econ - Wisam Daifi Econ 201 Minimum Wage Verses...

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Wisam Daifi Econ 201 February 20, 2008 Minimum Wage Verses Unemployment Rate Year Minimum Wage Unem. Rate 1938 $0.25 19.0% 1939 $0.30 17.2% 1940 $0.30 14.6% 1941 $0.30 9.9% 1942 $0.30 4.7% 1943 $0.30 1.9% 1944 $0.30 1.2% 1945 $0.40 1.9% 1946 $0.40 3.9% 1947 $0.40 3.9% When the minimum wage increases, the inexperienced, the poor and the minorities are normally the first ones to be detached from the working force. A minimum wage increase is definitely not a benefit for low-skilled workers. It is rather a threat not only to their jobs, but to their future ability to receive a respectable living. Authorizing higher wages price people out of jobs for which they would otherwise be considered. Just as an employee will only accept a job at a wage high enough to reimburse him for his time, a business will only hire employees at a wage that allows the business to profit. At higher wages fewer jobs will be offered. As shown in the data, the minimum wage does not have a great impact on the unemployment rate. Like many other correlations, the
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unemployment rate isn’t always affected by the minimum wage.
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