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
58 comments:
Yes I am in favor of raising the minimum wage. It would not only benefit the people working but the economy.If people were paid a living wage they wouldnt need to depend on welfare and thus helping out the economy. Also they would spend their money into the economy. In todays economy many people are not spending to much money because they do not have any money to spend. People that received a 70 cent increase were still dependent on well fare. The minimum wage is not enough for people to live on and support their families.
Q: If you are not in favor of raising the minimum wage how would you help those receving just the minimum wage and welfare because it obviously is not enough to support families?
I am in favor of a minimum wage increase. Although the article states that people will still be on welfare regardless of the minimum wage increase. However, keep in mind this is after only one wage increase. Over time, after more laws pass and the minimum wage becomes higher, workers may have enough money to pay their bills, get off of welfare, etc. It is a long but effective process in my opinion
Q: Do you thing that a raise in minimum wage is a short term way to help those on welfare. If not, what other options or solutions do you have?
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 believe that the minimum wage should be increased because it will help the economy. Welfare and the government are paying poor families so much of our tax payers money. It would be much easier just top raise the minimum wage to $10 dollars.The businessman’s fear is that raising wages will hurt their business or put them out of business but this is not true at all. The current minimum wage is just not enough to support someone, let alone a family.
Q: How do you propose these people get enough money to live while not working extremely long hours or taking multiple jobs?
I am in favor of raising the minimum wage. Many people are not able to live a very basic life on the amount they are making off of the current minimum wage. Gatlin says, "Millions making minimum wage still need welfare, housing assistance and other government money just to survive." This proves that welfare is not enough and it needs to be raised if people do not want to pay higher taxes or contribute to the homeless/poor. Increasing minimum wage would also increase the cash flow in the economy. Sabbaree says,"...a higher minimum wage presents a set of problems at a time when many industries are facing sharp drops in demand and prices." We had learned that if peoples' incomes increase then there will be an increase in demand, thus stimulating the economy again.
Q: If you do not find a raise in minumum wage as a solution to the problem of poverty what other ideas do you have? What makes that idea better than the proposition of an increase in minimum wage?
I am in favor of raising the minimum wage. It would benefit the economy because the higher paid workers would spend more which would stimulate the economy. The government would also save money on welfare because workers would need less money if any. People deserve to be able to make enough to support themselves and minimum wage is too low right now for that to happen. Raised wages would also ultimately raise work quality because workers would be more loyal.
The Question: If you do not believe in a raise minimum wage, do you believe in hard workers not being able to make ends meet?
Yes, I am definetely in favor of raising minimum wage. It would benefit our economy and help to shrink the gap between the business and corporate owners and the working class. It would improve relationships between workers and company owners, which could benefit these companies in the long run. A higher minimum wage would also allow more people to live normal lives and not have to work two jobs and sacrifice time with their families. A raise in minimum wage could potentially boost morale in throughout the country and help us get out of the recession.
Question: If you don't believe in raising minimum wage, what other options does our country have to help those, that do have jobs, make ends meet?
At the moment, I believe that the minimum wage shouldn't increase. Because we are in a recession, an increase in minimum wage would increase costs of businesses which decreases profits. Therefore, businesses will cut jobs to decrease costs. As a result unemployment will increase. Also, inflation will increase because everyone has more money and prices will hit an equilibrium greater than it currently is. I agree with the second article when it mentions that "policy-makers should consider less market-ntrusive policies, such as income subsidies, as an alternative for maintaining a livable wage." This is not to say that an increase in price floor of the minimum wage would be effective in the future.
Q: What if everyone had more money? Wouldn't prices increase causing the poor to still be poor?
A minimum wage increase would most likely be beneficial to the well-being of society, not only rich but also poor. Living without welfare will require a lot more than just a 70 cent increase. Employers need to realize that paying a higher minimum wage will benefit their companies, as the article states there will be less employee turnover and overall increase the loyalty of a worker to his or her company.
Q: What is an alternative for the poor, or lower income families, to pay for not only housing but all other necessities if the minimum wage is not increased?
I am in favor of raising the minimum wage nationwide to at least $10 an hour for any service. When you take a wide view of the situation, it's quite clear that the equivalent amount of money that could be added to the lower class' minimum wage is being taken by taxes for welfare anyways. That being said, putting that money in the hands of the poor would stimulate the economy to some in degree through the increased purchases for necessities by the lower class, and a reduction in taxes for the middle and upper classes. In short, I support an increase a rise in minimum wage due to its benefits for the lower class and the long term benefits for the upper classes, despite immediate fears of losing profit to the workers.
