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The effects of raising the minimum wage in the united states

Calculating Wage Increase Effects What is the federal minimum wage? Is the minimum wage too high? In 2009, the U. Should we raise the federal minimum wage? He said this would improve the U. Opponents of this change point out a Congressional Budget Office report which says this wage increase would the effects of raising the minimum wage in the united states half a million people out of work. So far, 29 states and several urban areas have set minimum wages higher than the federal minimum, typically to address higher-than-average costs of living.

Conversely, five southeastern states have not set state minimum wages. Which employees qualify for FSLA exemptions? This exemption does not apply to manual laborers and public service workers like police officers, firefighters, and EMTs. However, it can apply to many white-collar workers.

Salaried employees like executives, administrators, highly-trained professionals, and computer programmers as well as outside salespeople may qualify for FSLA exemptions. Pros of a Higher Minimum Wage Raising the minimum wage on a regular basis helps families keep up with price inflation. Putting more money in the hands of people who will readily spend it helps the economy.

Increased wages and spending raise demand and create more jobs. Lower unemployment and higher wages increase tax revenues. Cons of a Higher Minimum Wage Employers with tight budgets may lay off employees to remain solvent.

Some employees would make more, but others would have to seek other employment — stressing the unemployment system. This would raise the cost of living and create a need for further minimum wage increases. Corporations may outsource more jobs to countries with lower or non-existent minimum wage standards. Though some people would lose their jobs, the working poor as a group would benefit.

This raises a sticky question: Given the power of the working-class voting block as evidenced in the 2016 election cyclelawmakers may well avoid raising the federal minimum wage. Oddly enough, minimum wage increases adjusted for the inflation they cause raise the real income of most families as compared to the poverty level. Only families that make over 6 times the poverty rate would see a decrease in real income if lawmakers raised the federal minimum wage.

Given this statisticsome would argue that the greatest resistance to minimum wage increases are not the working poor, but rather the richest members of society. Others would argue that families live beneath the poverty line due to underemployment, not the minimum wage. Would creating more jobs and more full-time jobs bring more people into the labor force and raise the national standard of living?

Pros and Cons of Raising Minimum Wage

For this reason, some experts say the EITC has a greater effect on the very poor than the minimum wage. Raising the minimum wage without EITC upgrades would help many families, but not necessarily the poorest. Many minimum-wage workers are secondary earners with support from primary breadwinners who make a good deal more than they do. How does the minimum wage affect people at all wage levels? Raising the minimum wage creates a ripple effect throughout organizations — with positive and negative effects.

In your hypothetical business, you employ 6 workers: Your total wages per hour ignoring peak times, days off, etc. To reward your experienced and loyal employees, you want to offer a variety of pay levels.

Would you even start such a business, knowing a minimum wage increase could cut deep into your profits? Your bialy business could survive and thrive by marketing its carb-and-caffeine products to minimum-wage workers on their morning commutes. This segment of the consumer market—flush with cash—could spend more on AM treats, increasing demand for your products.

By setting a minimum wage and setting it to increase with inflation, lawmakers would benefit small business owners who like our hypothetical bialy-slingers employ many employees at and near the minimum wage. Neither employers nor employees would experience periods of feast and famine.

  • Raising the minimum wage creates a ripple effect throughout organizations — with positive and negative effects;
  • Raising the minimum wage without EITC upgrades would help many families, but not necessarily the poorest;
  • Voters have approved minimum wage referendums even in more conservative states like Nebraska and South Dakota;
  • This improves a small-business owner's opportunity to improve productivity through the use of higher-quality workers not previously available;
  • Buoyed by that support, labor unions and low-wage workers have succeeded in getting raises passed on the state and local levels as the federal rate has stayed stagnant;
  • Increased wages and spending raise demand and create more jobs.

This action would stabilize the long-term economy and encourage entrepreneurial investment. Needless to say, smart businesspeople should stay abreast of the ever-important minimum wage issue.

The Impact of Raising the Minimum Wage

Track your work-hours, calculate billable hours, create comprehensive reports, and plan for periodical mandatory wage increases.