Arguments For and Against Minimum Wage in the US

Arguments For and Against Minimum mesh in the USPatrick Tawadros, Corinne Dexter, Mark Hanna, Yuanwen DongMediated Speech Outline Minimum WageI. accessionIn this country, regard little of views and opinions, the arguable topic of marginal absorb has resounding effects on workers, businesses, and consumers alike.We ordain try to parse taboo the gory details by debating the pros and cons of increasing the minimum net income.We make believe done extensive query, as well as worked our fair share of minimum remuneration jobs giving us the ability to speak confidently on matters related to minimum lease.Its likely most of you make water minimum wage jobs giving you something to relate. If you dont work for minimum wage you are probably still a consumer and thus either through wage increases or cost increases the results of this debate will have an impact in your life. at that place are strong arguments both for and against breeding the minimum wage includingThe potential t o improve health, academics, and expurgate crime rates.The potential to lead to a mandrel in unemploymentThe potential to reduce poverty levelsAnd finall(a)y the potential to lower demandHow might just a few dollars do all this? come up lets start with the first health academics and crime. II. BodyPro Argument 1 (PATRICK TAWADROS) Increasing the minimum wage would have positive health effects, improve academics in the overall sense, and reduce crime rates.Increasing minimum wage sustains a healthy population and lowers mortality.In a study done by Rajiv Bhatia, MD, on the California minimum wage, it was launch that a higher minimum wage would ultimately allow workers to have enough to eat, be more(prenominal) likely to exercise, and still prevent premature deaths (Bhatia).In another study conducted by Barhii, he concluded that policies that reduce poverty and foment honorarium of low-income race can be expected to significantly improve overall health and reduce health inequ ities (Barhii).To add to the added health benefits, increasing minimum wage would increase school attendance, tour simultaneously diminish high school dropout rates.Teens living in poverty are twice as likely to miss 3 or more days of school per month when compared to teens who do not live in poverty (Bhatia).A higher minimum wage would reduce crime.In a study done by the Executive part of the Presidents Council of Economic Advisors, it was found that by raising minimum wage to $12 by the year 2020 that in that respect would be a three to five percent crime flow. This is primarily due to the fact that higher wages provide viable and sustainable employment. (Executive Office of the President)In another study conducted at the University of Virginia, it was found that an increase in wages is associated with a reduction in property-related crimes. (Fernandez)Response to pro argument (con) (YUANWEN) At first glance, the increasing of minimum wage would allow people of lower incomes to live a better life. But increasing minimum wages adds some potential threats to the equilibrium of the free marketplace. The net effect of this interference is not necessarily good. To specify, increasing minimum wage will attempt higher unemployment rate, and has no significant links to lowering the crimes..There is few evidence to show that there is a link between the increasing of minimum wages and decrease of crime rates. According to a study conducted by Boston College in 2013, crime will increase by 1.9 percentage points among 14-30 year-olds as the minimum wage increases. (Fuller).Due to the higher unemployment rate caused by the increasing of minimum wage, some of the next generation will not be able to afford the education. In 2009, a study by the American Journal of Economics and Sociology discovered that in Maryland, a 25-percent increase in the real minimum wage was associated with a 0.55 percent increase in the dropout rate for Hispanic students. (Crofton, Anderso n, and Rawe).Con argument (YUANWEN) On the contrary, increasing the minimum wage would force business to lay stumble more employees to save budgets and raise the unemployment rates.Sub point 1 Increasing minimum wage will raise the cost of businesses, lower their employment levels, and cause higher unemployment rate.Raising minimum wage will increase the cost of businesses, forcing businesses to lay off more employees. The Congressional Budget Office predicted a $7.25 to $10.10 minimum wage increase could potentially