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
52 comments:
The minimum wage is completely necessary. Doug Gatlin says that, “Millions making minimum wage still need welfare, assistance and other government money just to survive.” This is no way to live. The few extra dollars for these poor in our society would be put right back into the economy rather than being stashed in a selfish manner like the rich do. Money would be sent right back out as they buy necessities. Although companies would be paying more money for this labor, they would also be receiving more from the millions of new customers with the purchasing power to buy their product.
Question: The unemployment rate went up 4.5% to 10.7% over the past 18 months in Atlanta. Don Sabbarese says this occurred due to a rise in the minimum wage. Similar unemployment jumps happened all over the country without such dramatic minimum wage increases. Does this mean that the unemployment rate and minimum wage aren’t directly related in this case?
A minimum wage is necessary in our economy and it is a hard thing to raise. With the economy the way it is, it is hard enough to find a job. Minimum wage is a way for even the poor and uneducated to receive a steady income. In the article, Doug Gatlin states that "All major faith traditions speak about fairness in treatment of others." However, I do not think that means raising the minimum wage. What is fair is that the people who have worked hard, got an education, and have skills in the workplace are meant to earn more and have earned it through their hard work. He also states that "Paying a living wage cuts down on absenteeism, decreases employee turnover." However, when the lower class need help, money is money. They will show up to work even for a minimum wage. In our economy, the minimum wage is completely necessary. Question for opposing side: How would our country the way it is now, afford to increase the minimum wage without raising other prices or taxes?
I agree with Doug Gatlin, we need to raise our minimum wage. The higher wages people get paid, the more money they spend in the economy. Also by raising wages, people have more money to live off of. The minimum wage now isn't enough to pay bills, buy food, or support a family.
Question: What benefits come from having a lower minimum wage? Would we rather have higher unemployment or lower wages?
The minimum wage is a necessary tool for any economy. By increasing the money in people's pockets, we are increasing the amount of money they spend. Also, by having privately owned businesses provide the stimulus money, the government is saving a lot by not providing bailouts and welfare. The saying, "You need to spend money to make money," is extremely relevant. By increasing employees' wages, they will most likely improve their loyalty and productivity. The increase in income would also improve family life, which is the start to anything positive. Doug Gatlin said, "I don’t remember much discussion about strengthening families by paying a living wage. That idea, however, should be part of the discussion."
Question: Don Sabbarese said, "a higher minimum wage presents a set of problems at a time when many industries are facing sharp drops in demand and prices," but doesn't am increase in income increase demand? So why would producers be afraid to increase the wages of their workers?
Minimum wage is a necessity but to make it almost $10 an hour seems extremely excessive. Companies would be paying employees a lot more than before and that will hurt them, regardless if everyone is doing it. That being said, we must have a minimum wage which can allow the individaul to live without welfare. Minimum wage should allow for people to support themselves even if its at the most basic level. Without a minimum wage which can help mantain life, companies would ahve employees working 2 or 3 jobs, other than their own, to make ends meet. Minimum wage should be implemented so that people make enough and if people are making enough it will be better for the companies in general.
Question: How does it help a company to pay their employees? How does it hurt a company?
We need to increase our minimum wage in order to prevent people from earning an unfair or unlivable wage. Doug Gatlin mentions that in 1968 the minimum wage would amount to $9.92. In that case, we are not increasing minimum wage, but we are bringing it up to its old price if inflation is included. How has the minimum wage's value dropped about $2.50 in the past 40 years? The prices of houses and other necessities have increased beyond inflation. Why cannot minimum wage at least come close to matching it? An increase in the minimum wage would not hurt anything besides a company's initial profits, but they would soon increase due to the increase in people who can buy the item.
Question: How would decreasing the minimum wage help everyone or at least most of the people in the country?
A minimum wage is completely neccesary of a stable economy. Gatlin, which is a lot like "Gatling", projects rapid-fire truths about how minimum wage is an utter neccesity. As he says, When people have more money, taxpayers have to pay less and in an ideal situation, nothing at all to wellfare because the poor now have better means to provide for themselves and their families. If both taxpayers and the former wellfare recipients have more money, then they both have more expendable income, which goes back into the Economy. Furthermore, workers would be happier making more money, lowering the chances of strike due to unfair raises, as a raised minimum wage would hopefully be a livable ammount, making the workers satisfied ad they can properly provide for their families. Thus, a minimum wage is indeed neccesary.
