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The paper explains the economics of the minimum wage and why, if the price floor were eliminated, the American economy would ultimately suffer. The paper argues that eliminating the minimum wage floor would have some short term benefits, but would do long-term harm. The paper also notes that it has probably been raised enough in recent years that another raise is entirely unwarranted now.
From the Paper:"For workers, an increase in the minimum wage means better wages for most. In areas where unemployment rates are already high, some minimum wage workers would not only lose their jobs but may have difficulty finding new ones. The hardest hit by unemployment are young workers.
"This raises an interesting point about long-term equilibrium. If young workers struggle to find work at the minimum wage, more will be encouraged to further their education so that they can find jobs in sectors where jobs do exist. For companies, raising the minimum wage makes them less competitive on the world market. But American companies competing against China and the Third World on the basis of cost are doomed to lose anyway. Increasing the minimum wage forces American companies to adopt a differentiated strategy, competing on the basis of innovation, development, and creativity. This is the case in northern Europe and Canada, where minimum wages are more or less reserved for students. Over the long run, American companies are forced to turn to innovation and American workers are driven to improve their education. Only in the short run do you see suffering in terms of job losses among workers who refuse to upgrade their skills and companies who insist on competing on the basis of price against foreign firms with deeply-embedded cost advantages."
Sample of Sources Used:
- Henderson, D. (2006) The negative effects of minimum wage. National Center for Policy Analysis. Retrieved November 5, 2009 from http://www.ncpa.org/pub/ba550
- No author. (2006). Business owners, CEOs say higher minimum wage good for business. National Council of Churches. Retrieved November 5, 2009 from http://www.ncccusa.org/news/061031higherminimum.html
- Krugman, P. (1998). The living wage. Paul Krugman. Retrieved November 5, 2009 from http://www.pkarchive.org/cranks/LivingWage.html
Cite this Argumentative Essay:
In Support of the Minimum Wage (2012, May 31) Retrieved March 28, 2020, from https://www.academon.com/argumentative-essay/in-support-of-the-minimum-wage-151286/
"In Support of the Minimum Wage" 31 May 2012. Web. 28 March. 2020. <https://www.academon.com/argumentative-essay/in-support-of-the-minimum-wage-151286/>