Home > A3, Learning > The Minimum Wage: An Economic Boost

The Minimum Wage: An Economic Boost

Even thought our nations unemployment rate falling and being at 7.6% its lowest since December 2008, CNNMoney’s Chris Isidore says it’s for the wrong reasons. He believes that even though the unemployment is steadily decreasing it is because less and less people want to participate in search for a job. “In addition, 290,000 fewer people were counted as unemployed because they were not actively looking for work.”(CNNMoney) As the graph shows there is a decline in participation, because the quantity of jobs (or the supply) is greater than the participation in the search(the demand).They are other factors that play an important role in the job search, “the difficulty for younger workers finding jobs is also a factor, as more young adults unable to find work return to school to try to improve their prospects. The participation rate for those age 16 to 24 was near a 50-year low.”(CNNMoney)

Econ reflectionThe Minimun Wage is a minimum price that an employer can pay a worker for an hour of labor. (Class Textbook) The Minimum wage is based on the cost of goods and services in the current Market. If the cost of living goes up so should the Minimum Wage. Because the Minimum Wage is based on the cost of living, States have different minimum wages, for instance your hourly pay in New York City would different to that in Dallas. Robyn Blumner of ihavenet.com states in his article that, “I grew up hearing over and over, to the point of tedium, that ‘hard work’ was the secret of success. … No one ever said that you could work hard — harder even than you ever thought possible — and still find yourself sinking ever deeper into poverty and debt.”(Robyn Blumner)

Assoun1The graph at right (click to enlarge) shows that the Poverty Line has continued to grow in the amount of people below the poverty line. Robyn Blumner illustrates this problem in his article by using a quote from Barbara Ehrenreich,”During 1999 and 2000, Ehrenreich tried to see what it was like to live on$7 an hour. She was a server in Key West, Florida, a nursing home aide in Portland, Maine, and a sales clerk at a Walmart in Minneapolis, Minn. What Ehrenreich found is that you can’t work full time with wages that low and still stabilize your life.”(Robyn Blumner) The fact that people working incredibly hard can’t live a stable life shows that there is a problem with the current level of the minimum wage. We have to raise the minimum wage so that people are able to live above the poverty line and have compensation for their hard work.

Economic Figure 2

I believe that raising the minimum wage will not only bring Americans out of unemployment but also encourage participation in the job search. It will also increase the economy. According to Robyn Blumner, “critics claim that raising the minimum wage always results in job losses, but recent research doesn’t bear that out. Economists at the EPI say that modestly raising the federal minimum wage “would create jobs” throughout the nation by getting money to families who would spend it and stimulate the economy.” (Robyn Blumner) This will change both American lives and boost the Economy.

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