I agree with Doug Gatlin because he believes that higher wages will lead to workers spending more on life's necessities. For example, minimum wage earning families would potentially have extra money to purchase food, new clothing, and perhaps bigger ticket items. This in time will contribute to the nation's economic growth. Also increasing wages would save money on welfare payments and savings which would be great for government spending on education and infrastructure. Where will you get the money to subsidize people as an alternative to increasing the minimum wage?
I believe that the government should raise the minimum wage. One of the reasons is because it is unfair for the workers because some work two jobs and get little to no sleep each night. Even after doing this they can barely pay their bills. Also raising the minimum wage will increase worker productivity and happiness. If companies cannot aford to pay an extra $2 to low wage workers than they have more problems than wages. Finally by increaing minimum wage it would stimulate the economy because the recipients would put the money back into the economy. Just like Mr. Gatlin says,"It would be the right thing to do." A question to the opposing is if you keep the minimum wage how will you help the low wage workers who are not able to pay bills and debts?
The minimum wage is a necessity in the American economy. That being said, it is also a necessity to raise the minimum wage so individuals can sustain themselves and their families. Gatlin pointed out, "Because the employer, who works them for his profit, doesn’t pay them enough to live on, you and I have to pitch in." This is important because raising the minimum wage not only affects the individual providing the service, but everyone else paying to essentially support their livelihood. Make the minimum wage a reasonable amount of money that individuals and families can live on; it's ethical an ethical issue as well as an economical one
Question: Won't raising the minimum wage create a greater incentive to get a job rather than living off government subsidies?
I think that Gatlin is correct in wanting an increase in minimum wage. If people cannot live independent of welfare while being paid minimum wage, then it should be increased. This would not only put more money back into the economy as they would be able to spend more, but it would also reduce the tax burden on those who are forced to help pay for welfare.
Question:What, if any, economic benefits are caused by a lower minimum wage?
I believe that minimum wage is absolutely necessary. The first lines to the article say, "If minimum wage earners were paid a living wage, they would spend it in the local economy — a powerful economic stimulus." If people made more money, they would put more of it back into the local economy. Also, it says that "millions making minimum wage still need welfare, assistance and other government to survive." It doesn’t seem fair that people are doing hard labor and not getting paid enough to make a living. A small but essential increase in minimum wage would help these people have a better life. Ultimately, is this what all people want-to help others?
Question- Is it one's responsibility as an American to help the less fortunate through paying more money for income tax in order to raise minimum wage?
I agree with Doug Gatlin, i believe a minimum wage is necessary in our economy. It gives people that are less fortunate, a chance to make money. Also, raising the minimum wage would give families more money to spend on everyday needs. It would stimulate the economy and it would help to bring us out of the economic recession. It is true that companies would be losing money by increasing the minimum wage, but aren't they already making enough money through products they sell or services they offer?
Question: How would raising the minimum wage restrict buisness owners?
I agree with Doug Gatlin in saying that minimum wage should be increased. Even with minimum wage, people still need welfare. It is unfair that we have to pitch in because employers work for their profit. The idea that “businessman’s fear is that raising wages will hurt their business or put them out of business” is not true. “Paying a living wage cuts down absenteeism, decreases employee turnover, saves retraining costs, improves loyalty and productivity, and it could also increase sales”. This is the right thing to do so people can live better and because it is fair.
Question: Does the decrease in minimum wage really help out the country?
Gatlin made the sound of raising the minimum wage very appealing. In fact, I don't remember reading any downsides of doing so. But, I don't think that raising the minimum wage would fix problems that cut and dry. I'm sure if only good came out of raising the minimum wage, then it would have been done a long time ago. There's a side to the story that I haven't heard, and it has to be an integral part as to why the minimum wage is at what it's at right now. He also mentioned how raising the minimum wage is the right thing to do. Really? People are not going to pay their employees a certain amount because of their morals. This is a capitalist country, and people are here to make money. Some will succeed, and some will not.
question: how would an increase of the minimum wage decrease unemployment?
The minimum wage is essential for many people's survival. So, as the price of goods increase in order to survive a rise in income needs to occur. Doug Gattlin discusses how, In Atlanta, it takes around $800 a month to get a one-bedroom apartment. If you only spend one-third of your earnings on housing, which is the recommended amount, you need to make $16 an hour to afford that apartment." Without an increase in minimum wage, how are these people expected to survive? They barely make enough money to live in an average apartment, and must be cutting out other expenses to make mends meet. If an increase in minimum wage were to occur, they would be able to more easily pay off their apartment bills and then spend the excess money on other goods. This would lead to more money flowing through the market, and then more demand and more jobs. It's a win-win situation.