Q: Is it not self-contradictory that one can want to lower the welfare taxes and support fellow Americans and yet ignore a solution that would reduce said taxes significantly and benefit the underprivileged?
I am in favor of increasing minimum wage. It will give many benefits to society. when minimum wage increases there will be more money that can be spent on consumption. Furthermore, increase in minimum wage will promote better relationship between workers and corporations and that will increase productivity since workers will work harder and will not quit easily. lastly, it will make economy with high consumer spending.
Q: What is other way to promote economy and what can be long term solution and what can be short term solution?
Minimum wage should not be increased. Companies try to make as large of a profit as they possibly can and unfortunatly unskilled laborers suffer the greatest due to a low minimum wage. If our country's economy, and the world's economy was in better shape, then i would say go for it, increase the minimum wage. Unfortunatly at this time it is not a feasable option. Although I do underdtand the theory that giving people more money increases the amount they sell which generates a type of economic stimulus people often cannot justify were this extra money is coming from. If companies wanted to pay their workers more in this ecomomy then they would have to hire less workers because they could simply not afford them.
Q: The reasons for raising the minimum wage were subjective at best (people being more productive, family time etc.) is their any proof that in a week economy raising wages and laying more people off strenghtens an already struggling economy?
In my opinion, raising the minimum wage is a good choice. If people who actually have jobs get paid living wage then maybe the government can spend more welfare on the homeless and people who can't even get a job. Even though it would be a tough thing to raise the minimum wage it maybe be beneficial to our economy and to families so they can support their children instead of getting two or more jobs. The employees though should also earn that right in some cases. I know what working is like and not getting paid enough. I know if I worked my job full time and lived on my own I wouldn't be able to get by.
Q:If the minimum wage doesn't increase and the government continues giving welfare to people who have jobs and work hard (as opposed to just giving living wages), how do you expect people to go out an actually get jobs instead of living off welfare?
I believe that the minimum wage should be increased. By raising the minimum wage low-income workers would be able to have a higher quality of life. More importantly, they would spend their new money and boost the economy, helping it bounce back from the recession. This market-wide increase in spending would make the damage done to businesses who have to pay their workers higher wages worth it. Raising the minimum wage would also help the economy by decreasing the amount of people on welfare; freeing up the government to spend our money in other ways that help the economy. Increasing the minimum wage is a win-win situation because it helps both individuals and the economy as a whole.
Question: How do you suppose people making minimum wage support themselves without and increase in minimum wage or incurring a cost on taxpayers?
I think minimum wage started off good because it ensured that people were not completely taken advantage of. With that said, I agree more with Don Sabbarese and believe that minimum wage should not be raised at this time. He argues that raising the minimum wage will lead to more unemployment and I completely agree. Many companies are struggling now and increasing minimum wage will just add to that struggle. Also, raising minimum wage (increasing income) will increase demand and therefore the prices of many goods will increase as well. Therefore, we will just end up where we started.
Question: If minimum wage is raised now, [eventually] how will we know when enough is enough?
The minimum wage should not be increased right now. The economy is in such a way at the moment that the employers are having trouble running their businesses with the current minimum wage. The article states that businesses in highly competitive markets usually cut their labor costs in order to survive recessions. If they had no choice but to raise these labor costs most of the businesses would flounder. Also, if the minimum wage were increased, it would discourage people from working hard to better themselves and move on to higher paying jobs. Sabbarese says that minimum wage raises can even lead to more unemployment in economic times like ours. Even though it would be nice for the low-wage workers, raising the minimum wage is not the best reality for our current economy.
Q: How would you help the business owners (even the small business owners) and companies who would hurt by an increase in the minimum wage?
I think it will contribute to a “powerful economic stimulus” if the price floor for the services of minimum wage workers is raised to somewhere around $10 an hour. In my opinion, it is more reasonable that the “unskilled” worker be paid something closer to a “living wage” by his employer rather than the taxpayer pitching in to provide welfare payments. Finally, increasing employees’ wages is sure to “improve loyalty and productivity,” causing an increase in total revenue in the long-term.
Q: Do you think it is right that minimum wage workers should have to be dependent on taxpayers and the welfare payments they fund?
I feel that the minimum wage should not be increased at the current moment, because the entire global economy is in the middle of a recession. If the minimum wage is raised then many companies will go out of business such as hotels and restaurants as was eluded to in the article. Plus 24% of the unemployed workers are teenagers who are 16-19 years old. These teenagers are most likely having a job, because they want money for gas or to go out on the weekends and buy luxurious items. The reason they are unemployed is because they could not perform in school while working a job, they are too busy at school for a job, or they were fired for not being able to work the appointed hours. For the single mother scenario, the government should step in temporarily and give her some subsides as the second argument talked about. Once the recession is over, the minimum wage should be raised to as close to living wage as affordable for the company to stay afloat. If the minimum wage does not increase, the employer will be paying for it later on through his taxes since his employees are on welfare.
