Minimum ensure a fair wage for low paid workers.

Minimum wage is a critical labor
standard meant to ensure a fair wage for low paid workers. Minimum wage
affects workers and the economy. According to David Cooper, senior economic
analyst, the minimum wage was then established to prevent exploitation. The
federal minimum wage is to keep the cost of labor fair enough for people to
make a living. Even today minimum wage is barely allowing workers to have a
good income for their families thus relying on government aid. The growth in
the income of the United States has been very unequal. In fact, it leaves many
workers behind on an economic level. The thoughts of raising the minimum wage
can help people in the work force provide
for their families, but a drastic change in increased pay can impact the
economy in a negative way.

1938, the Fair Labor Standards Act was passed. This allowed the United States
to set minimum wage at $0.25 per hour.
That is only one-fourth of our economy’s dollar. This price in that time was the bare minimum requirement for workers
compensation. As the economy progressed
however, the federal minimum wage periodically rose but it wasn’t until 2009
that the federal minimum wage was set $7.25 per hour by the Department of Labor.
The federal minimum wage is also known as a mandatory price floor, without one,
employers would continue to pay workers less and less ultimately destroying
consumer purchasing power. The minimum wage then helps mitigate that imbalance
of power between employers and low-wage workers (Talent Economy). The federal
minimum wage is mandatory for all of the states in the United States, but it
can be raised at higher rates at the states. For example, New York City will
have a $15-per-hour wage by 2018.  The
wage of the economy has a price floor but seemingly no price ceiling which
causes a huge amount of inequality in the U.S and even the nation.  

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

People in the U.S are
starting to advocate for a higher minimum wage because the current wage floor
is not meeting the cost of living. People want the wage to be a fair cost to a
standard way of living. Since minimum wage is so low the average person may
have two or three jobs just to provide for the cost of living. This excludes
purchasing goods for the household. “Part of the problem is that we’ve let the
minimum wage erode for so long that that gap has grown substantially such that
now it’s hard to even consider bringing the federal wage floor up to a level
that would allow someone to have a decent quality of life wherever they may
live” (Cooper-Talent Economy). Minimum wage doesn’t keep up with the growth of
inflation and it is becoming powerless. Workers today have to have a high level
of education so that are not affected by
the inequalities of pay in the economy. Jobs of the 21st century are
now requiring that workers should have a Bachelor’s degree or better to make a
fair salary. One reason behind this idea is because of technological growth of
our economy.  

economic growth in the United States has been impacted by the use of
technology. Technology drives our economy. Its growth has not only impacted
jobs but also was the cause to more,
productivity and innovation.  In turn,
GDP would elevate due to the evolution of technology. In the long run would
either raise employment or cause unemployment, causing
even more inequality in the work force. The gap between the rich and poor
will become much larger because of the growth in technology in the economy.
According to the article in Market Module, “The growth of technology has
successfully managed to increase economic growth for nations by raising
productivity, efficiency and output levels, paradoxically at the cost of
hampering employment opportunities within specific sectors.”  With growth
in technology moving at a fast pace, the demand for untrained worker will decrease causing them to find work elsewhere
or having to retrain in order to get their jobs back. The labor force is
flexible but limited when technology is involve. The reason why jobs now
require workers to be efficient with basic computers functions. 

Our economy is
constantly growing. Economic growth is an increase in the production of goods
and services from time to time. It can be measured and adjusted for inflation.
 This growth is monitored by the GDP,
also known as the Growth Domestic Product. It is monitored in quarter systems
and is then averaged out for the total economic growth for the year. Gross
domestic product in the United States represents the total aggregate output of
the U.S. economy. With growth in the economy we see an increase in aggregate
productivity. This essential causes more work for workers to ensure that the
economy stay productive.  This helps grow
the economy because it grows the labor force because more workers generate more
economic goods and services.  The annual
growth in GDP is the reason minimum wage should also rise. As the economy grows
and the minimum wage stays low then it would halt the steady progress in the
economy we are trying to build and become further behind in economic inflation.

Studies have shown that over the past 20 years,
annual GDP growth over 2.5% has caused a 0.5% drop in unemployment for every
percentage point over 2.5% (Investopedia). The idea is to increase overall
growth while lowering the unemployment rate.  But this is not the case extremely low
unemployment rates hurts the economy more
than it makes it better.  Too much growth
in GDP can cause a major increase of
inflation and corrupt the stock market by making money less valuable. But by
maintaining this rate of growth our economy will not suffer negative side
effects. By working towards a more full employment, aggregate demand for goods
and services will rise faster than the aggregate supply which causes prices to
rise. Not only does this happen, but also, many companies will have to raise
wages because of a major change in the work force. This increase then affects
consumers because the companies raise the prices of their products so that they
can maximize profits.  This growth can
cause inflation in the economy.

Inflation is either an increase in money supply or an
increase in price levels. If the money
supply increases then the price level will rise. Inflation applies to how the
prices of products are doing overall. Inflation is measured by the core Consumer Price Index (CPI),
which used in the U.S. financial markets that also represent the prices paid by
consumers. The Consumer Price Index calculates inflation in the economy. In the United States, the Bureau of Labor Statistics
gathers the average prices paid by consumers for hundreds of different items
each month. The average is then compared to a reference base period. That base
period is an arbitrary date set by the federal government (US Inflation
Calculator). The CPI is not the best way to
measure change but is one way our economy monitors inflation.  The main concern is the raising minimum wage
will raise prices that spark the start of inflation. As I said before, raising
the minimum wage too high can cause high unemployment.  Unemployment is important to the economy and
the market.

Everyone wants a job and everyone wants to give payed a little bit more for the work that they
do. People may think the prices are unfair because of the heavy labor. But, is
it worth risking the growth of our economy to make a drastic change to minimum
wage?  I don’t think it is, minimum wage is important for our economy. I
believe that the minimum wage should continue to rise with the growth of our
economy but I don’t agree that minimal wage should spike and cause a major
unemployment crisis is that affects the GDP. Without minimum-wage people in
this world would probably get paid even less than what the federal minimum-wage
is seven dollars an hour. The federal minimum wage should be at least $10.50 an
hour because of the cost of living. Many people in the United States do not
qualify for government aid because they have a steady job. Having a steady job
does not mean you have the means to pay for the cost of living. This is unfair
to those who work every day for forty hours a week and still have a hard time
paying for the cost of living which is roughly sixty to seventy percent of
their paycheck. This leaves them with thirty to forty percent to pay for
expenses, food, clothing, transportation, or even have money left over to save
for future retirement. Although minimum wage helps the economy I do believe it
should be raised to  aid the costs of


I'm Marcella!

Would you like to get a custom essay? How about receiving a customized one?

Check it out