Economy
Raising the Minimum Wage or Not
Nowadays, many people focus on the minimum wage and there are two attitudes about raising the minimum wage. Some people support to raise the minimum wage because they think it can help employees to get higher wages. Others point out that raising the minimum wage will hurt both individuals and the whole society. Generally, there are both advantages and disadvantages of raising the minimum wage. In my opinion, the disadvantages of raising the minimum wage are more than advantages.
There are some advantages of raising the minimum wage. For instance, workers can have a better income and more people will be willing to work as firms raise the salary. In this case, raising the minimum wage seems like a good policy to against poverty.
However, as Romer (2013) points out: “When the minimum wage rises, is income redistributed primarily to poor families, or do many families higher up the income ladder benefit as well?” If we dig deeper, we will easily find out that situation becomes more complex by raising the minimum wage. First, as the minimum wage gets higher, more people are attracted to find a job, which poses a fierce competition. As a result, some low-income people who are supposed to get higher wages will lose their jobs because some efficient workers substitute them. Another reason why raising the minimum wage harm individuals is that the cost of a higher minimum wage will pass along to customers. In other words, we need to pay more to get the same goods and services, so some low-income families have to use their higher wages to pay for a much higher price, which leads to their situations being worse than before. All of above are some disadvantages for individuals if the U.S government raises the minimum wage. Raising the minimum wage also has some bad influences to the whole economy. Based on what I learned in microeconomic class, a minimum wage is known as the price floor. The price floor will cause an excess supply and fail to
Nowadays, many people focus on the minimum wage and there are two attitudes about raising the minimum wage. Some people support to raise the minimum wage because they think it can help employees to get higher wages. Others point out that raising the minimum wage will hurt both individuals and the whole society. Generally, there are both advantages and disadvantages of raising the minimum wage. In my opinion, the disadvantages of raising the minimum wage are more than advantages.
There are some advantages of raising the minimum wage. For instance, workers can have a better income and more people will be willing to work as firms raise the salary. In this case, raising the minimum wage seems like a good policy to against poverty.
However, as Romer (2013) points out: “When the minimum wage rises, is income redistributed primarily to poor families, or do many families higher up the income ladder benefit as well?” If we dig deeper, we will easily find out that situation becomes more complex by raising the minimum wage. First, as the minimum wage gets higher, more people are attracted to find a job, which poses a fierce competition. As a result, some low-income people who are supposed to get higher wages will lose their jobs because some efficient workers substitute them. Another reason why raising the minimum wage harm individuals is that the cost of a higher minimum wage will pass along to customers. In other words, we need to pay more to get the same goods and services, so some low-income families have to use their higher wages to pay for a much higher price, which leads to their situations being worse than before. All of above are some disadvantages for individuals if the U.S government raises the minimum wage. Raising the minimum wage also has some bad influences to the whole economy. Based on what I learned in microeconomic class, a minimum wage is known as the price floor. The price floor will cause an excess supply and fail to
References: Romer, C. D. (2013, March 2). The Minimum Wage, Employment and Income Distribution - NYTimes.com. The New York Times - Breaking News, World News & Multimedia. Retrieved March 4, 2013, from http://www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?src=xps&_r=0 Robent.H, F., & Bens, B. (2012). Efficiency, Exchange, and the Invisible Hand in Action. Principles of Microeconomics (p. 174). Pembroke: University of North Carolina at Pembroke.