Wednesday, October 25, 2006

minimum wage?

In today’s class, we did a little quiz on the issue whether the state should raise the minimum wage. The result was 55 percent against the proposal, for which I feel so surprised. As we know, if the price floor is higher than the equivalence point, there will be a surplus of supply. But the question is that where is the right position of $5.15, and how about $6.85.

I think we have mentioned the following information in class before. "If the minimum wage had kept pace with inflation, it would be more like $9 right now. We've let the floor sink so low, it's historically less than we were paying back in the 1960s," said Jen Kern, director of the Association of Community Organizations for Reform Now (ACORN), an advocacy group that has led the "living-wage" movement.

Another fact is that, under present condition, the unemployment rate in Ohio is still 5.7 percent and the lowest rate around the US is 2.8 percent in Hawaii. I think in real society, even though the minimum wage is under the equivalence point, which means there should be a shortage of supply, the employment will exist forever. It is truly a complicated issue to decide the minimum wage. But I just want to know more specifically why so many people choose to against the proposal, just because of afraid of more unemployment?


mscheff09 said...

This discussion in class was well worth the time in my opinion. I believe that raising the minimum wage to $6.85 is a bad idea. Although it may look like a wonderful increase to minimum wage workers, they need to realize that if it is raised by this hefty amount many employers will cut back on workers. Instead of making $5.15 an hour, they will be unemployed. I know I have worked for minimum wage before and it’s hard to know that other people are making more doing the same job as you, which is why people should go to college and earn a degree. If the government intends on raising minimum wage I believe they should do it in smaller increments so people do not lose their jobs, minimum wage is all some people have.

ashley n said...

I also don't think that raising the minimum wage to $6.85 is a good idea. Before this past summer, all the jobs i had payed $6 or less, and it wasn't fun knowing that others with the same kind of job but at different places were making more than me and making $10 an hour would be great. But I think that the jump from $5.15 to $6.85 is way to big. I don't think the minimum wage should stay at $5.15, but I think it should be raised in smaller increments so it doesn't cause negative effect to employment.

mhahn said...

I believe that no matter how much you raise the minimum wage there will be a sudden rise in unemployment. But on the other hand many companies are paying their workers above minimum wage because many will not work for it. I worked in fast food for 7 years and even 7 years ago I was not hired in at minimum wage. Companies that do pay their employees at minimum wage should think twice because they are not helping poverty-stricken families by paying them so little. It is medievel to think that anyone can survive on $5.15 an hour in todays world. I am definitely in favor of the raising of minimum wage!!!!

Geoff Enz said...

I disagree with increasing the minimum wage because it is a proven economic fact that if you increase the minimum wage it will not improve the social welfare in the long run. By increasing the minimum wage it creates a surplus of workers in the job market. This surplus will decrease the amount of job opportunities there are out there for those seeking employment. By increasing the minimum wage it will only make unemployment worse than what it already is. Employers will then have to resort to other ways to offset the impact of higher wages by increasing the price of their goods, reducing the quality, or reducing fringe benefits. The overall impact of increasing the minimum wage is hurting the American job market and economy.