Minimum Wage History Repeats Itself Essays - Economy,

Minimum Wage: History Repeats Itself Affecting not only Bakersfield in particular, minimum wage is a terrible solution to a simple problem that has repeated itself since the first minimum wage recorded in 1938. Minimum wage is the absolute minimum monetary value a company is legally obligated to pay their employees. This minimum amount is relative to the state and in some cases to cities within the states. In the state of California, the current minimum wage is $10.50 per hour and it is expected to change to $11.00 by January 2018. Since 1938, the minimum has been increasing in order to combat the gap between the lower class and the rest of the population, but "raising the minimum wage will not close the gap between higher-paying and lower paying jobs" (par 7). People want to earn more, but every action has an equal or opposite reaction. Rising the pay will not bring people out of low income, in fact it could make the complete opposite happen: "Over the late 2000's, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point" (Jeffrey Clemens, Michael Wither). On paper, 0.7 percentage might seem like a low number, but it is equal to 1.4 million jobs. History repeats itself, people want "one more dollar" every time the minimum wage is increased, and every time the outcome is the same. It is not logical for prices to increase due to competition in a free market; prices have continued to rise over the years. The demand for more money for less work has forced economists in the government to raise the minimum wage many times throughout time. A raise in the minimum wage will raise prices for consumers, resulting in yet another need to raise in the minimum wage. Research and Findings Set a single minimum wage and leave it alone. Many countries around the world has set their national minimum wage to a certain amount and none has failed. Most if not all of these economies have matured and molded to the minimum wage, allowing for the market to develop with it and create a natural equilibrium in all sections. According to Luke Ryan in his article titled "Australia shows why raising the minimum wage doesn't always fix poverty", "The Australian minimum wage is only 43% of the average full-time wage, [...] In the United States that ratio is 27% "(Ryan). The minimum wage does not have to increase in order to create equilibrium between those getting paid above minimum wage and those who don't. Though the statistics may seem counter to the statement, it has been noted by Ryan that the US economy "... puts a single parent on the minimum wage solidly below the poverty line." (par 8). Australia overcame the need to adjust minimum wage every year, and the ir economy balanced out at nearly 50% of their population at exactly minimum wage. Note that if the minimum wage is $10.00 an hour, an individual earning $10.50 in no longer part of the 50%. This ratio is true for all countries researched that has implemented a single minimum wage that has not been altered since then. The obvious solution for the United States' dysfunctional and demanding minimum wage is to simply allow their free market to mold and adjust around a set variable, only then the economy will find an equilibrium and a rise in minimum wage will not even be a subject to debate any longer. Solution 2 Encourage people to consider the minimum wage what it is supposed to be; the lowest possible income for a single individual to survive. People have gotten the wrong idea of what minimum wage is. Society relies on minimum wage as a full-time income to support themselves and often time their dependents. They believe that by raising the minimum wage they can finally break through the barrier of poverty, when they are actually encouraging inflation. Inflation will not only hurt the economy, but it will hurt the same individuals it aims to aid. This will force employers to either lower the work force or increase prices which