As we study price floors in class, there is no better example of this topic than the minimum wage. While all economists agree that minimum wage is a price floor, they differ in their opinion on the merits of the wage. I have a feeling that many of you will as well...
Before posting on the blog, you are to read the following editorial from the Atlanta Journal-Constitution that features a debate between a proponent and opponent of a minimum wage increase.
Does raising the minimum wage help the economy?
Part ONE--due Wednesday
After reading the article, students should write a BRIEF response (using info from the article) with their own feelings on the minimum wage. Is it poor economic policy, or is it needed to ensure that poorer Americans receive a just wage? I understand that you may fall somewhere in the middle of this debate, but please try to favor one view over the other.
At the end of your response, you MUST write a question that you would like to ask a person who is in favor of the opposite view.
Part Two--due Thursday
Then, in a SEPARATE comment, you will then answer one of the questions that was asked to people with your point of view. (When answering, please state whose question you are responding to).
Due Date (AGAIN): Your Initial Views and Question due Wednesday; Your response to another classmate due Thursday
44 comments:
I support Doug Gatlin: minimum wage should be increased. This ensures that poor families can provide for themselves with little to no help from welfare and our tax dollars. It also decreases employee turnover and absenteeism and increases sales and worker loyalty and productivity.
Question: Who benefits from wage increases, and who benefits when wages are not increased?
I agree with Don Sabbarese that it is not a good idea to raise the minimum wage. A raise in minimum wage would result in a number of problems. Such problems include a high loss of employment, like the article mentioned, businesses usually cut employers in order to survive a recession and to avoid going out of business. Thus those less skilled workers would have a disadvantage. Also a raise in the wage would increase the prices of goods and make necessities less affordable. It was clearly seen that raising the minimum wage by 70 cents on July 24th did not mkae much of a difference to those on welfare.
Question: By how much would the government have to raise the minimum wage in order for it to have an effect on the economy? Would that raise be worth it?
I agree with Doug Gatlin. If minimum wage was increased it would earn the loyalty of the workers along with productivity. It would also show the world about doing the right thing and treating workers with fairness. More and more cities are raising their minimum wage and showing the business that even though they think they will be losing money, they actually gain more because the workers are happy and increasing productivity.
Question: If we don't raise the minimum wage, then who is responsible for all of the homeless families who are barely able to support their family with food off of their small wages?
I agree with Doug Gatlin. If raising minimum wage increases worker productivity, that is exactly what we need to stimulate our economy. In this time, when unemployment is on the rise and the value of the dollar is going down, it is important that people can make as much as they can so that the government can spend less money on welfare and more on fixing the value of the dollar and on fixing our economy. While this might be harder on employers, the long-term benefits of increased productivity and worker loyalty can mean a lot. It will encourage people to buy your produce because you are helping put America to work, and giving the government an opportunity to use the tax money elsewhere.
Question: what will happen if the government runs out of money to pay welfare? Will we want that on our shoulders because we weren’t willing to pay a few extra dollars so that people can have food and shelter?
I agree with Doug Gatlin that minimum wage should be increased. As the article stated, many people are working 40 hours a week with two minimum waged jobs. The price that minimum wage is today is just not sufficient enough for many families to provide the proper care and support one needs to survive. Though many with disagree with Mr. Gatlin, and say that teenagers are the ones with minimum waged jobs so it should not be increased are wrong. They are wrong because there are many other people who are on minimum wage who are trying to support their families. Along with all this, increasing minimum wage woulod increase loyalty and most employees would work harder knowing they are recieving more money for thier hard work. These reasons and many others is why I believe minimum wage should be increased.
Question: What would happen to families who are working two minimum wage jobs and trying to support a familey. How would they be able to feed and shelter their familey with such a low price of minimum wage?
I agree with Don Sabbarese that minimum wage should not be increased. As he stated, a minimum wage increase would bring about a number of problems, further hurting the economy as opposed to the small gains from raising wages. As Sabbarese stated in his article the job market gets a lot harder and there are many fewer jobs when wages increase. As seen in Georgia the job market is plummiting due to the increasing minimum wage. This is a huge problem to worsen to add a little amount of money that will not make that much of a difference in the lifestyles of these people.
