What are the issues related to the Minimum wage? Is it fair or not? How does it affect the economy in Michigan
Answer:
The answer to this question depends on who you are and the way you look at it. If you are a low paid worker you may see it as good, if you are the employer it is possible for you to be neutral, and if you are a consumer you may see it as bad. Lets say you are the worker making $6 dollars an hour during which time you can make one unit of the product your company produces. The government steps in and tells your employer that is not enough he must pay to $9 an hour which he does, and you still produce one unit every hour. You are happy because you are making 50% more then you were and you go out and buy more products and the economy looks good. Your company says we can not survive if we pay you 50% more so rather then sell the product you produce for $2 we will now have to sell it for $3, and they are back in a profitable position. Now the consumer comes to the store and says wait a minute I don't have the money to buy this product so rather then buy two I will buy one. Soon your company says our sales have gone down 50% and we can no longer survive so we are going to have to lay off 50% of our work force, and you are one of the ones terminated. Now it is not so good for you or the economy. However, there are some other factors working and that is the fact those who continue to work are able to buy more, but then other companies have also had to raise their wages and prices so the whole economy is being shaken up. In a few years it will all be sorted out, most people will be working again, companiy sales will be strong, but people will be paying more for everything. This means the workers at the bottom of the pay scale will still be there and will have to pay more for products they purchase and they will no longer have the advantage the minimum wage gave them. We will all be back where we started with the same buying power as before, but products will cost more. If minimum wages get too high then employeers will find ways to produce more items in an hour or find place to produce it for lesser wages. They will send jobs out of state, out of the country, or develop technology to do the job, and the minimum wage will mean nothing because those jobs will no longer be available. This is a long answer to a simple question but it does summerize what can happen. However, look at Michigan and the automobile industry, there is no better example of what higher wages and no increase in production can produce. Many jobs have gone to other states, or manufactures of automobiles in other countries found they could produce the same product for lesser prices, and shipped it here. Now american auto manufactures are in deep trouble and many jobs have been lost.
Fair? No, it's just too high, we need to rebuild manufacturing here, but you can't do that paying unskilled labor this much money. I firmly believe Michigan is in trouble.
They'll start importing refugees from Iraq to help with the economy, and paying them such a high minimum wage will be great for them, but who'll be able to pay $7+ an hour for their services when the community can't pay their current residents this much? The Iraqi business men! But they'll end up paying under the table, building the subculture, and replacing the current resident's interests.
They should focus on environmental revitalization, remove the rundown, decrepit buildings. Focus on restoring the community then the economy will rebuild itself.
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