Minimum Wage

Minimum wage is currently $7.25 an hour. Many Americans think this is not enough to live off of because of the constantly increasing markets of today’s society. If minimum wage increases many businesses would have to fire many employees or stop selling certain products completely. Minimum wage needs to stay down so prices can stay down! Evidence #1: Reason number one to not raise minimum wage is because it would result in job loss, the first minimum wage of 25¢ resulted in noteworthy job loss. The effects of job loss are often long lasting. Due to how society compels us to be seen by how we provide for our family might send many people into a spiraling depression because families often don’t save money for experiences like this. We cannot allow this to happen because we will fall back into a dark age.

Evidence #2: Reason number two to not raise minimum wage is because it would raise many prices of already overpriced items. Sure raising prices could increase profitability but not by very much after the fact of having to pay the extra dollars for your worker who now gets paid $12 an hour, and your store is now lagging behind because of short notice on workers. Raising prices could also lower the amount of customers willing to buy your product in turn causing you as the owner to lose business and now even more money. Finally, when raising prices of a simple item like a bag of apples that is $4 now to $7 because the people that pick the apples now have to be paid and the people you buy the apples from now have to find money to pay those workers with so they raise their prices and cause you to have to pay more for the same stuff. We cannot allow this to happen because small business owners would fall into bankruptcy.

Evidence #3: Reason number 3 to not raise the minimum wage is because if you want to keep all your employees you would more than likely have to cut hours. This could result in these employees quitting because they are not satisfied with their paychecks, their benefits, or even dissatisfied employees becoming less productive leading to lower sale rates and the business losing money. This environment creates a poor work environment and causes many employees to see this a favoritism if another employee gets more hours than them. Minimum wage should not be raised because it would make people upset and lessen the work environment. Conclusion: “If the government requires that certain workers be paid higher wages, than businesses make adjustments to pay for the added costs, such as reducing hiring, cutting employee work hours, reducing benefits, and charging higher prices.” Policy analysis, The Negative Effects Of Minimum Wage Laws- Mark Wilson. This quote shows the exact effects of minimum wage laws. In conclusion, minimum wage laws need to stay down.

Can you remember a time when it did not cost over $5. 00 for a “Value” meal at any fast food chain, or when gas was under $2. 00? It’s hard to remember, isn’t it? The reason for the raise in price of the products you and I purchase on a weekly basis all has to do with the continuing raise of minimum wage. Donald R. Deere says “There are two ways to think about the minimum wage. The first – but misleading – is how much workers are going to get paid. The second – and correct – is how much people must be able to earn if they are going to get or keep a job.

So the minimum wage, which is sometimes characterized as a “hand up, not a handout” is neither – it is a hurdle that trips up the least skilled. ” The continuing demand of more money for less work has forced the United States to raise the minimum wage innumerable times in the last century, Which results in higher prices for the rest of us. Another raise in the minimum wage would, as all the others before it, raise prices for consumers, which would again result in another demand for a raise in the minimum wage. it’s a viscous cycle that must be stopped before it loses control.

Not only does a raise in minimum wage result in a raise in the cost of living, it also causes the dismissal of hardworking people who are happy with their current income. When the firing axe starts to fall, seniority often determines who goes and who stays. The more a single employee costs a business an hour, the fewer employees the business can afford to employee an hour. This results in the dismissal of employees to compensate for a raise in labor costs, which creates a smaller staff, which results in slipshod service.

Although most reasonable people would rather pay more for better service, the plain fact of the matter is that the service hasn’t really gotten any better. The service is better that it was when there weren’t enough employees so people assume the service itself has gotten better, while the truth is that the service is just as haphazard as before. The laborers are simply replaced because of a need for more employees, more often that not by people who have never worked in those positions before.

By having a staff that is constantly fluctuating, the business hurts itself, the service is hurt because the new employees are in need of training, and in the end it is us, the consumers, who feel the real pain. The pain we experience is that of rising costs in the market its that sharp pain we feel every time we reach for our wallet, but it is in no way as painful as the fact that we give bonuses for no reason in the form of raises in the minimum wage.

The argument that minimum wage should be raised says people need more money to make a living in a world of ever rising costs. The truth is that they, the people who demand more money, are the ones raising the cost of living. Some would say that the high cost of living is brought about by the devaluation of the dollar and the effects of inflation. Truth be told, inflation is also caused by the flooding of the market with bills printed to pay the high costs of laborers in the market.