Q: What should the government do to help these people who are earning minimum wage besides raising the minimum wage?
In my opinion, I think that minimum wage should be increased. This increase, even if a small one would help support families living on less of an income than others do and help them in leading a life with even the basic necessities. By raising minimum wage, less and less people would have to be welfare, boosting the economy by allowing the government to spend their money elsewhere. Therefore, not only would an increase in minimum wage be beneficial to the individual but also everyone taking part in our economy. If this rise in income takes place, taxpayers would not have to pay more to help the poverty level, and the money flow of the overall economy would pick up, hopefully kick-starting an end to this recession.
Q: If you are in favor of not increasing minimum wage, how do you suggest we help the poverty level with a long term-effect and not just a short- term effect?
Yes i think raising the minimum wage is a good idea as it will take the stress off the welfare system and pump vital dollars into the small local economies where working class families live. If you raise the minimum wage then the families who earn it can lead a more comfortible life and eliminate alot of the hardship for them
Q- If you dont raise minimum wage how will you take stress off the welfare system and lower dependency on it?
I am in favor of raising the minimum wage. Not only would it help the people working but also the economy. You need at least 16 $ an hour just to pay for a one room apartment. Thats already more than minimum wage.
Q. How would you help the peoples' families that are living on minimum wage
I am in complete agreement that there should be an increase in the minimum wage. Certain necessities in life, such as housing, are basically impossible to afford on the current minimum wage. Gatlin states that a single apartment would cause the need for one's income to be atleast $16. The new increase would boost the economy since the money would simply run back into the market anyways. Although an increase in income may not take all off of welfare, it still allows those living the minimum standards to increase their way of life. This increase would also allow the government to stop spending so much on welfare and focus on other parts of our society which need help.
Q: If the government wishes to continue to leave the standards of minimum wage as it is, what are their other plans to fix the poverty level of our country? Are there any ways to increase minimum wage without negatively affecting businesses?
I believe that raising the minimun wage would benefit both these workers and many businesses. With a higher wage, the workers would be more loyal and productive, which would most likely increase revenue for many businesses. Also, this increase in minimum wage might help the economy as a whole because more minimum wage workers would have more money to spend on things that they wouldn't buy with a low minimum wage.
Q: What support is there that raising the minimum wage would lead to a higher unemployment?
No I am not in favor of raising the minimum wage. Although it would help some people by allowing them to make more money it would hurt a lot more people by forcing buisnesses to cut workers. Then unemployment would grow and the problem would just become worse.
Q: If you want to raise the minimum wage how would you do it without hurting buisnesses as well?
I agree with increasing the minimum wage. Not only will it help the people earning minimum wage but it will also help the economy. It was said in the article that a 70 cent increase did not help the people enough. The government still had to pay for welfare. This makes me believe that we need to drasticly increase the price of minimum for the better of the people and the economy.
Q: Why would you not be for minimum wage when it tries to give people a wage that they can live off of?
I am in Favor of increasing the minimum wage. Although increasing the minimum wage might increase the unemployment rates and limit job creation, it is the right thing to do. Increasing the minimum wage would benefit the economy and help out the people who are making minimum wage. Also, the minimum wage is below the living wage so it is not enough for people to survive without working more than one job. Not only will raising the minimum wage benefit the poor people, it will benefit all people in the economy.
Q: If the minimum wage is not icreased, how do you expect to change the poverty problem in society?
I believe that raising the minimum wage is not the solution to the economic downturn in the United States. In most cases, it would only do worse for our economy. For instance, the raising of minimum wage would only increase unemployment rates and therefore would put more people out on the streets. It's nice to think that an increase in wages would create a more "fair" society but all it would likely provide is an increase in inflation. Our economy has already entered a recession and I believe the increase in minimum wage, although sounds good, would further the dent in our economy.
If the minimum wage was increased do you believe prices of necessity goods (i.e housing, food) would increase as well?
I think we should raise minimum wage. if minimum wage is raised by 70 cents people still cant afford welfare. I think we should make a dramatic increase like 3 dollars. If we raise it then the workers will buy more products and that company will gain more money and then maybe the economy will be stable again.
There are other things beside welfare an average worker needs that is why it should be raised dramatically. We should make sure people are living normal life instead of struggling for ends meet
Responding to Jennifer's question, I would have to say that a gradual, but small, increase of minimum wage would help us navigate to an appropriate amount that could stay consistent for decades to come. I don't think raising minimum wage drastically would be a very smart decision, since it could cause an even worse situation than the situation we are in already. As our government starts to see the affects of each slight increase, they would be able to make a more educated assumption of what will happen if they continue to increase the value.
