family. This would give the whole family a better standard and facilities for their lives. This all can be done by increasing the rate of minimum wages. Moving to the next side of the coin, if the act of increasing the minimum wage fails to cover each and every part for implementation, it can lead to failure and may have a negative effect. In Addition to this, with higher minimum wages, employers may try to reduce the strength of workers leading to a great rate of loss of jobs.

Furthermore, another thing we have to discuss with regard to minimum wages which is inflation. The first thing to note is that with raised minimum wages, the prices of goods, as well as services, would also get raised eventually. In addition to prices, there is a great difference between the effects of large raises in the minimum wages and small or minor raises in the minimum wages. Large raise basically results in an increase in the rate of inflation. Whereas, small raise may even reduce inflation on a small scale, as per some studies. There is a report prepared by researchers MacDonald and Nilsson which states that the food prices in restaurants from the year 1978 to 2015 had very little raise in their prices. The rise was just 0.36% and that for every 10% increase in the minimum wages of the employees. In the USA, the time around the 1940s to 1960s saw a period where the minimum wages increased as well as the productivity in the economy and the rate of inflation as well. In 1968, minimum wages stopped increasing though. So, the purchasing power of the minimum wage has kept declining since 1968. In 2009, it was $8.70 which is 17% less than that in 1968. Moreover, today it is 31% less than in 1968 with its rate at $7.25. It was $10.54 in 1968. There is another report from the Congressional Budget Office (CBO) which basically states that if we go with the minimum wage at $15 per hour, there is an estimation of around 1.4 million loss of jobs by the year 2025. This report was criticized by Mr. Arindrajit Dube from Massachusetts University. He stated that CBO has taken the number of job losses to a great extent. The rate of job loss would be just 5 lakhs or less than that. This has been supported by Dr. Daniel Kuehn, who is a researcher at The Urban Institute. As per him, minimum wages, if raised, may affect prices but that would be like nothing. Therefore, there are always debates regarding that. Does this also raise a major question would only raising the minimum wage to increase help workers survive in inflation? Simply because if minimum wages increase with inflation side by side, money would grow with the same purchasing power. On the other hand, if it grows with productivity in developing economies, the workers surviving on minimum wages have a chance to get better over time.

To conclude, minimum wages are closely associated with employment and inflation too. There are certain facts, theories, studies, and figures to make clear our minds regarding the rate of minimum wages in different countries and economies. There are a few pros and cons with regard to that. In the last, it makes us think broadly and makes me reach the fact that if thing is within the limit, it is all good. At the perfect rate, we can make out much more benefits and fewer disadvantages from minimum wages, and that too with keeping employment and inflation level in mind.

The United States has varied opinions on the question of the minimum wage at both federal and state levels. Legislatures and workers are all keen on the decade-long quest to have wages raised. Significant amounts of workers prefer wages as high as $15 per hour (twice the wage floor of $7.5 per hour). Such a wage floor help regulate the labor market, giving workers and employers a fairground for operation. Without a minimum wage, employers may take advantage of employees, leading to high rates of unemployment and a high labor surplus. A deviation in the minimum wage affects American households and firms at such microeconomic levels as disposable income and employment decisions.

Minimum wages affect the business’s ability to negotiate wages for its employees. When the government through the influence of labor unions solicits for minimum wage increases, businesses are at a loss over the wages to pay their employees. They are forced to increase the minimum wage to a new price floor, thus increasing the expenses of the business. Employers or business owners, therefore, have to choose between letting go of some workers or paying all the workers at the new rate and facing the risk of a loss. Employers, therefore, have a say in the setting of the minimum wage by ensuring that the new wages set do not lower their economic profits. Since most of the businesses in the United States operate in free markets, they are price takers, and therefore labor wages are a great way of manipulating their profits. It is through such variable costs as labor that they can increase the profit of the business. Businesses that employ unskilled labor, given a minimum wage law, experience diminishing profits and increasing expenses that challenge their economic growth. A sensible move for such an employer is to employ skilled labor that maximizes the quality of output and increases the sales revenue of the business.

The minimum wage has been a contested topic across the United States, given the one-size-fits-all mandate of the $7.5 per hour minimum wage. The different states within the United States have varying costs of living that need to be considered when setting the minimum wage. Urban and coast-bound states tend to have high costs of living as opposed to the Midwestern states. Increasing the minimum wage within such states, therefore, gives the locals more disposable income to sustain the high costs of living within these regions. For example, the cost of living in Iowa and New York. New Yorkers are bound to spend more on food, rent, and healthcare as opposed to Iowans. The United States, therefore, needs an increase in the minimum wage with consideration of the cost of living within each state. A common minimum wage floor for all states may put more money into the pockets of one household while burdening another household under a similar firm. The wages should, therefore, vary depending on the state across the industries.

The minimum wage should be high enough to allow workers to support their families. Some individuals earning minimum wages sometimes have to resort to food stamps as they lack the extra cash for eating out or for huge emergencies. A stretched wage is essential to allow workers to afford a quality lifestyle, save, and even invest. An increased investment plan increases the discretionary income of the firms and households.