Question: Even though people may not morally feel obligated to pay their employers more, isn't it true that if society is telling them to they will?
raising the minimum wage is completely necessary. people who are paid minimum wage do not have enough money to survive on and raises the taxes of the rest of the country. with people receiving higher wages this money is then pushed right back into the economy because the poor would now be able to purchase goods and be productive in the economy. the minimum wage that people are being paid today is not enough for a single person to rent an apartment, buy food and other necessities while working a 40 hour week. this needs to be changed for the better of the poor people and the American Eeconomy.
question:would raising the minimum wage really attract more business for companies? wouldn't they be making less profit and business going down?
Doug Gatlin made raising the minimun seen flawless and like a good idea with his good comments and arguements. His main arguement was if the mininum wage was increased people affected by it would put it back into the economy proving to be a powerful stimulus. But these ideas would greatly affect those small companies and those companies which are already stuggling paying their employees. So it wouldnt necessarily be a positive thing. Overall raising the minimun wage would be a bad idea because companies are already trying to cut costs and already laying workers off due to the slow economy. Raising the wage would just make the problem worse and not be and economis stimulus. Sabaresse said that competitive industries such as fast food and many others will have to find short cuts other than wages to get the competive edge which will create even more problems than we already have Question for the opposing side: How could our country afford to raise the minimun wage with business already struggling to pay the minimun wage we have now>
The minimum wage should be increased because people are not making enough money to live off of making under $10 an hour. Gatlin said businesses worry that raising the minimum wage will decrease their business, but it is more likely that it will increase business. The average person will have more spending money due to the raise in minimum wage, and the employer could employ less people and allow each employee specialize in their job. People will be more productive and aid will not be needed for people if they make more money.
Question: Doug Galtin says, "Because the employer, who works them for his profit, doesn’t pay them enough to live on, you and I have to pitch in." Is it fair that hardworking people have to "pitch in" money to people who are improperly paid by their employers?
Increasing minimum wage will in the long run decrease unemployment. By raising the income of workers, they will purchase more goods, which will increase business for producers, leading them to expansion, providing more jobs, decreasing the unemployment.
Minimum wage is necessary and a raise in it would help the ecomony. Though some may believe that raising it will put more workers out of jobs, by putting more money into the economy, these workers will increase the demand of normal goods and this would cause the economy to improve and be able to supply more jobs. The economy needs to be worked from the bottom up so if the minimum wage is increased, more money may be put back into the economy and it will start affecting and improving the top.
Question: With no wage increase, how could workers be expected to raise their standards of life and further support themselves?
Response to Sam Moser:
Though it may be difficult for employers to be able to pay for raised wages of their workers, it is necessary for their future advancement. Taxes or extra fees may need to be temporarilly raised but it is a small price to pay for an improved economy. But in order to increase wages without raising prices or taxes in other areas, employers may take money out of their extra expenses and luxuries they have.
I openly believe that minimum wage raises will help the economy. As a guy working, i know how hard it is to earn a couple hundred dollars when the government keeps taking my money thru income tax. I feel that everyone who works would be more inclined to spend when they have more money. I know i would. What are some ways subsidies could help workers?
Caroline Wright said, "Is it fair that hardworking people have to "pitch in" money to people who are improperly paid by their employers?"
Your question implies that the underpaid are not hardworking, but I'll answer how you frased it. A society that leaves out the vulnerable like these underpaid is heartless. What if it was you in that situation. If you were stuggling to get by then you wouldn't care where you got the money even if it was from other taxpayers. So yes, I think it's fair that they get these handouts.
James Conway asked: "What, if any, economic benefits are caused by a lower minimum wage?"
I do not think that the minimum wage should be lowered but I also do not think that our country can afford it being raised. With the country and economy the way it is, our taxes cannot afford to be raised in order to pay higher wages. With the lower minimum wage, our country will not feel the need to both raise taxes and prices of products.
James Conway question asked: "What, if any, economic benefits are caused by a lower minimum wage?"
Personally, I don't think that there will be many if any economic benefits. The average consumer would be earning less money, due to employers not being forced to pay them a certain price for their work. This would lead to less spending of money, which would lead to less money flowing through the economy. It is a chain reaction where if one thing goes down, everything will go down. Lowering or even getting ride of minimum wage would be a disaster.
Minimum wage is a must in todays economy. Families with either one parent or both parents working at minimum wage would not be able to afford life's necessities. How could a family making minimum wage support a child let alone more in most cases? In the article Gatlin even talks about how an increase in minimum wage would not affect the companys' as much as they think.
