The Politics Of Low Pay Raising The Floor Analysis

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The positive analytical article I chose to critique was, “The Politics of Low Pay Raising the Floor,” an article published in The Economist on December 14, 2013. This is a very interesting article because it enlightens us on the continuing debate of minimum wage. This is a very controversial topic since many feel that a higher minimum wage will improve the lives of the working poor. Those that oppose the idea feel that having such restriction will only hinder economic growth.
The article states that several states and municipalities have already approved minimum wage raises. For example, SeaTac, a suburb of Seattle, just recently voted to raise the minimum wage to $15 an hour. The article also compares the incomes of the top 1% of American
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This appears to be a bit less common due to its contribution of change. The supply curve has shifted to the left due to a reduction of workers. For example, a reduction in population. This lowers the amount of employees, but increases their wage.
These are all clear example of how the supply and demand move about freely without government intervention. However, when the government decides to intervene the outcomes are very different. The fact is that higher minimum wage has a negative impact in the economy. This decreases employment opportunities. The chart below, taken from our book, Principles of Economics, page 118, shows how the minimum wage affects the labor market. As shown in panel (a) in a free labor market, the government does not intervene, leaving the market freely and wages naturally adjust to balance labor supply and labor demand. It balances itself out because workers are able to determine the supply of labor and the firms are able to determine their demand. Their point of intersection determines the equilibrium wage and employment. However, in panel (b) the government has established a price control such as a price floor. A minimum wage such as $10.10 an hour causes a binding. When a minimum wage of $10.10 is in effect this places a bind above the equilibrium point and as a result, we now have a higher
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This can be detrimental to society as a whole. Imagine the path of destruction we would all be in if we have a flock of no educated or low-skilled workers flooding the work force. We would have a large supply of inefficient labor and not enough demand from business. The fewer skills and experience a worker has, the less they are worth to their employer. In fact, these people are easily replaceable. Not setting a restriction on minimum wage will encourage students to finish high school and motivate them to seek higher paying job by either attending college or acquiring advanced job skills.
The impact of the minimum wage depends on the skill and experience of the individual. This is a proposal intended to benefit the poor. Those that are highly skilled are not as affected because their wage is above the minimum wage. Moreover, they have skills that aren’t as common. However, those that lack the skills and experience such as high school students or recent high school graduates seem to be affected by this the most. This is due to them being the least skilled and

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