Wage Minimum Minimum Wage has been around ever since 1933 when the federal government tried to alleviate the economic hardship caused by the depression. Since then minimum wage has been in effect all over the nation. It has kept employers from paying their employees too little for an hour's wage. With minimum wage being around for so long one may believe that it must work and positively affect our economy. When an immigrant comes to America and can barley speak English how are they going to know if they ar e being cheated for the work that they are doing. Minimum wage has both beneficial and negative effects on today's economy. Minimum Wage was created in 1933 so the poorest workers could have a chance at a decent living. Since that time 74 years ago minimum wage has helped everyone in America have a chance to provide for their families and make a decent living. According to Jeff Chapman, who wrote the article The Who and Why of Minimum Wage, "The minimum wage is not just about helping the impoverished. It is about fairness, the value of work and the opportunities that work provides." What Chapman is saying is minimum wage provides fairness to those under skilled workers who don't have the skills to obtain a job at the higher paying level. Employers hold the advantage because they hold the higher hand in the wage bargain. That's why monopoly laws are in place saying someone may not be the only producer of a good because they would be able to charge above the goods actual value because the buyer has no where else to acquire the good. This is what the work world for under skilled workers would be like if it wasn't for minimum wage, the employer could pay them far below what they should actually be paid. Minimum wage prevents this from happening just like monopoly laws prevent a monopoly from happening. Minimum wage provides fairness to under skilled workers, and makes sure that the value of their work is not underappreciated. According to Chapman and a recent census half of low wage workers had a spouse and children and still were living under the poverty line which is $29,000 for a married family. Which is all more reason for them to be able to make a decent wage and be able to support their children and spouses. In the past minimum wage raises have proven to raise the wages of the lowest paid workers and do so without lowering the employment opportunities like many people state that raising the minimum wage will do. The new proposal states that the minimum wage is to be raised $2.10. It is going to take course over the next 3 years by raising the minimum wage $.70 each year so that the employers can adapt to it more easily. Ever since the minimum wage law was put into effect in 1933 a sense of justice and employer freedom has seemed to be taken away. Employers should be able to what pay they see just for an hours worth of work. An employee may only be doing $6 worth of work in a given hour but the employer is forced to pay that employee $7 dollars. This is a fast way to lose money and go out of business causing the employee and employer to be out of jobs and an income. Furthermore, raising the minimum wage puts a price floor above the equilibrium price between employees and employers and in the long run this causes a shortage in jobs. This is because with the minimum wage being higher the demand for the jobs goes up, but employers don't want to heir as many workers because they would have to pay the workers more, so supply in jobs goes down, causing a shortage in jobs. Raising the minimum wage also causes the high school dropout rate to increase. Seeing that they can make more money out there entices them into coming out of high school and makes them think that they can make more money even though it is still minimum wage. Minimum wage jobs are also usually entry level jobs and with high school dropouts filling these positions it makes it harder for them to move up the ladder and hurts them in the long run because they will still be making minimum wage or close to it later in their life when they are trying to support a family and raise children. Raising the minimum wage the $2.10 is a 40% raise for businesses who were paying their employees minimum wage before. Many small businesses will not be able to afford this and will either have to employ less people or may end up shutting down all together. All in all, minimum wage does play a major effect in our society and on our economy. When it was established after the depression there was the idea of getting America out of the economic situation it was in and put a value on the work that people were doing. It protected those we were desperate and needed to have a job no matter what from being cheated and ripped off by their employers. But as minimum wage has gone through time we have seen effects that it has in the short term and in the long run. Some of those effects are positive, and many of them are negative. Michele Bachmann once said, "if we took away the minimum wage-if conceivably it was gone-we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level." Saying that some wage is better than no wage, but at the same time people would not feel it is even worth it to work for one or two dollars an hour.
Works Cited
Bernstien, Jared. "Minimum Wages and Poverty" April 1999. <http://www.epinet.org/content.cfm.web> Chapman, Jeff. "The Who and Why of Minimum Wage" August 2004. Economic Policy Institute Issue #201 Gangemi, Jeffrey. "Poorest Americans have waited too long for a raise" USA Today; February 2007.