Question: Is it worth it to raise the minimun wage to $10 (still an inadequate amount to live on) and in effect put many people out of jobs?
I agree with Gatlin: Minimum wage should be increased in the ballpark of $10 an hour. Worker productivity will most likely skyrocket along with loyalty. By putting more money in the hands of consumers it also gives the market an opportunity to expand because people begin to re-invest money that they never had before. All in all putting more money in the pockets of consumers will lead to economic growth in the market.
Question: Do the business owners see direct results economically from a raise in pay toward workers?
I agree with Don Sabbarese: We are in a recession. If the government raises the minimum wage, companies may have to lay off workers creating more unemployment. Unemployment leads to poverty, and poverty leads to crime. Also, most of the companies would have to increase prices to cover the increase in minimum wage so they wouldn't go out of business, thus hurting themselves in the long run because more people will choose alternatives to their product or service. Finally, there's no gaurantee that the increase in minimum wage will lead the workers to go out and spend their money on necessities. They may choose to save it or pay off debts.
Question: Do you really think that increasing minimum wage will increase how hard people work?
I support Doug Gatlin. The increase of minimum wage motivates spending by increasing the income of poorer buyers, and it decreases the government's trouble of supporting social welfare programs. More importantly, wage increase improves the productivity and work ethic of employees.
The question to be asked is how can minimum-wage increase weaken the economy?
The minimum wage should be increased. The argument against the hike states that the minimum wage has increased by 40%, but that fails to account for inflation. The anti-minimum wage article also contradicts itself. It states that keeping the minimum wage where it is will people in economic trouble. I don’t understand how not giving people more money will improve their situation. Furthermore, the author mentions that there is a certain number of people who will never move past low skill labor positions. How can Don Sabbarese defend his position by illustrating exactly why a increase in the minimum wage would be beneficial.? Overall, the con side is a weak, poorly constructed argument.
Q:Will a increase in the minimum wage actually result in a decrease of welfare collected?
I agree with Don Sabbarese, although raising minimum wage does has some good effects they are outweighed by bad ones. As he says, many teenagers who are being paid minimum wage will get better, higher paying jobs, leaving only those unskilled workers getting paid minimum wage. I don’t think that paying people who do not have skills more will increase productivity or said employees overall quality of life. It is more important to learn a skill and then be compensated for it. One point that Gatlin makes it that we are paying for people receiving minimum wage in regards to health care and wealth fare, but it they were paid more money that certainly would not mean that we would stop being taxed. Although it would be ideal for everyone to get paid a decent amount of money those who are unskilled and haven’t taken the time to master a skill shouldn’t then be compensated for as much as those people who have.
What does that say about America and our achievement ideals if we agree to pay people who have not taken time or effort to master a skill more money?
Doug Gatlin states that if people were paid a living wage it would result in powerful economic stimulus however, it could also result in inflation because the economy is based on supply and demand people will buy more goods which increases prices. I agree with Don Sabbarese that raising minimum wage is not an economic benefactor. Raising minimum wage creates multitudes of problems such as sharp drops in demand and prices, competitive industries cutting labor costs which causes businesses to go down, and cut down on job opportunities.
Question: Why do teenagers have a disadvantage in the job market when they're just as capable, productive and have strong incentive to work?
I agree with Don Sabbarese: It is a poor economic policy because it would only decrease jobs in the long run and put companies out of business. Companies and businesses would be forced to pay someone more money than what their task is actually worth, “then employers will have an economic incentive to either substitute that worker with a more productive worker or replace him or her with capital”. It would diminish jobs because employers may not be able to afford to pay all of their employees ten dollars an hour, so they would have to cut down on staff. Such as, “Businesses in highly competitive industries such as fast food, restaurants and hotels, typically cut their labor costs to survive a recession; the less fortunate go out of business”
Would raising minimum wage for the least skilled workers encourage people to skip college and go straight to work?
I agree with Doug Gatlin that minimum wage should be increased. It will help stimulate the economy because people will have more money to spend. It will also help increase worker productivity. Lastly, it would also help working parents not need to work as much and to be able to spend more time with their families.
Question: Will raising the minimum wage actually cause a large increase the unemployment rate?
