Hey guys! this article is a little bit long but very interesting. Its about the ongoing debate about whether or not minimum wage should be increased.
http://www.nytimes.com/2014/04/03/us/politics/president-heads-to-michigan-to-press-minimum-wage-increase.html
What do you think about the issue? Do you favor and increase in minimum wage? what are you worries, hopes and predictions of the outcome?
I think this is definitely a complex issue. On one hand we have people working full time that are still unable to support themselves. We also have businesses that are unable to raise the wages of their employees. I personally think that businesses can readjust the salaries of CEO's and high level executives to compensate their lower level workers and give them livable wages.
ReplyDeleteThere isn't really a clear answer here. I wish that all the workers in America could be paid a wage that they could comfortably live with. However, businesses are still looking to make a profit and would probably not want to raise wages. Maybe a good way to solve this problem is by elevating the entire nation's well being so that even the lowest paid workers still afford a comfortable lifestyle.
ReplyDeleteI am one of those who believes the minimum wage should be abolished for multiple reasons. I'll give one reason, which is based on my personal experience: Minimum wage gives offers poor incentives to employees and does not fully reward hard work. For example, I worked as a lifeguard (requires 50 hours of training) and was paid minimum wage. After two years of hard work, I was promoted to supervisor and still got paid minimum wage. Why? Because the aquatic office was paying minimum wage to lower level aquatic employees as well and couldn't afford to offer me a raise. As a result, I moved on to another job since I knew that if I worked harder and got another promotion, I would still be paid minimum wage. If minimum wage didn't exist, lower level employees would be paid less than lifeguards and supervisors. As a result, an incentive is offered to all employees stating that if you work hard, you'll get a promotion along with a pay raise.
ReplyDeleteThe problem with minimum wage is that it tells minimum wage employees that as long as you have a job regardless of your skills, you'll be able to live off your wage, discouraging them from developing their skills. If minimum wage disappeared, those same employees would be encouraged to improve their productivity by receiving higher education or working harder. Minimum wage is simply an anti-free market policy.
You can look at the minimum wage debate through many different lenses. At the very micro level, Tyler's concerns are valid. Setting a minimum wage may erode the link between wages and productivity for certain types of jobs. At a more macro level, the issue becomes whether people can actually survive on minimum wages. At an even higher macro level, we think about the impacts of minimum wages on overall employment in the economy. And at an international level, we think about comparative wages for low skill jobs. All of this makes the subject very difficult.
ReplyDeleteHere is where I come down. Walmart is the country's biggest employer. They pay as close to minimum wage as they can. Their employees need to use federal benefits for food and insurance. Walmart tries to keep their workers part time to minimize added benefits. So, if you work at Walmart, chances are that you are living very close to the poverty line. I think a higher minimum wage doesn't solve the problem but it makes it more likely that American workers will make decent wages.
I like the idea of a wage increase however, there will be implications to having it done. Some of my concern stems from how it will affect the global market and the rate at which currency exchanges hands. Wage increase just seems like a huge step into the unknown which is not always good.
ReplyDeleteI thus far support having a minimum wage, yet I struggle with "what the right amount should be." To quantify the impacts of the proposed $10.10 minimum wage, the Congressional Budget Office reported that this would (1) raise wages for 16.5 million workers, lifting 900,000 above the poverty line WHILE (2) reducing the number of jobs by 500,000. This is a dilemma on its own, not to mention that no one knows for sure whether these numbers truly reflect the actual impacts.
ReplyDeletehttp://articles.chicagotribune.com/2014-02-24/business/ct-biz-0224-work-advice-huppke-20140224_1_minimum-wage-job-killer-cbo
ReplyDeleteI will make two points for and against MinWage:
- I do not think MinWage discourages people to work hard because one can barely make ends meet at $7.4/hr especially if s/he is raising a family. I agree that it was not fair for Tyler to be paid a MinWage even after a promotion. However, the fact that Tyler left the job to find opportunities that could compensate him better IS an example of a person striving to move on in life despite already having the MinWage. Think property right- it assures that a house is protected at all time so that the house's owner can leave home to participate in economic activities. MinWage, similarly, assures that one can afford minimal needs in order to live and seek better opportunities.
- Opponents of MinWage argue that this policy worsens employment discrimination. People with low levels of skills will not be able to find jobs because employers will only hire candidates whose skills deserve the MinWage and unable to hire others at a lower wage range. Thus MinWage can KILL jobs. Additionally, people of color could be faced with more discrimination when they compete for the same low-wage positions with white applicants. However, I don't think the last point was valid- we need better solutions to address racism rather than subtly endorsing the status quo: without MinWage, more people of color will be hired, yet at a lower wage than white peers.
minimum wage does, to a larger extent, protect workers from exploitation. if companies, such as Walmart, are allowed to determine wages for their workers, the wage will be much lower than the current minimum wage, which will not be enough for those workers to afford basic necessities. however, a higher minimum wage will have a negative impact on employment. corporations seek to maximize profits at very low costs. as a result, many manufacturing companies in the U.S have been relocating their production assemblies to countries such as China.
ReplyDeleteWith Ly's concern that it is difficult to determine the correct minimum wage levels, the government doesn't have a sufficient amount of information to determine the proper level. Politics always affects the minimum wage, which is a bad thing in most cases. On the other hand, the institution that has all the necessary information is the market. I believe the institution that has the proper amount of information should control the "minimum wage." Therefore, abolishing minimum wage gives the market control over "minimum wage."
ReplyDeleteA great example of a successful company that pays above minimum wage is Costco. Costco is a company that uses free market methods to attract employees and increase profit. Here is a great article about the success of Costco compared to Wal-Mart and Sam's Club: http://atlasleft.org/low-wages-not-the-only-way-for-welfare-queen-walmart-to-stay-profitable/
Another way to support Ly's point about how MW kills jobs is to look at the unemployment rates of countries that lack a minimum wage. In Thomas Sowell's Basic Economics, he points out that two economies that didn't have minimum wages, Switzerland and Singapore, experienced an unemployment rate of less than 1% at various points in their economic history. Here's the article: http://www.nationalreview.com/article/369072/facing-minimum-wage-truth-thomas-sowell
ReplyDeleteI like the Costco's example. Although it is doubtful that Walmart will pay a higher wage without being pressured in some way. I agree with Dorothy on this point.
ReplyDeleteSwitzerland and Singapore are two rich and successful countries, whose economies and regulation systems are quite different from the US to make a MinWage comparison valid.
- Switzerland, like other Nordic countries, has a strong labor union, which helps enforce maximum work hours and benefits to employees. The US does not do this particularly well.The social insurance program in Switzerland is known to be different and much more effective than those of the US and other European countries. When the systems are different, it's hard to compare the efficiency of a single element like MinWage.
- In Singapore, I saw no beggars - it's illegal to be a beggar here. Poor people usually go sell napkins to those eating on the streets. Many vendors do not provide napkins due to governmental regulation. Would the US go this far to eliminate poverty and unemployment? Singapore does not have MinWage may be due to the fact that they have already regulated other aspects of the market carefully (as in the eg above). The Singaporean gov't has a rather paternalistic approach that is likely to bother the sense of individualism and independence shared among many Americans.
I do think resolving social issues must start from the system. MinWage may be applicable in one society but not another, depending on the system we are looking at.These are my last thoughts, I will move on to discuss other topics :D