Federal Minimum Wage

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The federal minimum wage was passed in order to help lower income families afford higher quality goods. These goods can either be simple or complex. For example, purchasing a bed, being able to ride the bus, or being able to afford Internet. These are specific examples that will increase the standard of living. Workers who do not have the luxury of obtaining a higher education are usually stuck working at lower skilled job positions. Alternate forms of labor always threaten these certain positions. “A cashier with few skills who, following the introduction of a high minimum wage, becomes permanently more expensive than a self-service checkout machine will have no such luck” (A Reckless Wager, 2015). Companies will always look to cut costs …show more content…
Young workers trying to break into the job market will find it more difficult obtaining employment. This also affects adults with little job experience or little to no job skills. Companies who are now required to pay employees a higher wage will try to hire the most capable workers for that specific job. The idea is that job requirements will become fiercer as companies will try to get the most out of their investments. “When the population is divided on the basis of age, race, ethnicity, education, and marital status, we find that subgroups with more low-wage workers in 1989 experience larger declines in employment following the increase in the federal minimum” (American Economic Review, 1995). For example, a company has to choose between a lower class worker and a middle class worker. More than likely the middle class worker will have better education, better job skills and a higher understanding for the job. This creates a bias towards this type of worker even though the lower class worker could possibly end up being the more effective employee. This idea is very relevant in the fast food industry. “Moreover, the fast food industry is a low-wage industry even within retail trade. The industry has lobbied against increases in the minimum wage and has been a staunch supporter of a subminimum wage for youths (Bureau of National Affairs, 1985). And the fact that the fast food industry has extremely high turnover, and hires many first-time workers, makes it more likely that fast food restaurants can take advantage of the youth subminimum” (NATIONAL BUREAU OF ECONOMIC RESEARCH,

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