Question

We are discussing the minimum wage.

The Fair Labor Standards Act establishing a national minimum wage was enacted in 1938. The minimum wage was set at 25¢ an hour. Here is a history of changes in federal minimum wage (source: https://bebusinessed.com/history/history-of-minimum-wage/)

On this discussion board, discuss if the minimum wage should be eliminated, remain as is or be increased. Be specific with your position and support your position with facts, logic and specific examples.

Answer 1

Minimum wage- It is the minimum amount of salary or remuneration which the employers pay to their workers.

Minimum wage should be eliminated, Increase or remain as it is?

Elimination of Minimum wage

If the minimum wage will be eliminated fully, there can be more opportunities for jobs for the workers who usually don't have much knowledge which mainly includes, school dropouts and teenagers.

When the cost of labour will fall, the employers will demand more of it.

Cons of eliminating the minimum wage includes exploitation of the working class and out of control free market failure.

Increasing minimum wage

Cons of raising minimum wage includes, as supply will increase it will cause unemployment and it can also cause price inflation as there will be higher wages with higher prices.

Pros of raising minimum wage- It can reduce labour turnover, income inequality and will lead to increase in productivity and worker's morale.

Most of the republican politicians believe that increasing minimum wages will kill jobs.

Poverty and minimum wage are also connected with each other as minimum wages averages at 60% of the poverty level. For example- If a person is working for a minimum wage full time for one year will be just 1% under the poverty line.

Full-time earnings for minimum wage earners are estimated based on a 40-hour work week and 50 working weeks per year. If the person will work for a full year under minimum wage, he can easily live above the poverty line. This is one of the best advantages of the minimum wage. Different countries have different minimum wages laws.

As Dube’s review suggests, most estimates of the employment elasticity aren’t close to -1, despite some studies finding effects in that range. That’s a skew way of saying that even if employment falls, it will fall less than wages rise by, and as such the benefits for low-wage workers seem to swamp any employment effects. Which means that for example if there will be no minimum wage the empoyment will fall, and if minimum wage will increase it will increase the wages for the worker but the propotionate increase in wages will be more than fall in employment. Which means that increasing minumum wage will lead to higher wages, which is one the best advantage of increasing minumum wage.

Therefore, higher minimum wage or an increase in the minimum wage is a good idea.