Laborers who are comprised primarily of teens and the elderly, both of which usually have an alternate for of income either in the for of parents or social security. I offer an alternative to the minimum wage. If people would respect their money and understand the value of the dollar then they would have to learn skills that would promote them in the job Market. The minimum wage could be kept for the handicapped and the disabled, people who for the most part aren’t able to advance themselves in the working world.

The most positive thing about the current minimum wage is that it is substantial enough to make teens respect their money, but also low enough to force them to save. George Santayana Once said “Those who fail to learn from the mistakes of their predecessors are destined to repeat them”. The argument over the minimum wage makes it abhorrently obvious that this statement is true. The time of action is now, before we are forced to start this cycle again.

Arguments for and against the National Minimum Wage (NMW) in the UK: stop employees being taken advantage of by being paid unfair wages by their employers. set a standard of the minimum worth of a worker. This benchmark was set so that employers would be unable to hire any staff for less than the suggested hourly rate. reduce pay differentials between genders. What is the new minimum wage? : In October 2009, the NMW for workers increased from: ?5. 73 to ? 5. 80 per hour – aged 22 years and older ?4. 77 to ? 4. 83 per hour – aged 18 to 21 years ?3. 53 to ? 3. 7 an hour – aged 16 and 17 years As of October 2010, the adult minimum rate will start from 21 years. Who qualifies for the Minimum Wage? Home workers, agency workers, part-time employees, pieceworkers… most adult employees working legally in the United Kingdom with a written, verbal or implied contract, qualify for the NMW. The relationship between Demand and Supply: Arguments in favour of the NMW: Diagram showing potential earnings from the NMW: {draw:frame} Diagram showing increasing demand for Normal goods: {draw:frame} Reduced labour turnover, raised productivity:

Economic benefit for the country: Monopsonistic labour markets: A monopsony occurs when one buyer faces many sellers in a market. The buyer thus controls a large proportion of that market share. In the diagram below, a monopsonistic business maximises its profits at Q2, paying a wage at W1. (Demand = Marginal Revenue Product and supply =Average Costs). If the minimum wage increases to W2, demand for labour will increase to Q1. The level of unemployment will not increase until the minimum wage increases to an amount higher than W3. Diagram showing NMW effects on a Monopsony: draw:frame} Arguments against the NMW: Law not properly enforced: The NMW is not a properly enforced law. The result is that is has merely become a guideline to which employers are expected to adhere. It is estimated that 5% of the UK workforce receives less than minimum wage (WordPress 2009). If an employee reports his employer for paying less than the minimum wage, the employee pays a nominal fine. Fines are not severe enough (HM Revenue and Customs 2009). Low-skilled workers suffer: Many opposed the NMW when it was first introduced.

Some believed that it would increase unemployment and cause wage inflation. They argued that if the minimum wage was high enough to be effective, unemployment among the inexperienced and handicapped would escalate. The workers with lesser skills would be harmed to the benefit of those who were more highly skilled. The demand for jobs at the higher wage levels would be greater than the supply of jobs available. Businesses could therefore afford to be more selective in the employees they chose, and workers with limited skills and experience would typically be excluded.

Cost of production increases, leading to higher prices for consumers: Another argument is that an increase in the minimum wage willincrease production costs, thus increasing the overall cost of the product. The result of this would be reduced profits for the business, due to: producers absorbing the extra costs, leaving less money for re-investment. Diagram showing how an increase in the price of a product affects supply and demand: {draw:frame} The original price of product X is ? 35, and the demand for the product is 320 units (E1 representing Equilibrium between demand and supply). Product X then increases in price to ? 4 due to an increase in the NMW, resulting in a drop in demand for the product to 120 units. This drop in demand then results in an oversupply of goods from the producer, who is then forced to reduce his supply to the new demand level, or goods may sit on the shelf. E2 represents the new Equilibrium level between supply and demand. If the good was perishable and the supplier did not adjust his supply, there would be a lot of wastage. Not everybody qualifies: Those who are exempt from receiving the NMW include; Apprentices under 19 years of age, and apprentices 19 years or older in their first year of their apprenticeship.

Students on a work placement, forming part of a higher- or further education course, where the placement is for less than one year. The self-employed Those on a Department for Workers and Pensions back-to-work scheme The Recession: A recession is characterised by a period of at least two consecutive quarters of negative growth. During a recession, demand and supply of goods and services in the economy contracts. The UK economy contracted by 1. 5% in the last quarter of 2008 and the Gross Domestic Product experienced its biggest fall since the second quarter of 1980 (Kowelle 2009).