I agree with Mr. Gatlin regarding the issue of minimum wage. The minimum wage should be raised. There are numerous benefits that would result from the wage raise. First of all, it is very difficult for people to live on the current minimum wage in many cities across the United States. One example is in Atlanta, an apartment costs more than one-third of the monthly earnings for a worker on minimum wage, which is not recommended. Another benefit is that raising the minimum wage would allow workers to spend more money thus adding more money to the economy through sales. Money spent on welfare would decrease because workers could live without the extra money from welfare because they can support themselves with the new wages. Overall, there are various reasons for raising the minimum wage and the government would be wise to do so.
Question: How much could the minimum wage be raised until there is a dramitic affect on unemployment?
I believe that a minimum wage is better for the economy. One thing a minimum wage does it allows people to put more into the economy creating “a powerful economic stimulus.” Not only does minimum wage help workers but also employers. It saves money on retraining new employees, improves “productivity”, and “loyalty of their employees. And without a minimum wage it would just cause an upset in the economy because less money is being made, which means less money is being put into circulation. This causes trouble for both the producers (no one is buying their products) and consumers (products cost too much).
If there was no minimum wage, how would we be able to protect the workers from being exploited (in the sense of overworked with little benefit)? (assuming there are no other jobs to be had)
i agree with the idea to raise the minimum wage because this will help families that cannot provide for themselves and take the burden off of the government. By raising the minimum wage there will be more money in consumers pockets to live lives without poverty and they will have more money to buy things.
Question: How will families in poverty ever be able to support their families basic necessities if they cannot provide so while still working two jobs?
I agree with Doug Gatlin. If minimum wages are increased, there will be more money in the hands of the consumer, and they can buy more, boosting the economy. Worker loyalty would also be increased, which in turn would most likly increase productivity. This is something every boss wants. Also it is the moral thing to do. As the article states "They might work two jobs — which means the family is left alone, and families ought to be together." It is not right that CEOs make millions while people who are working for them are homeless.
Q:Do places like Baltimore and Boston, cities with high minimum wages, actually have a better local economy, with less jobs lost and less foreclosures than other parts of the country with lower min. wages
I agree with Gatlin's theory stating a rise in minimum wage will make it plausible for the american worker to attain most, if not all, necessities of life. On the other hand, I do understand Sabbarese's point made that this change will lead to cuts in employees. Ironically, the rise in minimum wage will increase the amount of "Consumer Spending," thus boosting the economy, ending the recession, which eliminates the foundational element for the opposing argument.
Question: Do you believe that low wages help the economy?
Raising minimum wage would be beneficial to our society. In my opinion, people who work minimum wage deserve to live a normal lifestyle. Instead, people with minimum wage have to do more just to get by living. That should not be the case. It would help our economy if companies did not produce their goods overseas. First off, it is unethical to treat their workers. Also, it hurts our economy because we are not stimulating enough money. I agree completely with what Gatlin says. If the poor held a job at a higher minimum wage then the government would not lose money because there would be no need for welfare.
Question: How much money is enough to live a normal lifestyle? From answering that, how much do we decide to raise minimum wage?
I side with Gatlin because I believe that all people have the right to a fair living wage. Though producers may take an initial hit, it is selfish of companies to refuse wage increases solely on their fear of losing a little money on a short term spectrum. I believe that overtime an increased wage will only stimulate the economy by ultimately lowering taxes and allowing more people to buy goods and services. By increasing consumption there also must be a paralleled increase in production, which will require more jobs to form—helping battle unemployment.
Question: How much money would large companies (McDonalds, Wall-Mart, etc.) lose immediately following a wage increase? (Don’t give a value, just explain if it is a lot or a little relative to how much money they take in annually)
I agree with Doug Gatlin's idea that increasing minimum wage will help our economy. In the long run by raising the minimum wage to even $10 can provide people with enough money to have adequate. Although by doing this it will cost taxpayers more money, it will help our economy in the long run. Companies can still raise the minimum wage with out making that many cuts in cost because workers gain more motavation to work.
Question: If we do not raise the minimum wage, then workers can make enough money to support their families, then who is going to fill in that supportting role?
