The economics of minimum wage
The Economics of the minimum wage
On August 2013, 3.5 million Bangladesh garment workers got their 36 dollars/month minimum wage raised by 80%. This was a response of the Bangladeshi government to April´s collapse and burn of the Rena Plaza factory where hundreds of workers were killed. This was covered by the international media all over the world and forced western retailers to improve working conditions in their supplier’s factories there.
10.000 miles away from Bangladesh, the richest country in the world -the United States of America- had its particular battle for raising an 7.25 $ minimum wage. In this country the cost of living is so high that even full-time workers struggle to live decently on their wages. As the president stated “Let’s declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty.” Obama wants to upgrade this salary from 7.25$ to 9$, this fact in his opinion, would have strongly positive effects in low-income families without hurting businesses or raising the unemployment rate.
However, there are many voices against the president. Concretely some reputed economists and many companies that hire low-wage workers. The first ones think -as the economist David Neumark stated- that "a recession is the worst time to raise the cost of low skilled employment" (The Wall Street Journal). The second ones are scared about having to pay more to their workers, as this increases their cost of business and so decreases their competitiveness.
For fighting this opposition, Obama tries to let them know that a minimum wage is key for getting the economy back on track, as it puts money in the working peoples and middle class pockets. The president also remark’s that in other countries like Australia (16.88$), France (12.09$) or United Kingdom (9.83$) the minimum wages are much higher than in the US and how that benefit their respective economies.
The white house also said that this 1.75$ raise will
On August 2013, 3.5 million Bangladesh garment workers got their 36 dollars/month minimum wage raised by 80%. This was a response of the Bangladeshi government to April´s collapse and burn of the Rena Plaza factory where hundreds of workers were killed. This was covered by the international media all over the world and forced western retailers to improve working conditions in their supplier’s factories there.
10.000 miles away from Bangladesh, the richest country in the world -the United States of America- had its particular battle for raising an 7.25 $ minimum wage. In this country the cost of living is so high that even full-time workers struggle to live decently on their wages. As the president stated “Let’s declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty.” Obama wants to upgrade this salary from 7.25$ to 9$, this fact in his opinion, would have strongly positive effects in low-income families without hurting businesses or raising the unemployment rate.
However, there are many voices against the president. Concretely some reputed economists and many companies that hire low-wage workers. The first ones think -as the economist David Neumark stated- that "a recession is the worst time to raise the cost of low skilled employment" (The Wall Street Journal). The second ones are scared about having to pay more to their workers, as this increases their cost of business and so decreases their competitiveness.
For fighting this opposition, Obama tries to let them know that a minimum wage is key for getting the economy back on track, as it puts money in the working peoples and middle class pockets. The president also remark’s that in other countries like Australia (16.88$), France (12.09$) or United Kingdom (9.83$) the minimum wages are much higher than in the US and how that benefit their respective economies.
The white house also said that this 1.75$ raise will
Bibliography: The Wall Street Journal: http://online.wsj.com/news/articles/SB124476823767508619 The New York Times: http://www.nytimes.com/2013/02/13/us/politics/obama-pushes-for-increase-in-federal-minimum-wage.html?_r=1& The Wasington Post: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/19/the-u-s-has-a-7-25-minimum-wage-australias-is-16-88/ The Huffington Post: http://www.huffingtonpost.com/2013/02/13/sotu_n_2653324.html CNN: http://www.cnn.com/2013/07/29/politics/minimum-wage-congress-obama/