Essay on Reducing The Minimum Wage Should Not More Harm Than Good

1253 Words Nov 29th, 2016 6 Pages
Abstract
This paper is an analysis of how increasing the minimum wage can negatively impact employers, employees, and different classes of people. Studies have shown that raising the minimum wage causes higher unemployment for unskilled and less educated workers. In addition, evidence suggest that higher minimum wage will not reduce poverty. In tight labor markets unemployment may remain fairly low with an increase in the minimum wage. However, in weak Economic times with a weak labor market a higher minimum wage would cause the unemployment rate to increase substantially. Using research to substantiate the argument the paper will show how increasing the minimum wage could cause more harm than good. It is important for law makers to consider policy by carefully weighing the costs and benefits of an increase and how it will affect the economy. Introduction During the 1930’s America was hit with a great depression. In an effort to fight the depression, president Franklin D Roosevelt enacted the Fair Labor Standards Act. This act put a cap on labor hours and a minimum on wages that employers could pay workers. The idea was that setting a standard rate would increase earnings and workers would spend earnings back into the economy. It was created by policy makers as one of the solutions to combat the war on poverty; yet, evidence shows that increasing the minimum wage would increase poverty. Evidence also suggests that higher floor wage can cause unemployment by…

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