cost 500,000 jobs. (Congressional Budget Office).Increasing minimum wages will lower the willingness of businesses to hire more employers, due to the boost of the cost. There was a survey conducted of 1,213 businesses and human resources professionals and 38% of the employers who brooked minimum wage tell they would resort to letting go some employees if it was raised to $10.10. Among them 54% said they would reducing hiring levels (Kast).Statistically, comparing t o countries that do not have minimum wage policy, countries with minimum wage policy have higher rate of unemployment. In 2014, Steve H. Hanke, Professor of utilize Economics at Johns Hopkins University, conducted a survey of the 21 European Union countries that had a minimum wage and discovered they had an average unemployment rate of about 11.8%, which was a third higher than the 7.9% average in the remaining EU countries with no minimum wage (Hanke).Sub point 2 Increasing minimum wage will rig lower-skilled worker at a disadvantage, since the rise of wage exposes those lower-skilled to the same competition with those more skilled.Raising minimum wage will put lower-skilled workers at disadvantages. From an employers point of view, people of lower skills do not justify the rise of minimum wages, but they have no choice but to touch base the competition with the more skilled, if minimum wages are increased. James Dorn stated that a minimum wage increase by 10% leads to a 1-3% de crease in employment of low-skilled workers in the short term, and to a larger decrease in the long run (Dorn).Increasing minimum wages puts lower-skilled workers at a disadvantages by forcing them to be exposed to the same competition with people who are more skilled. George Reisman stated that if the minimum wage was increased to $10.10, jobs that presently pay $7.25 had to pay $10.10, than workers who previously would not have considered those jobs because of their ability to earn $8, $9, or $10 per hour, will now consider them. The effect is to expose the workers whose skills do not go a level corresponding to $7.25 per hour to the competition of better educated, more skilled workers presently able to earn wage rates ranging from just in a higher place $7.25 to just below $10.10. (Reisman).Response to con argument (CORINNE) Despite the claim of a rise in unemployment, studies on past minimum wage hikes have shown little effect on unemployment in both federal mandated and stat e mandated hikes.Sub point 1 A case study of the fast provender manufacturing which compared two states, New Jersey and Pennsylvania after New Jersey increased the minimum wage, and Pennsylvania did not, showed that there is no evidence that the rise in New Jerseys minimum wage reduced employment at fast-food restaurants in the state (Card, Krueger). The department of labor statistics further contends that in 65 years of federal minimum wage hikes, unemployment rates in the past have generally gone down, or stayed the same after increases in the minimum wage with still one exception in the 70s and that unemployment spike is linked to other causes such as recession and an energy crisis (Real Minimum Wage). History shows that it safe to assume that if anything a higher minimum wage will put more money in peoples pockets to be used for discretionary spending which will stimulate the market or keep it the same, but not increase unemployment.Pro argument (CORINNE) What, hoever, minimu m wage increases always do, is reduce poverty and in turn reduce government spending.Sub point 1 Currently, the minimum wage is not enough to live on. The economic policy institute using government sources found that the average cost of living in the U.S., excluding discretionary spending is roughly $50,000 more than what a minimum-wage worker earns (Cooper). As a result numerous people are either barely reservation it by, or are below the poverty line entirely and relying on government aid to do so. In the 2014 Congressional Budget Office report, it showed that increasing the minimum wage to $9 would lift 300,000 people out of poverty, while raising it to $10.10 would bring 900,000 people out of poverty (Congressional Budget Office). Accounting for inflation minimum wage should actually be even higher at $10.52 or more depending on where person lives implying that poverty rates could shrink even lower with a more aggressive raise (Cooper).Sub point 2 By helping families work o ff the the diligent work that they do we are likewise helping the taxpayer