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Title: Minimum Wage and its Impact on Society
The topic of minimum wages has become a very contentious and captivating issue throughout the developed world. For one, accommodative monetary and fiscal policy, as a result of COVID-19, has flooded the market with large amounts of currency, thereby depreciating the value of dollar. In addition, rapid inflation, caused by a litany of economic sources, has lowed the purchasing power of the dollar relative to other currencies around the world. Many businesses have responded by raising prices on numerous goods and services, including consumer staples, toothpaste, food, utilities, and clothing. The impact of these price increases has been far reaching as industries from retail to automobile manufacturers have been forced to raise their respective prices. Unfortunately, wages, have remained relatively stagnant over many decades, even as the cost-of-living has increased. Here, consumers are now forced to contend with higher prices, lower purchasing power of their dollar and lower prospects of wage increases (Stigler, 2006).
To combat this trend, the government has proposed a series of minimum wages increases, designed to help mitigate the impact of the economic forces mentioned above. Overall, the impact of minimum wage increases is...…robotics. Here, fast food chains are already experimenting with robotics that can automate the cooking and distribution of food products. Likewise, companys such as Alibaba and Amazon are also experimenting with artificial intelligence and robotics within their warehouses and distribution networks. Here, if the price of unskilled labor rises too high, companies, to maintain their margins, will look to leverage alternative means of production (Brown, 1982). This ultimately can result in the unintended consequences of lowering low skilled employment in favor of automation and robots leveraging artificial intelligence. This in turn would exacerbate the overall employment and wealth inequality issue that…
References
1. Brown, C., Gilroy, C., & Kohen, A. (1982). The Effect of The Minimum Wage on Employment and Unemployment. Journal of Economic Literature, 20(2), 487–528. http://www.jstor.org/stable/2724487
2. Stigler, G. J. (2006). The Economics of Minimum Wage Legislation. The American Economic Review, 36(3), 358–365. http://www.jstor.org/stable/1801842
3. MaCurdy, T. (2015). How Effective Is the Minimum Wage at Supporting the Poor? Journal of Political Economy, 123(2), 497–545. https://doi.org/10.1086/679626
4. Neumark, D., Schweitzer, M., & Wascher, W. (2004). Minimum Wage Effects throughout the Wage Distribution. The Journal of Human Resources, 39(2), 425–450. https://doi.org/10.2307/3559021
Minimum Wage Even though minimum wage has been around for many years, and was established to make sure that working people could survive and pay their bills, there are still many problems with it. This paper address both the pros and cons to raising the minimum wage, discussing not only how people can be helped by the increase in pay, but also how they are ultimately hurt by it to a
Minimum Wage Why the minimum wage should not be abolished in the United States. There are diverse issues that have been debated by politicians and critics concerning the minimum wage in the United States. Some say that the minimum wage causes an increase in the unemployment rate. In turn, it causes negative effects on the nation's economy. However, the truth on this proposition is still to be proven yet. Taking the side
The company can also allow a position to go unfilled for a time to increase its leverage; the unskilled worker would starve trying to stall for a higher wage. This again invalidates the argument that the free market can set wages effectively -- it cannot given the imbalance of bargaining power between workers and businesses. The minimum wage serves a specific economic role of balancing the bargaining power between
Only 2.1% of minimum-wage workers belong to a union, versus 12.0% of the overall working population. Nonetheless, labor unions fight passionately for a higher minimum wage (Sherk). When the minimum wage rises, it becomes more expensive to hire unskilled workers. This makes the decision to employ highly paid and highly skilled workers, instead of unskilled workers, more attractive to businesses, and so businesses want to hire more skilled workers (Sherk). With
Minimum wage laws have always had a high price to pay. Essentially, there are a number of costs associated with governments implementing minimum wages on an otherwise free labor market. First, there is the issue of reconciling increased labor costs with static production profits. According to the research, "Minimum wage increases make unskilled workers more expensive relative to all other factors of production," (Gorman 2008). The increase in wages can
This creates a knock-on effect wherein this spending fuels hiring at other companies, whose workers also spend. In contrast, the additional profits earned by corporations as a result abolishing the minimum wage could be invested anywhere in the world and capital gains from stock price improvements are taxed at a relatively low rate. Without a minimum wage, there would be more Americans working, but they would not make enough