Do you really think that increasing minimum wage will increase how hard people work?
I don't think that increasing minimum wage would have any effect on how hard people work. What would be their incentive to work hard? They are getting a random raise for not doing anything more efficiently or taking responsibility for not learning and being skilled at something. I think raising minimum wage is rewarding people for not doing anything better and that is ridiculous.
Matt M. question: Do the business owners see direct results economically from a raise in pay toward workers?
Answer :If minimum wage should be increased the business owners would be more particular about economic growth in their businesses. Since their wage is increasing,however, the business owners would cut employees who were less productive or contributing to their business. They would see an increase in productivity from those more beneficial to the business.
Matt Gentile: The question to be asked is how can minimum-wage increase weaken the economy?
Minimum wage increase can weaken the economy by putting small businesses or companies out of business. If these businesses cannot afford to pay their employees ten dollars an hour, then they will not be able to give people jobs. This would put the business and the employers out of work, making them all unemployed. This would increase unemployment rate because there will be less positions to fill. This also includes one person doing several people’s jobs in return for several people losing their jobs.
Ramna's Question: Who benefits from wage increases, and who benefits when wages are not increased?
Those who have low paying jobs are the ones who benefit the most when wages increase. Those who have high paying jobs are the ones that benefitwhen wages are not increased because they are still making money money then those working on minimum wage.
Marina's question: Would raising minimum wage for the least skilled workers encourage people to skip college and go straight to work?
Answer: Not necessarily. A higher minimum wage would attract more unemployed people to the labor market, increasing competition for jobs. In order to get ahead of the competition, these job seekers would want to go to college, resulting in increased college enrollment.
Ellie O'C said...
Do you really think that increasing minimum wage will increase how hard people work?
I do believe that increasing minimum wage will make people work hared. This is because if a person is poor and trying to support her family, this person is going to do evrything he/she can do to ensure their familiy is well off. The extra money one would make with an increase in minimum wage would make the employee have more of an incentive to work. With the employee working harder, this will help the company and the family he/she is trying to provide for. It is a win win for both sides. In conclusion, employees will have more of an incentive to work with an increase in minimum wage.
Jake's Question: If we don't raise the minimum wage, then who is responsible for all of the homeless families who are barely able to support their family with food off of their small wages?
My Answer: Each taxpaying American is responsible for those living in poverty. Government programs like food stamps and welfare checks are distributed to people struggling to support themselves and their families. Supposedly, an increase in the minimum wage would result in less welfare which would mean lower taxes, but that will most likely not happen.
Matt M asked the Question: Do the business owners see direct results economically from a raise in pay toward workers?
1. Business owners do see the direct results in the form of higher cost of its employees. For example, if you have 100 workers who make $5 an hour, the cost is $500 an hour for all workers. If you increase the wage to $7 an hour, then the cost increases by $200 per hour. This will be felt by the business owners. The owner may be forced to lay off people or increase the price of the product their selling.
Briggs Question: What would happen to families who are working two minimum wage jobs and trying to support a familey. How would they be able to feed and shelter their familey with such a low price of minimum wage?
If a family has two people working at minimum wage then this would put their total salary over the amount needed to live on. I agree that the minimum wage is too low but raising it to $10 an hour would still not provide these families that Briggs is talking about with an amount suitable to live on.
Workers benefit from wage increase, but employers benefit when wages don't increase
Ellie asked "What does that say about America and our achievement ideals if we agree to pay people who have not taken time or effort to master a skill more money?"
Answer: I believe it does not play a major role in thoughts on America and our achievement ideals. Let's say we make minimum wage $10. A person working 40 hours a week, every week, for 12 months would make approximately $20,800 before taxes. An educated person, with a Bachelor's Degree or higher ranges from $27,750 to $90,502, which is very much higher than the person who makes minimum wage. So in turn we are not trying to freely give money to those who have not earned it, we are trying to pay people a living wage. A question in response to this one is What does it say about our morals, if we don't pay employees a living wage?
John Rafferty's Question: Do you really think that increasing minimum wage will increase how hard people work?