burden. It was reported in 2014 by The Center for American Progress that by raising the minimum wage to $10.10, SNAP spending would decline by $4.6 billion (West, Reich). Likewise The Economic Policy Institute found out that by making the minimum wage to be $10.10, at least 1.7 million Americans would not depend on government assistance programs (Cooper). The wage increase would save $7.6 billion on annual government spending for income-support programs (Cooper). This money could either go back into the pockets of the everyday person or be used for other dear programs.Response to pro argument (MARK HANNA) Unfortunately a decrease in government spending for income support programs could lead to unintended negative sideeffects down the road for the poor and unemployed.People who have then been laid off would suffer from reductions in benefits because of congressional budget cuts to programs such as the supp lemental nutrition assistance program (SNAP, formerly called food stamps), temporary assistance for needy families (TANF), the Earned Income Tax Credit (EITC), child-care subsidies, housing vouchers, and Women, Infants, and Children (WIC) due to the benefit rates fading as income rises (Sherk, 2013). Those people still employed would be able to afford more so the need for these programs would diminish and as more people will have to use those defunded programs as unemployment increases, poverty will rise as the budget will not be able to support them (Sherk, 2013).The standard of living will also increase as minimum wage increases. In a study conducted by Purdue Universitys School of Hospitality and Tourism Management, they found that increasing wages to $22 an hour raises consumer prices by 25% (McClure, 2015).Con argument (MARK HANNA) Thus, raising the minimum wage would actually lower demand for market development and products as a result of higher prices, resulting in negative l ong term outcomes for families and the economy.Studies show that if the minimum wage was to increase from $7.25 an hour to $10.10 an hour, the demand for workers would decrease and many people would get laid off. Meanwhile, those who were not laid off pay 15% more on payroll and income taxes for each additional dollar that is added to the minimum wage (Sherk, 2013). This decrease in demand will have unavoidable negative consequences for unskilled workers and their families in the long run in the form of less opportunity for employment and skill acquisition. Chaplin, Mark, and Andreas (2003) found through a study they conducted that increasing the minimum wage would lower the continuation rate for grades 9-12 in states with dropout ages under 18.Raising the minimum wage will cause demand to fall for what James and Mary Kau (1973) call industrial incentive, which is described as the incentive for industry to progress itself forward. This fall in incentive was documented in a study co nducted by Van Sickle (1946), where he found that the south was favourable with industrialization for a few decades then plummeted after the Fair Labor Standards Act was passed. The rising costs created by low demand for work would also impede competition, as the cost of production of goods from the south to the north would increase (Kau Kau, 1973).Response to con argument (PATRICK TAWADROS) Long term effects of the minimum wage being increased do not affect educational opportunities for teen workers and do not hurt demand for consumer goods.In an journal article by Warren and Hamrock (2010), they describe how the effects of a minimum wage increase would not impact teen workers who were not already doing poorly academically as others say it may. They claim it would only impact those who would have had a history of failure who are not engaged in meaningful extracurricular, social or athletic activities in school and, perhaps most importantly, who are in a position to meaningfully i ncrease their levels of labor market participation (Warren Hamrock, 2010). They prevent to state that if the raise would impact a certain educational subset, it would be those students who are competing with adults for jobs and/or who would be dropouts either way (Warren Hamrock, 2010).Minimum wage increases do not impact market development as innovation has always been outrunning minimum wage increases. This is shown in an article published by The Economist (2015), stating that in most developed countries minimum wages rise with income levels, but in America that is not the case, as one would think that in a