Summing up, increasing the minimum wage benefits the majority of low-income workers in both the short and long term. In the short term, they have an increased disposable income, while in the long run, they have more than enough to pay taxes, meet their needs, and have enough to save.

Poverty is defined as the state of being poor. However, poverty is also defined in relative and absolute terms. Relative poverty is poverty about the economic status or well-being of others; you’re poor if you live under standards that aren’t in the context of how society views a ‘rich’ person. Absolute poverty is the failure to meet basic needs such as food, clothing, and shelter based off of money needs. [endnoteRef:1] Poverty is an outcome of the Racial Wealth Gap. The Racial Wealth Gap has plagued Americans for decades. The beginning of this gap began as early as the 1900s and still appears in our communities today. The gap is defined by the median wealth of a white family versus a black family, net worth. The family’s net worth is determined by adding total assets (cash, retirement accounts, home, etc.) and subtracting liabilities (credit card debt, student loans, mortgage, etc.).[endnoteRef:2] Sadly, with poverty, there come many more negative outcomes. Living in poverty increases poor health, higher crime rates, and a decrease in education. That’s poverty all over the world. [1: https://www.habitat.org/stories/what-is-poverty dtd 26 MAY 2019 Habitat for Humanity is a non-profit organization that builds and improves homes for families to call theirs. For communities to be strong and stable, families must be able to afford to live. This website provides readers with stories, donation links, about me, and so forth.] [2: https://www.forbes.com/sites/brianthompson1/2018/02/18/the-racial-wealth-gap-addressing-americas-most-pressing-epidemic/#4d4d7d6d7a48 dtd 21 MAY 2019 An article submitted that explains why races differ in terms of wealth. I learned what wealth truly means and not the societal definition.]

In the state of Texas, starting in the year 2017, a Hispanic or black child is three times more likely than a white child to live in poverty. The U.S. Census Bureau put the poverty rate down at 14.7% which is lower than the 2011 percentage of 18.5%. Also, 1 in 5 (20.9%) Texas children lived in poverty which took a decline in 2011 when 27% of Texas children were poor. Metro areas in South Texas and predominately Hispanic communities have been ranked the poorest areas within the state of Texas and the highest areas of child poverty. In the year 2017, the Texas median household income sparked up 5%, or $59,206. Texas falls behind 22 other states with them having higher median incomes. Women in 2017 had to work a full-time job, year-round just to be paid 81.4% of what a man would be making on his job.[endnoteRef:3] In 2018, Texas’s population was 27,676,343 and of that population, 4,076,905 are living in poverty. 14.7% of people had incomes below the poverty line in 2017 and 20.7% of children under age 18 lived in families with incomes below the poverty line in 2017. 20.7% Latino, 9.0% African American 17.9% Native American, 13.9% White, and 9.8% Asian Americans living in poverty. [endnoteRef:4] In Texas, the minimum wage is $7.25 per hour, which barely provides for one person, let alone an entire family. Between the years 2016 and 2017, the average total of workers in Texas who were earning at or below the federal minimum wage declined from 3.9% to 3.1%. The percentage of workers earning exactly the federal minimum wage decreased to 1.2% from 1.6%. Lastly, the percentage earning less than minimum wage decreased to 1.9%. Of the working class in Texas earning at or less than minimum wage, 56.5% were women and 43.4% were male. [endnoteRef:5] [3: https://www.texastribune.org/2018/09/13/texas-poverty-census-2017-lowest-levels-decade/ dtd 21 MAY 2019 A Texas article which provides statistics of poverty. Although 2017 has been proven to be a year of improvement for Texas, poverty was still a down factor. This site provides charts from the U.S. Census Bureau to provide a visual to represent poverty in numbers. ] [4: https://talkpoverty.org/state-year-report/texas-2018-report/ dtd 21MAY2019 Great website for statistics. This site provided me with a population of Texas in the year 2018. Also, this website provides me with percentages for different categories and rankings between states. ] [5: https://www.bls.gov/regions/southwest/news-release/minimumwageworkers_texas.htm dtd 26 MAY 2019 Bureau of Labor Statistics talks about minimum wage in Texas and percentage change of people making at or below minimum wage. Also, this page provides charts to back the information provided.]

