Week 1 Discussion 1 & 2 Response

Week 1 Discussion 2 Classmate Response

Guided Response: Respond to at least two of your fellow students debating the opposite viewpoint or further support expressed facts. Additionally, respond to any instructor posts. Your replies should be substantive and provide information or concepts that they may not have considered. Each response should have a minimum of 100 words and be respectful of others’ opinions and beliefs that differ from your own. Support your position by using information from the week’s readings. You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum.

Below there are two of my classmate’s discussion that needs I need to response to their names are Lisa Schreiner and Jason Stack

Lisa Schreiner

Minimum wage is the base or floor hourly rate paid to an employee for time worked. This rate is set at the federal level, and in some cases, increased further at the state level. For example, the current federal minimum wage is $7.25 per hour, yet the Massachusetts minimum wage is $12.75 per hour, and Rhode Island is $10.50 per hour. Looking at this from an employee’s view, I am traveling to Mass for a job paying $2.25 per hour more living so close to the state border (although RI is so small, you can travel across the state in about 30 minutes). My first job in RI paid $3.85 per hour, the minimum wage in 1985.

Throughout the years, minimum wage increases continue to be a point of contention for people supporting the increases, and those against the increases. I believe there needs to be a balance between increasing the minimum wage and keeping it at a level the economy or businesses can support. As authorities move to increase minimum wage towards $15 per hour, I begin to hold the position of opposition.

A high minimum wage does not secure jobs for people, it only provides people with jobs at a higher hourly rate (PragerU, 2014). The businesses unable to support paying this rate, with make adjustments or go out of business further increasing unemployment. Adjustments may include higher prices to cover increases in cost, reducing labor staff, reducing hours for current staff, decreasing training expenses, and ultimately, hiring fewer employees than they would have (PagerU, 2014). A decrease in hours for current staff can also mean a decrease in benefits such as insurance, holiday pay, and vacation time. Decreasing training for staff can lead to safety issues, health code violations, and unsatisfied consumers driving down profits as sales fall and fines rise. The job market will flood with applicants looking for work and less jobs available due to the cost of employing folks. Un-skilled workers will have a difficult time gaining experience through employment without opportunities available. If I were a business and had a choice between hiring someone with experience or someone without experience for the same rate of pay, the person with experience wins out every time.

According to PragerU (2017), “a 2014 Congressional Budget Office study reflects just a $10 minimum wage would cost half a million jobs as businesses terminate employees, researchers at the Harvard Business School found that each $1 increase in the minimum wage results in a 4-10% increase in the likelihood of restaurants closing, and the cost of all workers will have to go up” (para 9). Robots and machinery will continue to replace humans, putting more folks out of work. Kiosk ordering already replaced staff in McDonald’s locations and check in’s at doctor offices now flow through an automated system. All of these scenarios will increase unemployment, decrease businesses, and detrimentally effect the economy.

 

References

Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018).  Macroeconomics: Private and public choice  (16th ed.). https://www.cengage.com (Links to an external site.)

PragerU. (2014, October 27).  What’s the right minimum wage? (Links to an external site.) (Links to an external site.) [Video file]. https://www.prageru.com/videos/whats-right-minimum-wage (Links to an external site.)

PragerU. (2017, Aug 21).  Who does a $15 minimum wage help? (Links to an external site.) (Links to an external site.) [Video file]. https://www.prageru.com/videos/who-does-15-minimum-wage-help

Jason Stack

Minimum Wage Discussion

            Minimum wage increase has been a cyclical discussion since its inception. According to Gwartney, Stroup, Sobel, & Macpherson (2018), the minimum wage passed in 1938 within the Fair Labor Standards Act (pg. 4-2d). Since that time, it has undergone several increases that provide statistical data used to predict what future increases would result. Although there is some debate as to the effects of the most current proposed increase to 15 UDS/hour, as suggest by Gwartney et al. (2018), the majority of economists believe that it would have more negative effects than positive (pg. 4-2d). Therefore, I have compiled a list of pros and cons for the proposed increase in the minimum wage.      

Pro's	Con's
Increase of Income for Minimum wage workers	Employers reducing hours to compensate
Employees that retain MW jobs after increase gain added skills and experience.	Employers reducing total number of MW Jobs
	Increase in the pricing of goods or services
	Reduction of MW workers benefits
	Less effective than other anti-poverty programs

            Another possible resolution, other than a federally mandated minimum wage increase, could be localized city and state increases based upon the local cost of living studies. Klassen (2019), describes this as a "Living Wage" and some states and cities have already enacted it on top of the national minimum wage rate. Also, a study done by the Washington State University concluded that a wage increase at the state level would be beneficial to 97% of low-skilled workers despite long-standing conventional arguments of economists (Klassen, 2019). Once again, we see a contrasting view among American economists and statistical data, but there are other cases throughout the world.

            The United States is not the only country that debates whether a minimum wage is more beneficial to workers rather than letting the market dictate wages as it does most pricing. According to Bruttel (2019), Germany did not institute a minimum wage until 2015 (pg.1). Although the hourly wages were significantly increased, the overall monthly increase was far less substantial due to the reduction of contractually agreed-upon hours (Bruttel, 2019, pg.1). Therefore the same theories developed in the United States over the decades of increases to minimum wage, studies of the results, gathered statistical data, and many economist's warnings were played out once again in Germany.

 

Thanks,

Jason Stack

             

Reference

Bruttel, O. (2019). The Effects of the New Statutory Minimum Wage in Germany: A First

            Assessment of the Evidence. Journal for Labour Market Research, 53(1), 1–13.

Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). 

            Macroeconomics: Private and public choice (16th ed.). https://www.cengage.com

 Klassen, J. (2019). Minimum Wage. Salem Press Encyclopedia.