To answer Matt Prorock's question, I think that even though an increase of income in the workers would end in increased demand, there is no guarentee that the workers would use their new income on the products that their companies provide. Therefore, if the workers donot spend their new found income on company products, the company will be worse off, as they are using more money, while not receiving any more.
James Conway asked "What, if any, economic benefits are caused by a lower minimum wage?
One benefit I could see is that buisness' would gain more money. Then with a trickle down economy, people in the middle class and lower class would then have jobs and they would buy products. This would be an advantage for the rich and it would also give people jobs.
"How would an increase of the minimum wage decrease unemployment?"
Increasing minimum wage would be a great incentive to get people back into the job market. Some individuals see the minimum wage and decide not to take the job because welfare offers more money to live on. This is economically wrong, people should get payed ore at their job than by government subsidies. Raising minimum wage would be a great benefit to those who need it and those who don't.
grace robertson said: Question: Even though people may not morally feel obligated to pay their employers more, isn't it true that if society is telling them to they will?
i would disagree with this because most consumers do not worry with how much the workers are paid. the main concern is the quality of the good and its price. not many people will boycott purchases of goods if the workers aren't being paid enough, unless it was drastically low. finally individual businesses will not suffer from a few less purchases if they are paying workers less because their profits will be higher.
Question for the opposing side: How could our country afford to raise the minimun wage with business already struggling to pay the minimun wage we have now>
This is a good question because its true that some companies would have a lot of difficulty in paying more to employees. The bottom line is that they would need to let some employees go. This sounds like a bad idea but not very company would have to let people go. The companies who would were probable employeing individuals with other jobs too and if everyone has to raise their minimum wage then the inidividual will end up making sustaiable income elsewhere. There would obviously be problems for some companies in rasing the wage, but by doing it those who were working would be much better off.
While raising the minimum wage might seem like the morally right thing to do, it is probably not such a good idea to raise it so much so fast. In this poor economy especially, many small businesses are already struggling to stay alive. If they are forced to pay their employees more for the same amount of work their existence would likely be threatened. It is hard to argue against passage of a bill that would help many Americans in the short term, however we need to consider the future of these employees. If businesses died out because of an increased minimum wage, so would the jobs of these Americans.
Question: Can you think of a way for a higher minimum wage to be implemented without hurting small businesses?
Jake Robinson-Lieberman said...
question: how would an increase of the minimum wage decrease unemployment?
With an increase in minimum wage there would be a decrease in unemployment because people would have a higher incentive to get a job knowing that they are getting paid more. Jobs will be more appealing and people will be more motivated to work harder if they know they can make enough money to no longer need welfare to support their family.
Response to Kirby Kenny's Question
Question: How would decreasing the minimum wage help everyone or at least most of the people in the country?
Answer: Decreasing the minimum wage would not help everyone in the country. Keeping the minimum wage as it is would likely help many though. You mentioned that increasing the minimum wage would help companies in the long run because more people would be able to purchase more items from the companies. This is true depending on the type of company, however there are many businesses that this does not go for. You argue that these people need a higher minimum wage to pay for necessities such as housing and food. This is exactly true, they will be spending their money on housing and food not on luxury items. Therefore the companies that produce luxury items will be hurt in the short run and the long run.
If the minimum wage is increased, many smaller businesses will likely go out of business and people will lose jobs. It is helping the people to keep the minimum wage the same because people are better off being payed 8.25 an hour than nothing at all.
Jake Robinson-Lieberman said, "how would an increase of the minimum wage decrease unemployment?" By raising the minimum wage, the workers will be given more money which turns into a sort of stimulus for the economy because there is a new wave of workers who have spending money. This extra money coming into the economy will be put right back into the businesses that were effected. Also It will still foster capitaslism, because the people with the spending money will choose where and how they will spend it and that is what companies will jockey for.
My Bad I forgot my question. Why should lower class families who work just as hard as anyone else be punished by not being able to afford basic life necessities?
Response to Matt Palella:
"Won't raising the minimum wage create a greater incentive to get a job rather than living off government subsidies?"
While raising the minimum wage might be an incentive to get a job, I do not think that the high unemployment rate is because of a lack of interest in working. The problem is that there are not enough jobs to go around. People would like to find jobs, but are unable to. For this reason, we are trying to take on this problem by creating more jobs, not by changing the wages of the ones that are already available, or in this case, not available.