Responding to Jack's question, I do not think that the prices of necessity goods would need to increase. Raising the minimum wage would give more money to people, thus making it so they had more money to spend. If people spend more money, the economy will be fine because the cycle of people buying and selling will be fine. Prices will not need to increase because businesses will be making more money anyway.
In response to Tim's question, there would probably be many ways that the government could benefit minimum wage earners without the increase of the minimum wage. One possibility would be a decrease in tax by annual salary, i.e. if you're earning less than $50,000 per year or a small amount, then your taxes decrease by say 10-15%. This would allow more room for minimum wage earners to meet necessities like housing, food, etc. Also, the government could maybe encourage a decrease in price ceilings to assist in more affordable living. These are just two of many possibilities in which the federal government could get involved with minimum wage options.
In response to Jack's question...
I believe that the prices of necessities will increase due to the fact that since production costs are increasing (workers wages) the total cost will increase. With that said, I do not believe that the prices need to increase. The only reason they do is because the owners get greedy and want a high profit. Buisnesses will not go out of buisness, their owners will just have to take a small cut in pay. Overall, with the raise of minimum wage many more people will buy products and some buisnesses will start to gain profit, eventhough they took a cut in pay to begin with.
Responding to Jack's question, the prices of neccesary goods would not go up. A raise in minimum wage would not increase the price of such goods because it would just reduce the amount of welfare required for the workers. In theory the welfare would decrease as the minimum wage increases. It would take a drastic minimum wage increase that would be big enough to make workers self-reliant. At the point of income increase now, it is not enough for a change in neccesity good prices.
In response to Michael's question....
I don't really know how to help the lower class. If there was an answer, I think the problem would have been solved by now. The only way I can think of helping the lower class is giving them a better education which will help them in the future. Also wealthier people could [willingly] donate more money to people who are not wealthy. I just think raising the minimum wage would hurt everyone in the long run.
Responding to Pat's question, if minimum wage gets increased; then the business can raise prices slightly to balance out the money they lose from higher minimum wages.
In response to Saad's question I think a temporary minimum wage increase is not the answer, because if the minimum wage would go up temporarily, the employers would cut the workers hours to make up for the loss in wages. If the change was a gradual one over time, the businesses would be able to plan out a more cost efficient way of running the business if they have to spend more money on wages. I think it would help if the government stepped in and gave tax cuts to those who are earning a minimum wage salary and they have to feed a family off of that low income.
In response to kevin's question: Whether or not the raise would solve the issue for welfare, even for the short term, is dependent upon the raise in income but it can defiantly be seen as short term aid and a long term solution if there is a gradual raise to at lest $10. One could suggest increased tax cuts from the lower class, but seeing how they pay little taxes already, that would fail to combat the need for welfare.
In response to Ryan's question. Hard work relates to higher pay. People on minimum wage have jobs that require minimum effort or skills to preform the tasks. Minimum wage jobs should be looked at as a short term way of making ends meet. Becoming qualified, studying and work experience should all lead to a higher paid job which requires hard work. Raising the minimum wage will only provide more incentive to those already on it not to improve and go beyond what is enough just to get by.
Responding to Jennifer's question, the minimum wage will never reach a point where it is "high" enough. Inflation will constantly change the value of the dollar, presumably decreasing its value, so the minimum wage will constantly need to be raised to say current with the value of the dollar. With this said, the minimum wage should always be set at an amount that allows workers to live at a comfortable level yet doesn't put a large amount of strain on businesses.
I believe minimum wage should be raised. It should only be raised when the economy is getting better because if a business goes out of business then there will be less jobs to take. Businesses should get on their feet then try and raise minimum wage.
Q: What can we do to help families that can not provide for themselves on minimum wage?
responding to Nick Pallela, Yes i do believe laying people off does help a weak economy. if a company tries to keep people when demand and prices are falling, and the company is running out of money. then, the company will run out of business, and not only do the people who might have been laid off before lose their jobs but so does everyone else. as more and more companies go bankrupt the economy gets exponentially worse. so laying people off might not help the economy get better, but it does stop it from getting worse fast.
In response to Jack Doyle's question:
I still wouldn't be for minimum wage because though it may give some a more comfortable wage to live off of, it still hurts others economically. I don't think the businesses should be harmed. They would be by the minimum wage increase and that would economically hurt the owners of the businesses.
responding to Jackie's question...
