Should Minimum Wage Be Increased?
According to the reference (Issues Surrounding the Minimum Wage Debate REVISION 2- Bruce D. Philips,NFIB Research Foundation, 11/30/05) increasing the minimum wage hurts low-skill employees. Most economists agree that increasing the minimum wage destroys jobs. This job loss is concentrated on the least skilled employees in the economy. Research from Duke University, the University of Wisconsin, and Michigan State University indicates that increases in the minimum wage hurt low-skill employees. Cornell University economists found that groups such as high school dropouts and black young adults suffer four times more employment loss from a minimum wage increase than their non-black and more educated counterparts.
Losses to small business owners from minimum wage increases may be direct losses, such as cutting jobs or hours, or indirect losses—such as rising numbers of job
Vacancies, profit declines from increased costs, and price increases by small firm owners. Depending upon the stage of the business cycle, and specific industry/area conditions, these price increases may or may not stick and result in a loss of business
For the question who Gains From Minimum Wage Increases?
In theory, even with adverse employment effects, higher minimum wages might
Benefit poor families if the wage gains were concentrated among low- income
Workers in low- income families. And it would be useful to assume that all employment losses occurred to young persons from more affluent families. This however, is not the case. According to the Economic Policy Institute , poor women—disproportionately represented in low income households-are most likely to be helped by a minimum wage increase. However, because it takes almost $17,000 to lift a family of four out of poverty, the amount of the minimum wage increase is likely to be insufficient to eradicate poverty by itself.
Let us explore two different pointes of view that were discussed by New York Times magazine in 2005 and 2007.
Losses to small business owners from minimum wage increases may be direct losses, such as cutting jobs or hours, or indirect losses—such as rising numbers of job
Vacancies, profit declines from increased costs, and price increases by small firm owners. Depending upon the stage of the business cycle, and specific industry/area conditions, these price increases may or may not stick and result in a loss of business
For the question who Gains From Minimum Wage Increases?
In theory, even with adverse employment effects, higher minimum wages might
Benefit poor families if the wage gains were concentrated among low- income
Workers in low- income families. And it would be useful to assume that all employment losses occurred to young persons from more affluent families. This however, is not the case. According to the Economic Policy Institute , poor women—disproportionately represented in low income households-are most likely to be helped by a minimum wage increase. However, because it takes almost $17,000 to lift a family of four out of poverty, the amount of the minimum wage increase is likely to be insufficient to eradicate poverty by itself.
Let us explore two different pointes of view that were discussed by New York Times magazine in 2005 and 2007.