Many low-income individuals and families live in public housing and receive SNAP benefits, Medicaid Health Benefits, Children’s Health Insurance Program (CHIP), Welfare, and many other government assistance programs.[endnoteRef:6] However, some individuals aren’t eligible for these programs. Everyone has heard of food banks and food pantries which provide meals to families. Also, there’s the U.S. Department of Housing and Urban Development which gives federal aid to housing agencies within states. These housing agencies provide housing to low-income families at affordable prices.[endnoteRef:7] These homes come with child protection, cleaning, and property maintenance regulated by the government and security precautions. I plan on starting a program that provides housing and meal packages for families. The housing portion of my project would persist in an apartment-like complex or duplex homes. Families will be able to experience the full feeling of having all the amenities that a regular home would have. The food portion would consist of a delivery system. At the beginning of every month, each family will receive a package based on the number of members in the family. The family food package will consist of a variety of dinner foods, drinks, snacks, and condiments. This will allow the adults to get themselves back on their own feet and eventually be able to provide for their families in ways they wish they could. [6: https://www.usa.gov/benefits dtd 26 MAY 2019 USA.Gov provides information on government benefits available to the people. On this website, you’ll find different food, healthcare, housing, and financial assistance benefits that you’re eligible to apply for. Lastly, there is a link to find out the requirements for each program. This is great for people who need assistance. ] [7: https://www.hud.gov/program_offices/public_indian_housing/programs/ph dtd 21 MAY 2019 HUG.GOV explains what public housing is. Also, it breaks down the different sections available to an individual.]

To make this project a reality I would like to partner up with Feeding Texas and Volunteers of America as my private sector. I would like to partner up with the Texas Department of Housing and Community Affairs as my public sector. For starters, I intend for each of my partners to fulfill things of the nature that pertain to their organization. I intend to Feeding Texas to help families build a foundation to move toward food security. Within the last year, Feeding Texas fed roughly 500 million pounds of food to families of local communities.[endnoteRef:8] Next, I’d like for Volunteers of America to help me provide housing. Housing will be provided in all areas, which will allow residents to find jobs. Volunteers of America has committed to providing more than 40 housing communities all over the state of Texas and Albuquerque, NM.[endnoteRef:9] Lastly, TDHCA because it is the state agency responsible for affordable housing. TDHCA delivers $2 billion through profit organizations, non-profit organizations, and local government partnerships to provide housing, opportunities, and assistance. [endnoteRef:10] These partners would make the ultimate dream team to defeat poverty. The goal of my organization would be to slowly, but surely rid cities of poverty over time. The main focus would be to continue being consistent with the homes. Once the organization is off to a great start, my volunteers along with myself will continue to keep the housing up to par and accept critiques to better our organization. [8: https://www.feedingtexas.org/work/ dtd 26 MAY 2019 Feeding Texas is a non-profit food bank that provides food all over Texas. Their website provides ways to get involved, about them, latest works, teaching about hunger, and a way to donate.] [9: https://www.voatx.org/affordable-housing dtd 26 MAY 2019 VOA was a great source of housing. The website is straight to the point. Provides its mission, contact information, etc.] [10: https://www.tdhca.state.tx.us/au.htm dtd 26 MAY 2019]

However, during this journey, we will face many obstacles. For me to be able to build a house and provide food to families, the facilities must pass all inspections. For starters, the home must pass the Texas Real Estate Inspector inspection. This inspection will be checking the plumbing, condition of the yard, the interior and exterior of the home, and miscellaneous objects; smoke and carbon monoxide detector, heater/AC unit, and stair handrails. To stay on top of these major tasks, we will plan organize, and schedule days and times dedicated to each area to guarantee that the home is at an acceptable standing for the home inspection[endnoteRef:11] Next, to supply food to a family all volunteers must have a food handling certificate to give food. The facility in which we operate must pass inspection by local food inspection agencies. Therefore, the facility must have storage for foods at the correct temperatures, correct packaging, and a contamination-free environment. Lastly, all transportation must pass state inspection for food drop-off to be a success. To ensure that all aspects of this organization will be met, further research will be done to learn the rules and regulations to run this non-profit and make a change. [11: I found this information to be new to me and useful. I learned that TDHCA is what takes on the responsibility for affordable housing in Texas. It’s reliable because it provides readers with its history, therefore, we know it’s official and not someone who just up and made an agency. https://www.trec.texas.gov/become-licensed/inspector dtd 27 MAY 2019 This website provides me with what to expect if I ever wanted to sell my home or run a housing facility.]

In conclusion, as the state of Texas continues to change drastically, poverty changes alongside it. As our population grows, the percentage of individuals living in poverty changes, however, the physical being of poverty doesn’t. I’d like to study poverty to the root. What makes poverty a burden on a specific race? What makes a specific area more prone to poverty-ridden individuals than others? How does hourly pay change depending on job title, education, or work experience? These are all things that would make great research in terms of poverty in Texas.

[iChart 1. Percentage of hourly-paid wage and salary workers with earnings at or below the prevailing federal minimum wage in Texas, annual averages, 2007-2017] https://www.bls.gov/regions/southwest/news-release/minimumwageworkers_texas.htm dtd 12 MAY 2019 NOTE: This infographic shows the average wages an individual earns in Texas. This is proof of how hard making a living for themselves in Texas. As a working teen, a full-time college student who pays her car note and phone bill, making $7.25 per hour and getting paid biweekly barely gets me by. I never realized how little that pay gets anyone by until I was living that life. However, I now see why it’s important to have an education, the higher the education, the more money that goes into your pocket.