http://www.washingtontimes.com/news/2013/mar/18/sen-elizabeth-warren-raise-minimum-wage-22-hour/
In this article, Sen. Elizabeth Warren states she wants the minimum wage to be increased to $22/hr. She says that if we follow the historical prices of the minimum wage back to 1960, then the current minimum wage should be $22. The problem with minimum wage is that most people that are working at the minimum wage are living with families with over $40,000 dollars of income a year. Raising the minimum wage would not effect these people. Plus, if the minimum wage is increase by $14.75, this would cause the unemployment rate to rise substantially because firms wont be able to make a profit with such a raise.
In this article, Sen. Elizabeth Warren states she wants the minimum wage to be increased to $22/hr. She says that if we follow the historical prices of the minimum wage back to 1960, then the current minimum wage should be $22. The problem with minimum wage is that most people that are working at the minimum wage are living with families with over $40,000 dollars of income a year. Raising the minimum wage would not effect these people. Plus, if the minimum wage is increase by $14.75, this would cause the unemployment rate to rise substantially because firms wont be able to make a profit with such a raise.
The question most worth asking in regard to raising the minimum wage is the intention behind it. If it is intended as an antipoverty strategy, then it is a very poor one.
ReplyDeleteA very small percentage of the labor force works at minimum wage to begin with. In addition, poor households are no more likely to have minimum wage earners than non-poor households. This is because most citizens working at minimum wage are teenagers. This reduces the problem of raising minimum wage to a problem of whether we feel the need to raise the money earned by mostly teenagers from middle-income families at the cost of generating unemployment in the same demographic. My personal feeling on this is that it is a poor decision. A lot of this talk seems more politically motivated than economically thought out.