Mac asked how a company would be helped and hurt by an increased minimum wage. I think it would be hurt because obviously supply would decrease due to an increase in input cost. But I think the benefits such as increased worker loyalty, incentive to better work, better employee attitudes, and the ability to put money back into the company with their wages outweigh the costs of raising minimum wage.
Response to Jake Robinson-Lieberman:
" How would an increase of the minimum wage decrease unemployment?"
Initially, perhaps it would cost companies more to pay the increased wages but in the long run, less taxes would have to come from the companies when less additional welfare would have to be subsidized by everyone. Greater job retention would be made possible because these low wage earners would have an incentive to stay with a company. Less money would be spent in hiring and training new employees for the same job. When employees are paid more, they work better and will spend their cash to purchase more things they need. This will stimulate the economy because more people will be needed to work to produce, transport and sell items. Welfare will be decreased as employment is increased.
By increasing the minimum wage, workers will receive more money to spend within the economy. This extra money spent will eventually reach back to the companies and help their business. The unemployment rate isn’t caused by the higher wages. Because of higher wages, people are able to spend money on normal goods. Once the economy is stimulated by the increase in demand, companies would need to increase their work force. Thus increase in minimum wage would then increase the employment rate.
James Conway asked, “ What, if any, economic benefits are caused by a lower minimum wage”. One benefit is that companies have more money. With this money, companies have more capital to spend on more important peoples jobs, or new improvements for the business that could potentially expand its resources or expand the corporation.
To robinso-lieberman: A rise in minimum wage would decrease unemployment by giving consumers more spending power and therefore give companies the profits needed to increase worker.
Response to Sam Moser's question:
Despite the way that our country is now, we need to increase minimum wage in order to make future developments. By increasing taxes slightly, we can make a difference in people who are busting their tail to make a living. These taxes should be merely temporary and ultimately help the market economy run better in the future. One way to increase minimum wage without raising prices or imposing taxes is for the business could cut back on other input cost and other components relating to supply.
Response to Sam Moser's question, How would our country the way it is now, afford to increase the minimum wage without raising other prices or taxes?
A raise in the minimum wage may hurt small business at first, but the large corporations will not be losing that much from their profits. Prices may, also, initially rise but will lower in time. Taxes, however, should not be affected at all because the government will receive more from the income tax. The demand for items should increase if the minimum wage is increased because more people will be able to buy more things. This will drive prices down eventually when the companies want to sell more products.
Riley LEnnon___Question: How would raising the minimum wage restrict buisness owners?
Raising the minimum wage would restrict business owners in many ways. One of the biggest ways is that it would force business to cut costs somewhere else because of the increase of money need to pay works. We would begin to see business taking short cuts that we won't notice but could be detrimental. It will increase prices even more and lessen demand and also force people that no longer can afford things to find other substitutes.
Riley LEnnon___Question: How would raising the minimum wage restrict buisness owners?
Raising the minimum wage would restrict business owners in many ways. One of the biggest ways is that it would force business to cut costs somewhere else because of the increase of money need to pay works. We would begin to see business taking short cuts that we won't notice but could be detrimental. It will increase prices even more and lessen demand and also force people that no longer can afford things to find other substitutes.
I strongly believe that the minimum wage is a necessity in order to stimulate and maintain the economy. If the minimum wage were to be raised, it would be a win-win situation for the employer, employee, and the economy. According to Doug Gatlin, if employers were to pay a higher minimum wage, they would actually profit more than keeping a lower minimum wage. This would occur because they would get more production and loyalty out of their employees, save money on not having to train new employees, and if multiple companies begin raising the minimum wage, it would increase sales for all companies which would also help boost the economy.
Question: How will companies who try to market their product to people of lower income profit if all companies refuse to pay a higher minimum wage to consumers who want to buy their product but cannot afford it?
Question from Peter McGuire: Would raising the minimum wage really attract more business for companies? wouldn't they be making less profit and business going down?
Answer: Companies would actually make more profit and attract more consumers by raising the minimum wage. This would occur because they would get more production and loyalty out of their employees, save money on not having to train new employees, and if multiple companies begin raising the minimum wage, it would increase sales for all companies because consumers of lower income would have more flexibility with their money.
Sam Moser's question. Question for opposing side: How would our country the way it is now, afford to increase the minimum wage without raising other prices or taxes?
The country would have to lower taxes in order to increase minimum wage. However just cutting the taxes by a small margin would help out a ton for the country. Ceo's on walstreet do not need to be making 20 billion a year. If they were to be hit with a small price increase for the minimum wage i think they would be fine. So what if they can not buy a fourth yacht.
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