This is the first time since the inception of the NMW that employment has fallen. Unemployment is rapidly on the increase. A reduction in output means that the need for labour is reduced. In the early stages of a recession, companies tend to cut back on employee hours, rather than making workers redundant. If companies are forced to reduce their employee numbers, they will initially attempt to do this through natural wastage, putting a hold on hiring, and not replacing workers who leave the company of their own accord.

Thus the demand for new entrants to the market is very limited. The current recession has caused a very limited availability of credit and reduced demand worldwide. It is expected that high levels of debt and the fall of housing prices and equity prices will affect the UK more than many other nations (Bain 2009). What if there were no minimum wage in place? : Without a set minimum wage, the quantity of labour supplied will continue to change according to price, until the level of labour demanded is equal to the level of labour supplied.

That is to say, an equilibrium price will be reached, where supply and demand curves intersect. {draw:frame} Deepak Lal, criticises the minimum wage, stating that it is “an inefficient, well-intentioned but inexpert interference with the mechanisms of supply and demand.. ” References: DEPARTMENT FOR BUSINESS INNOVATION & SKILLS. , 2007. National Minimum WageGuide for Employees [online] United Kingdom. Available from: http://www. berr. gov. uk/files/file53059. pdf [Accessed 23 November 2009] eHOW How To Do Just About Everything.

How Does The Minimum Wage Affect The Economy [online video]. Available from: http://www. ehow. co. uk/video_4974004_minimum-wage-affect-economy. html? cr=1 [Accessed 20 November 2009] NATIONAL MINIMUM WAGE COMMISSION. , 2009 National Minimum Wage. Low Pay Commission Report 2009. (Chairman George Bain). United Kingdom: The Stationery Office. WORD PRESS. , 2009. New Deal Scandal: UK Unemployment Course Scandal and Welfare Reformconcerns [online] 20 August. Available from: http://newdealscandal. wordpress. com/2009/08/20/national-minimum-wage-nmw/ [Accessed 23 November 2009]

Minimum wage is the least amount of pay that a person receives for the job that he/she performs. The minimum wage in Massachusetts is $5.50. A job that pay”s minimum wage offers little or no opportunity for improvement. Majority of the people who work for minimum wage are students, people with little education, or immigrants. Fast food restaurants such as Burger King and Mc Donald”s are examples of jobs that pay minimum wage.

The minimum wage in Massachusetts is $5.50. A job that pay”s you minimum wage usually offers little or no opportunity for improvement. Such a job offers experience in the fields of, how to make a hamburger, French fries, and chicken crisps. The only true experience you get from this type of a job is dedication. In order to show that you obtained this experience you must stick with the job for some time. People will not hire you because of the experience you have fro making French fries, but they might hire you for showing dedication.

It does not come to me as a surprise that the majority of the people who work for minimum wage are either students, people with little education or immigrants. Students work because they need the job, and because they have not yet obtained real experience. People with little education work for minimum wage because that is the only job they can find, in order to have a job that pays more you either need experience or education. Immigrants who come to America may have some education but they can”t find a better job because they do not speak English. Until they learn our language, minimum wage is the only way of supporting them selves.

The most common place to find a minimum wage job is a fast food restaurant. Restaurants such as Mc Donald”s and Burger King are famous for it. What made them famous is not the minimum wage but the fact that low skills are required. Since low skills are required anybody can work there. It is easy to find a job in places such as these but a price does come with it. The managers show little sympathy for scheduling. In most restaurants it”s either their way or no way.

In conclusion, minimum wage is only good when it is your first or second job. If you want real experience, and better pay go through a temp agency to obtain a job in a company. The work will be hard but the paycheck will be much heavier.

How implementation of Minimum Wage affect the economy market BY yuxtangol 25 Statutory minimum wage regulation was first introduced in New Zealand in 1894. Some attempt to control wages had been present since policymakers started believe that the market wages of labour was unfair to the workers. Minimum wage laws dictate a lowest hourly or monthly wage rate that employers may legally pay to workers. For instance, the Minionion government had set a new minimum wages rate of MS900 which intend to ensure that the basic needs of the workers and their families are met.

