What are the issues related to the Minimum wage? Is it fair or not? How does it affect the economy especially?
Answer:
The idea of raising the minimum wage isn't inherently bad. It is good-hearted to want to help out those that need help. The problem is that anyone that makes an amount near minimum wage, but still above it, gets financially kicked in the butt.
Assume minimum wage is $5 and you make $6. Now the government raises minimum wage to $5.50. The people that make minimum wage are happy because they make an extra $1000 per year, but now your money is not as valuable because you only make less than 10% more now, instead of 20%.
Another major problem with raising the minimum wage is the hardship it places on small businesses. These businesses may put out a fine product or service and pay minimum wage, but if minimum wage goes up, maybe they can't afford to pay it anymore. If they can't pay, no one will work and they go out of business. This isn't usually a big problem for large corporations, because they produce the volume to make up for this extra cost and they have much more room to cut costs and negate the increase.
The question of fairness will be entirely up to you because it depends on where you sit in the equation. If you make minimum wage, you're bound to be all for it. If you make slightly more, you'll really hate it. It's more a problem of knowing when to stop raising it, and corporate responsibility for the wellbeing of their employees and the lack of a real need to have every top exec making millions upon millions of dollars.
A prime example of a minimum wage that worked to some degree, is that of labor unions. The basic idea behind their inflated wages was to have a man be the sole supporter of his family by working one job (note this idea is from the 50's). Though it was never fully realized, it did a lot to narrow the income gap and there is a lot of merit to be found in that.
no its not, minimal wage helps give rason for inflation, the higher minimal wage, higher inflation, blame the fat cats in washington but overall if we cut inflation(which is extremely easier than the governement makes it out to be) we wouldnt need to raise minimal wage
If any government really wanted to positively affect the lives of the majority of it's citizens, it would mandate a maximum wage in proportion to your lowest paid worker including the price of all fringe benefits like free stock.
http://www.inthesetimes.com/article/2335...
http://money.cnn.com/magazines/fortune/f...
and yet another one..
http://www.cab.latech.edu/~mkroll/510_pa...
If CEO's could only earn a certain percent over their lowest paid employee, you'd see some pretty quick reshuffling. Instead, the average worker can expect their pay to stay the same again this year while CEO's enjoy another increase.
Everytime minimum wage gets increased, the companies just raise the cost of the product purchased by the low end consumer. Raising minimum wage doesn't do any of us a bit of good. Capping the millions and even billions earned yearly by a single CEO would cause more available money for the lower level worker and wouldn't hurt small businesses that don't have overpayed CEO's.
The standard textbook arguement against the minimum wage is that it tends to cause unemployment especially among the young or unskilled. Thus those that have jobs at the higher minimum wage benefit, but now some can't find a job at all.
Like any other commodity or input into production, if you raise the price of labor, businesses will attempt to use less of it. I don't know how big the impact on employement will be though I am sure there are lots of empirical studies that try to measure it.
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