country with a GDP of $53,000 per person, the minimum wage should be at least $12 an hour, but it is not. Therefore, because it has not kept up with income rises, it cannot be safely said that raising the minimum wage kills innovation.Thus far, what have we learned from our discussion? Lets recap.III. ConclusionUltimately, increasing minimum wage could reduce poverty, hence, improving health, academic performance, and decreasing crime rates. However, on the other hand, increasing minimum wage could pressure business to lay off employees and could decrease demand for labor and products.Regardless of perspective, the controversial and divisive topic of minimum wage is a far reaching issue in the United States of America and so it is important to weigh all sides equally to come to a balanced conclusion.Works CitedPatricks Pro Argument SourcesExecutive Office of the President, Council of Economic Advisors, Economic Perspectives on Incarceration and the Criminal referee System, whitehouse.gov, Apr. 2016Fernandez, J., Holman, T., Pepper, J. V. (2014). The opposition of LivingWage Ordinances on Urban Crime. Industrial Relations A Journal of sparing and Society, 53(3), 478-500.Rajiv Bhatia, Health Impacts of Raising Californias Minimum Wage, Human Impact Partners website, May 2014 Bay Area Regional Health Inequities Initiative (BARHII) The Minimum Wage and Health A Bay Area Analysis, barhii.org, Oct. 2014Warren, J., Hamrock, C. (2010). The Effect of Minimum Wage grade on High School Completion. Social Forces, 88(3), 1379-1392. Retrieved from http//www.jstor.org.proxy.libraries.rutgers.edu/stable/40645895The Economist. (2015, May 20). Pay dirt. Retrieved from http//www.economist.com/blogs/graphicdetail/2015/05/minimum-wagesCorinnes Pro Sources Card, D., Krueger, A. B. (2000). Minimum Wages and exercise A Case sight of the Fast-Food Industry in New Jersey and Pennsylvania Reply. American Economic Review,90(5), 1397-1420. doi10.1257/aer.90.5.1397Cooper, David. Raising the Federal Minimum Wage to $10.10 Would Save Safety profit Programs Billions and Help Ensure problemes Are Doing Their Fair Share. Issue brief no. 387. New York Economic Policy Institute, 2014. Print.Real Minimum Wage Rate vs Unemployment Rates January 1950 to January 2013 Chart. (2013.). In Bureau of Labor Statistics .Reich, Michael, and Rachel West. The Effects of Minimum Wages on Food Stamp Enrollment and Expenditures. Industrial Relations A Journal of Economy and Society 54.4 (2015) 668-94. Web.The Effects of Minimum-Wage Increase on Employment and Family Income. Rep. no. 4856. N.p. Congressional Budget Office, 2014. Print.Yuanwens Con SourcesCongressional Budget Office, The Effects of Minimum-Wage Increase on Employment and Family Income, cbo.gov, Feb. 2014Kast, S., New Express Employment Professionals Survey of Employers Shows 38% of Those Who Pay Minimum Wage Will Lay Off Workers If Wage Is Hiked, prweb.com, Mar. 19, 2014Hanke, S.H., Let the Data turn to The Truth Behind Minimum Wage Laws, Cato Institute website, Apr. 2014Dorn, J., The Minimum Wage Delusion, and the Death of Common Sense, Forbes, May 7, 2013Reisman, G., How Minimum Wage Laws Increase Poverty, Mises Institute website, Apr. 4, 2014Crofton, S.O., Anderson, W.L., Rawe, E.C., Do Higher Real Minimum Wages Lead to More High School Dropouts? Evidence from Maryland across Race s, 1993-2004, American Journal of Economics and Sociology, Apr. 2009Fuller, D., multilevel Study Finds No Link Between Minimum Wage and Crime Rates, uc.edu, Nov 18, 2013Marks Con SourcesSherk, J. (2013, June 25). What is Minimum Wage Its History and Effects on the Economy. Retrieved from http//www2.heritage.org/research/testimony/2013/06/what-is-minimum-wage-its-history-and-effects-on-the-economyChaplin, D. D., Turner, M. D., Pape, A. D. (2003). Minimum wages and school enrollment of teenagers a look at the 1990s. Economics of Education Review, 22(1), 11-21.Van Sickle, John, Geographical Aspects of a Minimum Wage, Harvard Business Review, XXIV (Spring 1946), 288.Kau, J., Mary L. Kau. (1973). Social Policy Implications of the Minimum Wage Law. Policy Sciences, 4(1), 21-27. Retrieved from http//www.jstor.org.proxy.libraries.rutgers.edu/stable/4531512McClure, G. (2015, July 27). Study Raising wages to $15 an hour for limited-service restaurant employees would raise prices 4.3 percent . Retrieved from http//www.purdue.edu/newsroom/releases/2015/Q3/study-raising-wages-to-15-an-hour-for-limited-service-restaurant-employees-would-raise-prices-4.3-percent.html