Since that the growing debates over the imposition of minimum age policy have become a very popular topic with examiners in recent year, therefore we may examine the effects of the minimum wage by looking at the theory behind it. Diagraml shows a classical minimum wage set up in a competitive labour market. Like all other markets, competitive labour markets are modelled by the forces of supply and demand. In this case, workers determine the supply of labours and firms determine the demand of labour. The Minister of Human Resources, Mr Bananaa Yellow claimed that the new minimum wage (MS900) represented an average increase of 18. % compare to the previous minimum wage (MS757. 7), which affecting some 128,500 low-skilled workers in Minionland. But the diagram above illustrates that there will be a decrease in the quantity of from B to D, which resulting in a surplus of labour from D to C. This should make an intuitive sense that an increase of minimum wage raise the input costs of firm so that they are now less willing and able to hire more workers, while they are more people would like to have a Job because of the higher wage rate.

The exceed supply of labour includes both a reduction in employment (A to C) along with the second component consisting of orkers who are drawn into the labour market by the prospect of earning higher minimum wage (D to B). In this case, raising minimum wages rate seems to be wrong as it only benefit some typical high-skilled workers but comes at the expense of those low-skilled workers (typically low-skilled youth) who are shut out of the labour markets.

However, several studies and researches find that the magnitude of negative effect on employment varies across countries due to differences in labour market characteristics and the prevailing economic environment. For Minionion, while they maybe some risk on lower unemployment, this effect is expected to be ransitory and contained, given the strong economic and labour market fundamentals and proficiency. Improvement of the economic and labour markets conditions are expected to increase the quantity demanded of labour by shifting the demand curve from DO to Dl .

Assuming this strategy is going to push the demand curve upward to the same 128,500 amount of the low-skilled workers, thus it will substantially shrink the effects of the new minimum wage rate on unemployment. In fact, there is a lot of arguments claimed that the traditional view of the minimum wage doesn’t hold true in real life. There is the Krueger and Card study that oncluded that “We find no indication that the rise in the minimum wage reduced employment”. (Robert,2013) Most studies find that the minimum wage policy has only a slight ettect on employment but not result in the mass unemployment predicted in the traditional view.

One of the possible assumptions to explain this phenomenon is that the labour demanded by firms and the demand for the product that workers produce is both highly inelastic due to the rapid economic and population growth. Diagram2 above indicates the elasticity of demand on employment and the elasticity of demand on product. In view of the sky-rocketed growth of economic and opulation, hence the firms need more workers to increase production and also productivity to satisfy the demand and maximise their profit, even though they are forced to increase wages.

Since the demand of product is highly inelastic, the firms can also pass on the increase in wage to consumers in the form of higher prices without lay off any workers. The magnitude of price increase would also be constrained by the adjustments that made by the larger firms which tend to be less affected by the imposition of new minimum wage rate. On the contrary, the Smurfland government does not favour setting a minimum wage. They believe that imposition of minimum wage policy will reduce employment in affected industries and affected groups of low-skilled workers.

Hence, the Smurfland government believe that it is better to focus on the supply sides (workers), rather than emphasis on the wage setting institution. Their interventions focus on enhancing the skills of low- wage workers, thus increasing their productivity through training and development. Rapid development in science and technology boost the demand for high-skilled workers, it resulting in wages premium for more highly educated workers. Therefore, ther things unchanged, the wages rate is believed to be positively related with the education and productivity of the workers.

Thus we can tell from diagram3 below, assume that the supply of labour is inelastic, while the technology advance increase the demand of skilled workers, the demand curve shifts from DO to Dl, putting a pressure on employment upward from QO to QI . And by enhancing skills, more workers meet the prerequisite for higher wages, which results in raising the equilibrium wages rate from WO to WI . Therefore in order to achieve the objectives of reduce poverty and improve living standard of workers, it is important to uarantee those low-skilled workers to undertake productivity-enhancing measures.

Skill enhancement policy is believed that can improved supply-side performance and achieved sustained development of economic. It is important to note that enforcement of this policy won’t accompany with negative effects like inflation and unemployment. It improves both quantity and quality of supply and labour, make the labour market more competitive and flexible so that it is more able for labour force to match the demand. Provided training, especially for those who facing problem of structural unemployment, is expected to improve the occupational mobility of orkers.

Additionally, a well-educated workface also plays an important role as a magnet to attract foreign investment flows into the economy. In order to raise the low-skilled worker’s living standards, the most efficient way is to increase their incomes to levels that fulfil their basic needs. Undeniably, in the long run, the income levels reflect the ability to produce high quality goods and services. Make no mistake that improvement in income levels and living standards cannot be achieved without expansion in outpu t.

