week 4 - assignment a and b
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GEN499-week3assignment.docxRunning head: ANNOTATED BIBLIOGRAPHY 1
ANNOTATED BIBLIOGRAPHY 5
Introduction, Thesis Statement, and Annotated Bibliography
Chioma Nnama
GEN 499: General Education Capstone
Professor: Heather Haffner
June 10, 2018
Introduction, Thesis Statement, and Annotated Bibliography
Introduction
One of the global societal issues that affect a majority of the countries in the world is income inequality. While the inequality gap is higher in developing countries, developed countries also have a significant gap between the rich and the poor. The United States is one of the countries that suffers from a very high inequality rate with more than 80% of the country’s wealth being owned by 20% of the population. One strategy that has been used to deal with this issue is the minimum wage requirement. However, in spite of the minimum wage, the most impoverished people still get too low of an income to live comfortably with the very high living costs. Efforts to raise the minimum wage to a more decent value have been commonly opposed with people arguing that a higher minimum wage will increase unemployment and raise the costs of running businesses. More research is required on this topic to demonstrate the extent of the effect that minimum wage has on the poor currently and to evaluate the extent to which the changes in the minimum wage law will affect businesses financially.
Thesis Statement
Raising the minimum wage is beneficial as a way of reducing the inequality in income distribution because it will help the lowest income earners to have access to more of the money in the economy.
Annotated Bibliography
Bosch, M., & Manacorda, M. (2010). Minimum wages and earnings inequality in urban Mexico. American Economic Journal: Applied Economics, 2(4), 128-49.
This article aims to refute the argument that the minimum age requirement is effective in reducing income inequalities in an economy. With the analysis of Mexico, the authors argue the minimum wage requirement has been causing a significant increase in earnings inequality in the country. The authors argue that with an increase in the minimum wage, the costs of operating businesses become too high. Therefore, the demand for unskilled laborers and other minimum wage earners reduces because the businesses are trying to save on their costs. This, in turn, leads to the increase in the unemployment rate. Therefore, the authors, dismiss the requirement of a minimum wage requirement as a necessary labor reform in the country of Mexico. This article supports one of the most common arguments used to refute the idea of increasing the minimum wage rate. The opposition of minimum wage increase argues that it will hurt the economy by increasing employment.
David, H., Manning, A., & Smith, C. L. (2016). The contribution of the minimum wage to US wage inequality over three decades: a reassessment. American Economic Journal: Applied Economics, 8(1), 58-99.
This article reassesses the effects of the minimum wages in the income inequality rates of the United States for three decades. The authors utilized decades of data and an IV strategy to evaluate the potential biases in previous studies that have been done on this topic. This study found that in the past three decades, the minimum wage rate has helped to reduce the rate of income inequality through the increment of wage distribution. The authors find that the rate of income inequality was significantly higher in the 80s when the minimum wage was lower and has improved with the increase in the wage rate.
The evidence presented in this article is relevant in demonstrating how the raising of the minimum wage can be beneficial for income distribution. As the minimum wage rises, earnings are more distributed among the people in the country; thus, reducing the quality gap between the rich and the poor.
Dube, A., Lester, T. W., & Reich, M. (2010). Minimum wage effects across state borders: Estimates using contiguous counties. The review of economics and statistics, 92(4), 945-964.
This study evaluated the low-wage sectors such as restaurants where employees of minimum wages tend to be employed. Specifically, the study assesses the policy discontinuities between state borders, which affect minimum wage. The article uses a case study technique to evaluate wage policies between 1990 and 2006. In comparing the differences in the wage policies, the authors find that the different wage policies had no significant effects on employment across borders. The study, therefore, is useful in showing that changing the minimum wage will not have a very substantial impact on the country’s employment rate. In places where the minimum wage is higher, businesses find a way to adjust to the changing business costs. The changes in minimum wage has no significant effect on their decisions to either higher or let go of their workers. This article gives a compelling argument to refute the idea that raising the minimum wage will be hurtful to the economy by increasing the unemployment rates.
Saez, E., & Zucman, G. (2016). Wealth inequality in the United States since 1913: Evidence from capitalized income tax data. The Quarterly Journal of Economics, 131(2), 519-578.
This article evaluates the distribution of wealth in the United States for over a century to determine the changes that have taken place over time. The authors used Flow of Funds data and income tax filings to identify the differences in income distribution in the country since 1913. The study found that wealth distribution has changed significantly in the 21st century especially because the percentage of the top owners of the country’s wealth has reduced substantially. This article suggests that part of the reason that could have caused a reduction in the inequality is that involvement of the government in controlling the wage rate. With the government controlling the minimum that poor people get from employers, there is a higher chance of making sure that more money is distributed to them. This article supports the argument of the thesis of this research that the minimum wage increment is a good strategy for controlling the rates of income in the country.
Schmitt, J. (2013). Why does the minimum wage have no discernible effect on employment?. Center for Economic and Policy Research, 22, 1-28.