I believe minimum wage increase will not hurt business owners. i rather think think that increase in minimum wage will help raise productivity and it will make workers to work harder.
In response to Jack McGuire’s question:
Yes, I believe that if the minimum wage were to increase, the price of necessities would also increase. This increase in minimum wage will cause cheap, low-quality products to be replaced with expensive, high-quality products. Because necessary goods are price inelastic, change in price will not affect demand. Due to the extra money in their pockets, consumers will have a higher willingness to pay, and sellers will take advantage of this by raising the prices of necessities, increasing their total revenue.
In resoonse to Mr. Cha: Unfortunatly families earing minimum wage cannot support themselves and often struggle to make their payments. Unfortunatly increasing minimum wage would make these workers more expensive and the companoes would hire less of them. So would you rather be earing minimum wage or be unemployed?
Q: Do you thing that a raise in minimum wage is a short term way to help those on welfare. If not, what other options or solutions do you have?
yes I think the best thing to do right know is to raise minimum wage because I think it might be the only way to get out of our little deppresion. When our economy becomes stable again then maybe we should lower minimu wage a little, but make sure it is higher than before.
Yes, I am in favor of raising the minimum wage in order to help people who have no means to a better job. The people at the bottom of the economy won't need to take as much money and help from the government if the minimum wage is raised. Because of this, the middle class would grow and we would eventually have a stronger economy. Although the lower class would still be there, more and more people would start to be able to make an honest living on their own.
Question-How else can we eliminate the lower class with eventual benefits to everybody?
What is an alternative for the poor, or lower income families, to pay for not only housing but all other necessities if the minimum wage is not increased?
In response to John Forsyth's question, these lower income families can respond with hard work by working two or more jobs. Hardwork is where money is made, and using the means of work to get the end the of money is what everybody should do. Although there are some exceptions, the minimum wage should be increased to reward the lower class and its hard work.
In response to Patrick El Zoghbi's question, If the minimum wage increased that would not neccesarily mean that all of the people with higher level jobs would make more moneey too, but it would help the economy grow and develop. If the minimum raise raised up to about 15 dollars, then those workers would still be on the lower end but at least they would have enough for rent and more spending money.
In response to Kevin's question, I believe a raise in minimum wage would actually cause a long term affect to those on welfare. Of course, these changes in incomes would need to increase gradually, because a major increase within a short period of time would cause havoc on the market. Business would need to adjust in response to the minimum wage levels and act accordingly in order to not lose any of their business as well. If put into effect, this wage increase would prove beneficial to many already living on welfare.
Q-If you do not believe in a raise minimum wage, do you believe in hard workers not being able to make ends meet?
-Ryan Faoro
A: The people living on minimum wage live on the minimum wage rather it's $8 or $10 so they're going to continue to work long hours. The minimum wage increase I believe would just take away people's jobs and worsen our economy. The people living on the minimum wage can just continue their lifestyles because the raise wouldn't effect their lives and only increase inflation and unemployment rates.
I believe that raising minimum wage will directly benifit our economy by the increase of consumption. If more consumers have the ability to spend money, it will help stimulate the economy. It is said in this article that even if a person works over 40 hours a week, they still rely on welfare. If we just increase the minimum wage to $10.00, it will have a positive effect on the economy.
Q: If you are not in favor of raising minimum wage, what other solutions if any do you propose to solve this economic crisis?
Q: If you do not believe in a raise minimum wage, do you believe in hard workers not being able to make ends meet?
- Ryan Faoro
Response: There is a simple answer to this question. If the workers are already working hard, they will continue to work hard especially if the wage they are getting paid is raised. It creates motivation to continue to work hard.
Q: "If the minimum wage was increased do you believe prices of necessity goods (i.e housing, food) would increase as well?" Jack M.
Answer: No, I do not believe that the price of housing would go up after minimum wage is increased because that would be putting poor families in harms way again. It would be immoral to take more money aaway from the poor and desperate families.
In response to Patrick El Zugbis comment, no if everyone was given money then everyone would have money.No one would have to worry about the poor because there would be no poor people to worry about.
Q. How would you help the peoples' families that are living on minimum wage? - Michael cha
I would start programs and form volunteer cores to volunteer and help out.
In response to Jack McGuire's question, I do not think that raising the minimum wage will effect the prices of other common goods. People will have more money to spend on goods. This will be beneficial to the producers because more people will be nuying their products.
In response to Goerge's question about what support there is that raising the minimum wage will lead to higher unemployment. We are in a recession and many companies are already cutting costs by getting rid of jobs and if we raise the minimum wage they will have more costs that they need to cut therefore leading to more people getting fired and a higher unemployment.
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