In a recent survey published by the Employment Policies Institute , labor economists express their beliefs that the minimum wage is an inefficient tool at alleviating poverty, while the Earned Income Tax Credit is seen as a much more efficient tool. The goal of increasing the minimum wage is often said to be a poverty fighting tool.
The federal minimum wage increased to $5.85 on July 24, 2007, and will increase to $6.55 after one year, and finally rise to $7.25 after two years. The increase in the minimum wage represents a 40.8% increase in the hourly wage for the lowest skilled laborers. On January 1, 2007 the minimum wage in New York state increased to $7.15, and is set to be replaced by the federal minimum wage of $7.25 on July 24, 2009. Typically, economists assume that a full-time employee works about 2000 hours per year (40 hours a week, for 50 weeks). At full time, the minimum wage annual salary will have risen from $10,300 per year to $14,500 in just over two years, an increase of almost 41%.
Beginning in 1994, some cities and municipalities began enacting ordinances dubbed “living wages” that go above and beyond the national and state minimum wages. The living wage ordinances that have been enacted to date have gone so far as creating wage floors greater than $12.00 per hour of work in some areas. Most of these ordinances are very limited in scope, and usually only apply to firms working on city contracts, and subcontractors of those firms. In many cases, firms that are unionized can opt out of the living wage law by paying wages as specified in their union contracts.
I would like you to discuss some pros and cons of a minimum wage and/or living wage law.
- Can you find any examples in your hometown or locally for an employer paying the statutory minimum wage?
- What type of jobs are typically associated with minimum wage or near minimum wage pay, and why?
- What incentives are created for employees already working at the minimum wage by raising the statutory wage or enacting living wages with the stipulations I have outlined?
- Why would unions let firms opt out of paying the living wage if they allowed workers to unionize?
- Given that minimum wage and living wage campaigns are typically very expensive to organize, who is footing the bill for these campaigns and why?
Please try to limit your comments to 100 words with a maximum of 200 words. Additionally, I would like you to state something more than the obvious economic prediction in this posting. You can also try to discuss the different positive and normative statements that are related to this topic?
A notable source for this assignment is “The State of Working America 2004/2005” by the Economic Policy Institute which is on reserve at Scribner Library. Many other on line sources will provide you ample factual information. To see examples of how a blog comment should look, you can see the following examples.
NOTE: Read other students comments before posting, and please leave your name with your posting.