is the purposed minimum wage increase good or bad?

Question

if the democrats raise the minimum wage it would help a lot of people, but only those who make minimum wage. Would it cause inflation? Would the dollar's value decrease?

Answer 1

I just saw this online in an article. It's not very good for any of us. Yes, it will cause inflation to go up and possible cut hours for hourly people and/or loss of some jobs. I thought it would help but from what I've read, I'm wrong.

Answer 2

The above post is full of misinformation obviously intended you convince you that a minimum wage increase is “bad.” While the poster apparently urges you to “make an informed decision,” he does this after presenting several paragraphs of data that only support one side of the issue.

First, allow me to address this reasoning:

“So would an increase in the minimum wage affect all 1.9 million workers who are paid at or below the federal minimum wage? The answer is probably not.”

Of course it wouldn’t—it would only affect the people in this group paid AT the minimum wage. Obviously, if you are paid BELOW the minimum wage, you are subject to the exemptions the poster listed, or possibly to other exemptions. However, if you are being paid AT the minimum wage, it is equally obvious that you’re not subject to these exemptions.

Therefore, raising the minimum wage will help the 479,000 people currently paid the minimum of $5.15 per hour. As the poster glosses over, it will also help the 5.6 million people paid in between the current 5.15 minimum and the new proposed minimum of $7.25.

As for the tired rhetoric that an increase in the minimum wage leads to a decrease in employment, please refer to this survey of academic economists:

http://www.indiana.edu/~econed/pdffiles/fall03/fuller.pdf

Only 46% of the economists polled fully agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers." This is far from the consensus that the poster claims. In fact, the Bureau of Labor Statistics shows that following the federal minimum wage increase in 1996, the state of Missouri’s unemployment rate dropped from 4.3% to 3.1% (I’m using this example because I currently reside in that state). In addition, the percentage of Americans living below the poverty line dropped every year from ’96-’00 to a low of 11.3%.

The bottom line: look at all of the labor organizations supporting this increase. Would the AFL-CIO be supporting a new higher federal minimum wage if it were BAD for workers? I don’t think so.

Answer 3

Minimum wage should be raised. It's already too low for todays inflation! It's the big money that causes higher prices. The jobs that are low pay are difficult and demanding physically and there should be better compensation.

Answer 4

The problem with raising minimum wage is the price of products and services go up in direct proportion. Just my thoughts.

Answer 5

The mimimum wage is a confusing issue.

From the U.S. Labor Dept:

"Of those paid by the hour, 479,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage. Another 1.4 million were reported as earning wages below the minimum.2 Together, these 1.9 million workers with wages at or below the minimum made up 2.5 percent of all hourly-paid workers."

Source: http://www.bls.gov/cps/minwage2005.htm

So would an increase in the minimum wage affect all 1.9 million workers who are paid at or below the federal minimum wage?

The answer is probably not. Why?

Because there are many exceptions and caveats to the Federal minimum wage. For example:

"The minimum wage law (the FLSA) applies to employees of enterprises that do at least $500,000 in business a year."

"An employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage"

"A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers"

"Farmworkers employed on small farms are exempt from both the minimum wage and overtime pay provisions of the FLSA."

"Seasonal and recreational establishments: Employees employed by certain seasonal and recreational establishments are exempt from both the minimum wage and overtime pay provisions of the FLSA."

Sources: http://www.dol.gov/esa/minwage/q-a.htm
http://www.dol.gov/elaws/esa/flsa/screen75.asp

The writer asks whether the proposed increase is 'good' or 'bad'
Well the total paid the mimimum wage is 479,000 workers. Those paid below the mimimum wage total 1.4 million. However, as has been demonstrated there are many exemptions to the mimimum wage, so whether an increase would affect those 1.4 million who are paid under the minimum wage depends on whether the new bill invalidates the exemptions or not. And who are these people? From the U.S. Labor Dept:

"Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and about one-fourth of workers earning at or below the minimum wage were age 16-19. Among employed teenagers, about 9 percent earned $5.15 or less. About 2 percent of workers age 25 and over earned the minimum wage or less. Among those age 65 and over, the proportion was about 3 percent. "

http://www.bls.gov/cps/minwage2005.htm

Now, how many people are paid between $5.15 and the new wage of $7.25? There is no hard data on that, only estimates.

"If the federal wage does rise in 26 months to $7.25 an hour, about 5.6 million people _ 4 percent of the work force _ who make less than this would be directly affected, according to the Economic Policy Institute, a liberal leaning group. The group estimates that another 7.4 million workers would benefit indirectly as raising the floor would ripple through the work force.

That means higher payroll costs for employers."

http://www.chron.com/disp/story.mpl/ap/business/4460730.html

Anyone familiar with economics knows when labor costs go up, employers search for ways to reduce those costs. This can include reduced benefits, reduced hours per week for workers or consolidation of jobs, ie layoffs.

"There is certainly a case to be made that the added cost of a higher minimum wage — by itself — could wipe out some marginally profitable businesses and eliminate the jobs they provide. The economics have been spelled out clearly by think tanks like the Cato Institute.

“If the government coercively raises the price of some good (such as labor) above its market value, the demand for that good will fall, and some of the supply will become ‘disemployed,'" according to a study by the libertarian group. "Unfortunately, in the case of minimum wages, the disemployed goods are human beings.”

To the extent that economists agree on anything, most seem to agree with that theoretical view."

Source: http://www.msnbc.msn.com/id/16229175/

However, the debate continues on the actual real world impact of minimum wage increases. So the jury is out on whether the proposed minimum wage increase is 'good' or 'bad.' It's up to you to read the data, and make an informed decision.

Answer 6

The main problem is not raising the minimum wage, it is the outrageous salaries and benifit packages paid to the CEOs and board members of companies.

Even in years where profits fall drastically, these people get bonus' while line workers and others get their benifits and hours cut.

It is the neo-con, "I got mine, screw the rest of you" attitude that is destroying our economy.

Answer 7

no any time you raise the standards of living inflation decreases and the value increases

Answer 8

Well the cost of living goes up every year. So in that case it is a good thing!