Studies ot IJ e n te Nations Human Development Programme found that the ratio of the amount of children of fficial secondary school age enrolled in school, to the amount of children of official secondary school age in the population, is higher in developed nations than it is in developing ones. ( Radcliffe,2012) Hence, invest in education and training for workers is not only benefits in increase their earning potential, but also assist us to transform into high income, high productivity country. Overall, it concludes that both policies could achieve the same goals in different way.

However, when we talk about efficiency, we may find that increase the equilibrium wage rate by raising the skill level of workers is actually challenging in practice. For instance, without intervention of government, we can’t guarantee that the firms will take the right steps to increase productivity, instead of relying on the low-cost workers. Besides, skill enhancement policy require government to spend more budget on investing education, and it also takes longer realisation period to see the results.

Due to the greater opportunity costs and less efficiency, it could be evaluated that skill enhancement policy may not be the first choice to reduce poverty. As contrasted, setting a minimum wage rate is envisaged to have obvious effect in educing poverty since it directly increases low-skilled workers wage rate. Firm may be encouraged to provide training to improve the productivity of workers since the relative cost between capital and labour narrows. These changes would facilitate the transformation of nations into high productivity and high income economy.

We may conclude that set up a minimum wage will probably have slightly negative effect on unemployment. But with this small opportunity costs, it may boots our economy and improve the living standard of most workers. In other words, the benefits of minimum wage far outweigh the negatives. There should be a simple rule in life that if you are willing to work hard, you should be able to feed yourself. Minimum wage policy is envisaged to be a positive step towards encouraging a fairer wage structure.

And other productivity-enhancing measures such as provision of training to up-skilled workers will further complement the minimum wage policy to hit its target. I believe that minimum wage policy is well-positioned to achieve its goal, with government support, as well as proper supervision and enforcement. Reterences Oganisian, A. 2013. Economics 101 : Taxes, Minimum Wages, and Why You Shouldn’t Boycott Sweatshops – TheCollegeConservative. [online] Available at:

http://www.investopedia.com/articles/economics/09/education-training-advantages.asp

http://www. s-cool. co. uk

https://www.tutor2u.net/economics/reference/economic-growth-an-introduction

http://www.bnm.gov.my/

ABSTRACT The purpose of this research paper is to analyze the minimum wage in Ontario based on the current minimum wage is $10. 25 in Ontario. The minimum wage mainly happens to the unemployed women and the young. The research on the minimum wage can permit people to contribute to the discussion about the ongoing minimum wage policies in Ontario and the relevant impacts of raising the minimum wage in this province. This research paper will be divided into three parts. Firstly, this research paper will represent the introduction to the writing significance.

Secondly, this paper will analyze the change of minimum wage in Ontario, which also be divided into third sub-parts. In the first place, this paper will introduce the theoretical framework. In the second place, this paper will introduce the general situation on the change of minimum wage in Ontario. Next, this paper will analyze the importance of minimum wage in the labor markets. And a conclusion will be made in the end. Research on the Minimum Wage in Ontario 1. Introduction

The minimum wage is generally considered as a controversial policy tool[1]. The minimum wage is one of potentially useful tool for redistribution of social wealth because it can increase the wages of low skilled workers[2]. However, other factors of production may become the expense for the increase of low skilled workers’ wage, such as the wages of higher skilled workers and capital. Therefore, it is essential to analyze how the minimum wage becomes $10. 25 today and the impacts of the change of it.

The purpose of this research paper is to analyze the minimum wage in Ontario, which can provide a chance for people to contribute to the discussion about the ongoing minimum wage policies in Ontario and the relevant impacts of raising the minimum wage in this province. Meanwhile, the change of minimum wage in Ontario can be influenced by some factors. 2. The Analyses of the Change of Minimum Wage in Ontario In labor economics, the minimum wage is often analyzed in a competitive labor market model and a model in which the employers are granted with some degree of monopsony power. 1. The Theoretical Framework on Minimum Wage

The competitive labor market model involves the demand side and supply side. The demand side refers to the demand of labors of all the firms in the market. The supply side can illustrate that firms in the market have to pay higher wages to attract and retain workers. In the graph of competitive labor market model, there are the market supply curve and the demand curve, and these two curves have a cross point, which can be considered as the equilibrium wage rate. When a minimum wage is introduced in a competitive labor market, the reduction of employment will rely on the steepness of the labor demand curve.