Yes, increasing the minimum wage will increase how hard people work. As the minimum wage goes up jobs become not only more scarce but more valuable. For example, CEO's and bosses of companies may stop hiring or even start firing due to minimum wage causing jobs to become more appreciated. Employees and the working class will start putting in more of an effort to lock their position and be the one to benefit in the wage increase
Ramons question: Who benefits from wage increases, and who benefits when wages are not increased?
The people who benefit the most when wages are not increased are the middle and upper class who hold a solid job way above minimum wage. They benefit because they keep making money even though the lower class is not. The people who benefit from the raise in the minimum wage are the lower class not making the wages like the middle and upper class who have a steady, well paying job wether or not the wage is increased or not.
Ellie O'C: "What does that say about America and our achievement ideals if we agree to pay people who have not taken time or effort to master a skill more money?"
A: It says that we are ethical and compassonate. We realise that not everyone has the opportunity to go to collage or their circumstances do not allow them to have the time to master a skill. For example if someone has to support their family as soon as they get out of high school, on a minimum wage job, the will not make enough with one job to support their family. Let alone take time and go to collage.
John Rafferty's Question: Do you really think that increasing minimum wage will increase how hard people work?
Yes. Increasing pay toward workers will increase loyalty and productivity over time. If workers are being paid more, there is more incentive there to work harder. Ca$h is a universal incentive to get people to work harder, and if it is used even in regards to minimum wage, workers will hold jobs for longer periods of time and, like earlier stated, grow in trust and productivity.
Dillon asked the question: How will families in poverty ever be able to support their families basic necessities if they cannot provide so while still working two jobs?
Because many do not have the financial ability to live comfortably and support themselves and families, many rely on welfare to get by. Though, a necessary program, America should work to minimize the amount of people on welfare and the amount of money that people need. Raising the minimum wage is a great way to start this process.
Question: Do you really think that increasing minimum wage will increase how hard people work?
If the minimum wage is raised to ten dollars, then there will be some people without jobs. The way to decide whether a person should be fired or kept is based on productivity. If a person realizes that they might be fired, they will work harder. Companies don't want to pay someone ten dollars an hour to do average work. They can find someone else to work for the same amount of money, but be more productive.
John Rafferty: "Do you really think that increasing minimum wage will increase how hard people work?"
I believe that by increasing minimum wage, people will be forced to work harder. Workers might intentionally think that because there is a minimum wage that they do not need to put any extra effort in their job. However, businesses will feel the cost effects and might need to cut jobs, so worker must work harder to keep their job.
I agree with Doug Gatlin that the economy would be better stimulated by an increase in the minimum wage. Not only would it provide for a better life for those working on minimum wage, but it would put more money back into the economy like Gatlin states. Furthermore, his points about employee loyalty and less employee turnover are great insights to the benefits of raising the minimum wage for the employer.
Q: Why would a lower minimum wage (less money for everyone involved) be at all favorable to the worker?
Question: Would raising minimum wage for the least skilled workers encourage people to skip college and go straight to work?
Answer: I believe that the least skilled workers are in the position they are in because they were not afforded the opportunity to attend college for whatever reason (principally money). So, the least skilled workers are those who generally have no education and lack the resources to find any other jobs that are higher paying than minimum wage; this leaves a huge hole for the worker to get out of to even think of saving enough money to go to college. I believe that no matter what the price of minimum wage is, if any least skilled worker was offered a chance to attend college and better himself/herself in the long run, no one would pass that up.
I asked, How much money is enough to live a normal lifestyle? From answering that, how much do we decide to raise minimum wage?
1. I was curious and found out. Economist say that anything below a salary of $20,000 is poverty. $30,000 is considered broke and $40,000 is enough to live comfortably. That is the answer. The yearly salary has to be $40,000. so a salary of $40,000 equates to a monthly pay of $3,333, weekly pay of $769, and an hourly wage of $19.23. Boom Baby! I am a genius because I just solved a problem that the government could not. Ha
Q: Who benefits from wage increases, and who benefits when wages are not increased?
A: The people who benefit most from a raise in minimum wage are the people with low income who are having a hard time making ends meet. The employers benefit most when minimum wage is not increased because they do not have to give up as much money to pay their workers. And when wages are not increased those who have an income in which they do not struggle to live a basic life, are not affected as much as others.
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