http://money.cnn.com/2014/02/12/news/economy/obama-executive-order-minimum-wage/index.html?iid=SF_E_River
President Obama recently issued an order that will bring the minimum wage up from $7.25 to $10.10 starting in 2015. The $2.85 increase to the hourly pay of min. wage workers in the US comes from the gradual urge of liberals who believe that lawmakers are not going to move fast enough to make the increase happen. This is undoubtedly big news, however it isn't exactly what it seems. The order merely applies to "...contracts and subcontracts that provide the federal government with concessions, services, and construction." In other words, the push will affect less than 500,000 workers. It is, however, a good starting point to urge Congress to make it the same increase for all workers. The White House states that the increase in minimum wage will provide positive effects such as increased productivity and lower turnover. Some say that the move with cause employers to higher less and cut hours. The outcome will be exciting to see.
Going on what we have covered in class, I expect to see an increase in the unemployment rate. Also when coupled with the new health care law, it is likely that many workers will be shifted from full-time to part-time employees.
ReplyDeleteI think raising the minimum wage to $10.10 will have a negative effect on the economy. If the wage is raised, owners will cut back on the employees they hire and the overall level of prices will rise. I think a more reasonable solution is to raise the minimum wage to $9.10. I also think it would be beneficial to require states to raise their minimum wage based on CPI every three years.
ReplyDeleteI applaud the efforts to get those working at the $7.25 minimum wage out of poverty. However, raising the minimum wage to $10.10 will hurt the economy overall. Those who are currently working will be fighting hard to keep their jobs. Those who are looking for jobs will have difficulty finding one. This drastic increase will hurt more than it will help. With an increase in minimum wage and a decrease in unemployment benefits, the unemployment rate is sure to increase.
ReplyDeleteI also believe that overall it would hurt the economy resulting in more unemployment. However, you really have to feel for those that live at this level. There are many people that work at the minimum wage level, and corporations that hire at that level know that that the people cannot live on that salary. They must result to food stamps and welfare.
ReplyDeleteThis article has a little bit to do with it. Kind of interesting for more reading about the minimum wage debate.
http://www.npr.org/2012/07/08/156458470/raising-minimum-wage-a-help-or-harm