Studies on the Minimum Wage

Abstract: How much is too much? This is the question I asked myself over and over again about the minimum wage. I miss the days I didn’t know so much about the way our economy works then so you can hide in ignorance. I take the issue being against the minimum wage I think the point of view should be heard. My goal by the end of this research paper is to teach my readers a little bit about macro-economic concepts and some partially on the control the government has over business

Introduction into the minimum wage:

Let’s talk about macro level economics. I’ve learned so much in this class and one of those things are the social pressures when it comes to certain national issues. Talking to other classmates in the class I came across several others doing the issue of Minimum Wage. I love to learn and with that you need to dig deeper and disagree even with yourself to learn an opposing side. In this journey I found that I agree a lot more than I ever thought I would about be getting rid of a minimum wage. The minimum wage has become more of political topic than a real common-sense economic issue.

This is a very hot topic in news and socially these days. People are paying attention and keeping track of wages. Along with minimum wage you here this term living wage this is important later in this paper. In my opinion most American don’t have a grasp of theories and concepts that directly concur that a high minimum wage is bad for everyone. In my argument I’ll specifically talk about the class of people it hurts the most.

I’ve always found the minimum wage issue little tricky because my core values I don’t like the government involved in business or finances. If US government was a business it would be the worst. I still can’t understand how they mess things up so badly year after year administration and administration. The government has made a price flooring for labor and by that eliminated a lot of non-skilled labor. The government runs in cycles of trying to please people and has created a socialist style approach in some economics.

I mention socialist style of approach for economics, this is called the living wage. With elections and certain parts of the country managing wages this way I can only feel for the tax payers. Taxing the wealthy to their limits isn’t a good idea. They take their money out of the country or use loop holes/ tax cuts. Heavily taxing the wealth isn’t good economics management and I’ll explain that in couple pages.

Something that hasn’t been brought up very much is technology. If the minimum wage gets to high more and more companies will just go partially or fully automation. This has a trickle effect and will create a rise in unemployment. With this rise comes less tax money to the government less programs to help the lower income levels of people. A high minimum wage hurts the middle and lower class much more than the wealthy. As a country our technology sectors are getting better and better. Low skill labor I think should be by people. We don’t need machines we need people working and building skills so they can further their career. Its all about adding skills.

Low skilled labor is under attack by the government. Companies want to hire people but to the level of their productivity. Its basic business practices that companies know what the number they need to pay their employees to turn a profit. The Government has so much welfare programs and giving people a crutch. Let people work gain some confidence, learn a new skill and get work experience. The government holds companies and people back from growing.

As a county a think we need a shock to how we see working and not working. You’re a young person and want to start working at 15 dollars an hour good luck I can’t see a company hiring you. The government runs the show with the price floor and I hope it doesn’t get so high it hurts us all. We are thinking about money with deep emotion and you can’t do that and be successful.

Background and History:

To know where you want to go, often we need to look back into the history. Let’s take a time machine and go back to the 1930’s. The year was 1938 when the first minimum wage was created. You would be surprised to know before that 1 state before the law enacted a minimum wage. This state was Massachusetts in year 1912 but it only covered woman and children. So, the thought of a minimum wage was alive in lawmakers minds two decades before.

America was built on hard work and building industry so this age needed something to protect the workers. This came in the Fair Labor Standards Act (FLSA) of 1938. The wage was set at 25 cents that equals 4 dollars in todays dollars. This was a huge platform for Franklin Delano Roosevelt as president. That same 25 cent minimum wage has been raised 22 times and by 12 different presidents.

The Unites States minimum wage in law was purposely set up to not yes not rise with inflation. This is one of the biggest problems I have with the law its only thinking short term. Leaving money laws to politics is dangerous just for this reason it was a short-term thing to get votes. I’ve explained the federal minimum wage the states can set their own standards and now let’s talk about some state info. Five southern states have no minimum wage laws, including Louisiana, Mississippi, Alabama, Tennessee, and South Carolina. Four states have a state minimum wage lower than the federal minimum wage, so the federal minimum wage automatically applies Wyoming, Minnesota, Arkansas, and Georgia. 20 states have laws that lock the state’s minimum wage with the federal minimum wage. 21 states and the District of Columbia set their rates higher than the federal minimum wage ( need to cite)

As you can see the states and federal government has minimum wage standards but cities also have their own wage standards. A good example is Seattle, Washington has a 15.45 dollar an hour minimum wage. Also, San Francesco has a minimum wage of 15 dollars an hour, this is what politicians would call a living wage. We have had 7 weeks of class discussions and I couldn’t believe how much the government impacts the economy. To be honest it makes me little worried we can get into a socialized style government in the near future. Economically I can’t see how socialism works for the united states.

More of history of the minimum wage, it was a fight to get it and I think in the 1930 it was needed. A good economy needs to able to adjust with times and know what’s good for business but also citizens. In the 1930 a lot of work wasn’t available but in the political of it all the minimum wage was a popular concept. As you can see, we have some a long way from 25 cents to 7. 25 federal minimum wage.

My last point of the history of the minimum wage is that when it was created in the Fair Labor Standard Act congress on purpose made it so it didn’t adjust with inflation. Economies have inflation and it doesn’t mean bad, a right amount is good for a country. I truly feel like officials did this so the people would have to go back to them for a raise. It’s like government would have the control and hang it over the working class and even corporations. I think the cost of doing business with the minimum wage has hurt us socially also. Price floors hold us back from working and that’s the unfair part. Americans needed and need work that’s part of our tax system we need that money and the American needs to be able to spend

Current State of the minimum wage:

The Current state of the minimum wage is a fight among the government and it makes it harder to create jobs. Like I mentioned in the background of the wage federal, state and cities can have all different wages. I currently live in IL and my state minimum is 8.25. I’ve explained now how 3 different forms of government affect the wages. This equals to three more times likely government can mess things up and I believe they have. The current year 2018 isn’t 1930 you can’t get away from treating people the same for many reasons. People are more skilled today and technology helps people even be more intelligent.

With today’s economic issues I have to ask what is the magic number for a minimum wage. Is it 10 dollars some people think it should be 15 dollars an hour? I would like to believe the government has the best interest of the people. My opinion there is only two options for a set standard wage its either full force living wage with inflation adjusted yearly or get rid of it. My overall finance standards I don’t like regulation holding back people who want to get experience and work or people who need par time work for additional income from their full-time income.

I’ve been reading main news outlets and I find there is a theme with progressive parties that there is a real fight for 15 dollars an hour nationwide. At this price point I can’t see how will small business survive. Some has labeled this price point a living wage. If this it does happen, I can see several things happening. Many workers would be moved to part time with that even losing other benefits. The wall street journal has been quoted in saying that it could lead to a chain of over 500,000 jobs being eliminated. The mom and pop stores relie on cheap low skilled labor to be able to make a profit. The small business sector isn’t greedy just not enough money to make up the difference of 7. 25 to say 15 dollars an hour. One of the biggest issues who know what the magic number is seems like a law maker just use a number that is catchy. Fight for 15 is catchy but it happening in some cities already. Seattle and San Francisco where this labor standard exist companies have left and some cut hours into par time.

There is a problem when no one is fighting for the pure economics wellbeing. We didn’t become one the wealthiest countries in the world and the land of opportunity by giving in to non-common-sense laws. Seems like there is a newer generation that wants money literally handed to them. While doing research for this paper I even read some articles about literal free money being handed out as a national platform issue. The state of California is doing an experiment where they are gibing over fifteen hundred people four hundred dollars a month to spend.