Meanwhile, the decrease in employment will lead to the increase in the wage rate in the competitive labor market[3]. 2. The General Situation on the Change of Minimum Wage in Ontario In 1991, the then current level of minimum wage in Ontario was $5. 40 per hour[4] and the relevant authorities and governments in Ontario proposed that the minimum wage in Ontario should be raised to “a level of 60 percent of the average Ontario wage by 1995”, which made Ontario become the province with the highest minimum wage level in Canada[5].

However, during the period from 1995 to 2002, due to conservatives in office in Ontario, the minimum wage did not increase[6]. Theoretically, all the people in Ontario may suffer minimum wage. However, in practice, most of people suffering minimum wage are low skilled individuals holding low-paying jobs[7], including students, liquor servers, homeworkers, etc. What’s worse, in Ontario, the minimum wages of students’ liquor servers and homeworkers are less than general minimum wage. For example, the minimum wage of liquor servers is about $1. 00 per hour less than general minimum wage.

Over the past two decade years, some significant changes of minimum wage have happened to Ontario. Firstly, the liberal government raised the minimum wage from $6. 85 per hour in 2003 to $8. 00 per hour in 2007. Meanwhile, the Ontario Employment Standards Acts became effective in March, 2010, which regulates that the general minimum wage in Ontario is $ 10. 25 per hour. Nominally, the minimum wage increased by 50% from 1995 to 2010, but due to the increase of the price level and appreciation of dollar, the real value of the minimum wage just raised by 10% during this period. According to

Reid, the nominal minimum wage between 2007 and 2010 increased 28% from $8. 00 to $10. 25, however, due to the increase of price level, the real minimum wage increased by 23% during this period. As a result, from the above analysis, it is reasonable to gain the conclusion that the nominal minimum wage in Ontario increased to larger extent, however, the real increase of minimum wage in Ontario was not significant. 3. The Impacts of the Change of Minimum Wage in Ontario This part will analyze the employment effects and the distributional effects of the change of the minimum wage in Ontario analyzed in the prior part.

There are some discussions on the employment effects of minimum wage. Some people hold the opinions that minimum wage has a negative impact on employment, but other people think that there is little impact on employment impact. According to this paper, there is indeed a negative impact of the increase of minimum wage on the employment. Canadian evidence can prove that a 10% increase in the minimum wage probably lead to the reduction of the employment of students by 3%-6%[8]. On the contrary, the effects on the young adults are slight.

Since the Ontario is the province with the highest minimum wage in Canada, the adverse employment effects have been exacerbated. What’s worse, the unemployment rate has risen due to the increase of minimum wage in Ontario[9]. Moreover, the relationship between minimum wages and poverty is too vague. For example, the people suffering minimum wage are always very poor and due to the minimum wage, the wealthy gap between the poor and the rich become larger and larger. However, due to the increase of minimum wage, some of social wealth has been transformed to the poor to realize the redistribution of social wealth[10]. . Comparability to other province Minimum wages are diverse among different province in Canada. British Columbia’s minimum wage is $10. 25 that is the same as Ontario’s and Alberta is $9. 75 that is lower than Ontario’s[11]. The unemployment rate of Ontatio is 7. 8 , British Columbia’s is 6. 7 and Alberta’s is 4. 6. [12] This evidence might lead to that lower minimum wage plays a role in the low unemployment rate in Alberta. But since the minimum wage in Ontario is the same as British Columbia’s, the unemployment is different though. The effect of minimum wage on uneployment is ambuglous. . Conclusion In conclusion, lower-skilled people in Ontario, including the students, homeworkers and liquor servers, are suffering minimum wage and even, their minimum wage level is less than general minimum wage level. Since 1990s, there have been some continuous and significant nominal changes happening to minimum wage in Ontario. However, in fact, due to the increase of price level and appreciation of dollar, the increase of minimum wage in Ontario is not significant. Meanwhile, the changes of minimum wage have some effects on employment and redistribution of social wealth.

