In this year’s State of the Union Address to Congress. President Obama recommended raising the minimal pay to profit workers who can non back up themselves and their households with their current wages. The articles. Why We Need to Raise the Minimum Wage and Why We Shouldn’t Raise the Minimum Wage tell us that there were some contentions in raising the minimal pay. As an economic sciences major. I believe it is a bad thought to raise the minimal pay because it creates more unemployment. and it will cut down entry-level occupations. Since increasing minimal pay is non the solution to the hapless people. the authorities should instead increase the earned income revenue enhancement recognition than minimal pay.
In the article Why We Need to Raise the Minimum Wage by Andy Stern and Carl Camden. the writers support raising of minimal pay. They argue that raising the minimal pay could honor hardworking Americans by supplying basic demands such as basic medical insurance and life in unafraid lodging. Since the low rewards are non plenty to acquire those basic demands. workers are acquiring paid in hard currency because they can avoid revenue enhancement duties. The writers allege that raising the minimal pay will reconstruct self-respect and value to low-wage work.
Conversely. in the article Why We Shouldn’t Raise the Minimum Wage. writer Kevin A. Hassett and Michael R. Strain argue that raising the minimal pay does non retrieve from poorness. and it is a dishonorable attack to conceal the true cost of the authorities policy. Harmonizing to the writers merely 11. 3 per centum of workers from the hapless would profit from raising the minimal pay. Many people who live in poorness do non work. and workers who earn the lower limit pay are usually non the primary breadwinners in their families. Hasset and Strain assert that increasing the lower limit pay is an insincere attack of the politicians because lower limit pay jurisprudence could supply an chance to hit political points easy. Even though. spread outing the earned income revenue enhancement recognition is much more efficient. the authorities do non desire it because they do non desire to utilize money straight out from exchequer.
In the economical position. raising the minimal pay is a bad thought because it creates more unemployment and reduces entry-level occupations. From the point of position of basic supply and demand. employers and workers adjust the
measure of supplied labour harmonizing to rewards until the measure of labour demanded peers to the measure of labour supplied. making an equilibrium pay. However. the minimal pay policy ignores the market monetary value by puting a monetary value floor higher than the equilibrium pay. Harmonizing to the jurisprudence of demand. few employers will be willing to engage workers if the lower limit pay is increased. and it will make unemployment.
Furthermore. if minimal pay additions there will be fewer entry-level occupations than earlier because houses will no longer engage unskilled workers at higher cost. Entry-level occupations are good for younger and unskilled workers. Extinguishing these occupations makes it hard for the low skilled and younger workers to happen suited employment. As mentioned in Hasset and Strain’s article raising the minimal pay is non the solution to poverty because workers who earn the lower limit pay are by and large secondary earners like an aged parent gaining some retirement income. a partner with a portion clip occupation. or they are immature people populating with their parents. Harmonizing to the Center on Budget and Policy Priorities. in 2009. enlargement of EITC lifted 3. 1 million people out of poorness. In decision. earned income revenue enhancement recognition will be a more efficient tool than minimal pay policy.