minimum wage increase,good or bad for economy???

Answer 1

If you stick to an economist point of view, such an increase has both positive and negative impact, the whole thing is to know what impact is bigger.
It all depends on the state of the economy and the current behaviour of consumers and firms about the future.

Increasing the minimum wage has the immediate effect of raising costs for firms that employ lots of unskilled labour, which has a negative impact on their profit and could lead to a shift toward more capital-intensive technologies (the supermarket example from above is totally appropriate) or even bankruptcies.

But it also gives a boost to the income of those unskilled workers, which means more consumption, leading to higher demand and thus higher profits for the firms as a whole (which could lead to higher employment), less government spendings on the working poors and less social problems linked to poverty.
Another thing to take into account is to know if the laid-off workers (because of the increased costs that led to the less competitive firms having trouble) have enough opportunities to find other jobs in more dynamic firms, firms that would also need unskilled labour. As the unemployment rate in the USA is quite low, and the labour market flexible, I'd think that wouldn't be a problem, but it definitely would be a problem in countries like France or Germany, where unemployment is quite high.

The whole point is that salaries are both a cost and an income, and that a regulation-free labour market usually doesn't lead to an efficient situation for loads of reasons, the most popular ones amongst economists having to do with imperfect information and negociation power of the different agents (which leads me to recommend not to listen to the bullshit about a wonderful market-regulated society where everyone gets a fair share, as the bargaining power of firms is infinitely higher than the one of unskilled workers, I suppose you can easily understand why).

Answer 2

I'd rule out good. As with any policy, some will be hurt, some might come out ahead and there will likely be a host of unintended consequences.

Unfortunately, the people who are for a minimum wage increase don't understand the unintended consequences that will likely hurt the very people they a hoping to help.

For example, raising the price for unskilled labor may cause businesses to look for cheaper alternatives, like self check-out lanes at the store. Who benefits from the self checkout? The company that sells that self checkout does. The consumer might benefit if they pay a lower price. The people who lose their job didn't benefit though.

This creates further problems. If raising the wage shrinks job opportunities then not only are people missing out on making money, but they are also missing out on gaining on-the-job experience and establishing a work record that they can use to eventually get higher paying jobs.

Technology is just one substitute for high priced unskilled labor. A couple others are illegal immigrants and outsourcing production overseas.

Answer 3

Has a bit of both, you can expect some small business to let people go, and also larger co's, but right now the economy kinda needs the boost for Minimum wage earners.

However I see inflation looming on the horizen if the fed doesn't do something now. Gas prices are the start, now to help people pay for gas we are going to increase their wages which is going to increase the labor costs for goods and services which will raise those prices in the long term. And we are back to square 1.

Best advise, become independently wealthy and move.

Answer 4

Neither, the increase is only to the wage level that most unskilled workers earn anyway. The only effect that has ever been big enough to measure is a change in teenage unemployment rates. If the wage were raised to $10 or $15 per hour you would see an effect, but that will not happen. It is feel good legislation.

Answer 5

minimum salary is a foul theory no rely what. think of of the cost disparities by way of out the rustic. minimum salary in Alabama buys a good purchase greater of something than it does in huge apple. If all you may handle as an person is in spite of the government demands which you be paid on the least , you're a loser besides.

Answer 6

I'm not going to do an economic analysis but from a philosophical standpoint I offer one reason why it may be bad:

Because in a free society people should be able to negotiate what they want to pay for labor without interference from the government. If I want to pay a worker $4 an hour to be a line cook at my restaurant and you are willing to work for $4 an hour, then why should I have to pay $7 by the government?

Answer 7

Bad, lots of small business will go broke, and you can count on everything else going up cause the rest of the business's ain't gonna take the cost of it

Answer 8

good. Because it makes it harder for those unwilling to work. The social security payments are then less attractive.

Answer 9

bad

Answer 10

bad everything will just get more expensive