Although the increase of minimum wage in Ontario may increase unemployment rate, it can realize the redistribution of social wealth to narrow the wealthy gap between the rich and the poor. Bibliography Cousineau Jean-Michel, Tessier David and Vaillancourt. 1992. The Impact of the Ontarian Minimum Wage on the Unemployment of Women and The Young in Ontario. Industrial Relations: 47(3), 559-566. Gunderson, Morley. 2007, Minimum Wages: Issues And Options for Ontario. Ontario: Ontario Ministry of Finance. [cited on Feb. 28th, 2013]. Available from World Wide Web:< http://keqianxu. okee. com/1306641. html>. Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320. Reid Frank. 2012. Monopsony in the Labour Market and Minimum Wages. Department of Economics and Centre for Industrial Relations& Human Resources. Shannon Michael, and Beach Charles. 1995. Distributional Employment Effects of Ontario Minimum-Wage Proposals: A Microdata Approach. Canadian Public Policy: 21 (3), 284-303. Susan Munroe. 2013. Minimum Wage in Canada.

Available from About. com: Statistics Canada, Labour Force Survey. 2013. Annual Average Unemployment Rate Canada and Province. Available from Government of Newfoundland and Labrador website: . ———————– [1] Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320 [2] Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320. [3] Reid Frank. 2012.

Monopsony in the Labour Market and Minimum Wages. Department of Economics and Centre for Industrial Relations& Human Resources. [4] Cousineau Jean-Michel, Tessier David and Vaillancourt. 1992. The Impact of the Ontarian Minimum Wage on the Unemployment of Women and The Young in Ontario. Industrial Relations: 47(3), 559-566. [5] Shannon Michael, and Beach Charles. 1995. Distributional Employment Effects of Ontario Minimum-Wage Proposals: A Microdata Approach. Canadian Public Policy: 21 (3), 284-303. [6] Reid Frank. 2012. Monopsony in the Labour Market and Minimum Wages.

Department of Economics and Centre for Industrial Relations& Human Resources. [7] Cousineau Jean-Michel, Tessier David and Vaillancourt. 1992. The Impact of the Ontarian Minimum Wage on the Unemployment of Women and The Young in Ontario. Industrial Relations: 47(3), 559-566. [8] Gunderson, Morley. 2007, Minimum Wages: Issues And Options for Ontario. Ontario: Ontario Ministry of Finance. [cited on Feb. 28th, 2013]. Available from World Wide Web:< http://keqianxu. bokee. com/1306641. html>. [9] Gunderson, Morley. 2007, Minimum Wages: Issues And Options for Ontario.

Ontario: Ontario Ministry of Finance. [cited on Feb. 28th, 2013]. Available from World Wide Web:< http://keqianxu. bokee. com/1306641. html>. [10] Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320. [11]Susan Munroe. 2013. Minimum Wage in Canada. Available from About. com: [12] Statistics Canada, Labour Force Survey. 2013. Annual Average Unemployment Rate Canada and Province. Available from Government of Newfoundland and Labrador website: .

Introduction

In my opinion, minimum wage should be raised.  It is time for the United States to stand up for the original purpose of the Fair Labor Standards Act.  The low wage is hurting the economy as a whole because it is squeezing the lower income level so tightly that they have to make choices between paying rent or buying food.  The three main reasons for this increase are as follows.  First, an increase in minimum wage would directly impact those at the bottom of the economic ladder.  Second, by increasing minimum wage, you also increase the value of work.  Third, because the cost of living has increased so much, the cost of work must follow its lead.  Due to these reasons, minimum wage must be raised.

History

In 1938, the Fair Labor Standards Act was passed.  This was a reaction the hard work of women like Jane Adams and Eleanor Roosevelt who were trying to end child labor and increase the standard of living in the poorest communities. The labor unions were advocating for it as early as the late 1800’s when women in the Lowell factories claimed they deserved equal pay and treatment.  Its passage was also influenced by industrial disasters like the Triangle Shirtwaist Factory fire in 1911, which killed many of the young workers in New York.  The Jungle written by Upton Sinclair about the struggles of the working class in Chicago, influenced politicians and communities and caused them to start looking at its workers in a different light and with increased understanding.

It set the maximum work week, standards of child labor and overtime pay.  It also created minimum wage.  This is the idea that there is a minimum standard of pay that everyone should be given.  It was set at twenty five cents an hour.  The act succeeded in many ways but it failed in keeping pace with inflation.  Originally, this was written into the act.  Now, raising minimum wage to keep pace with inflation has become a political issue. Usually democrats are in favor of raising the wage and republicans are against it.  Because the federal government has failed to protect its people by raising the wage, many states and cities have taken it upon themselves to raise their own wages.

Argument against

The conservative argument against raising the wage is primarily economic.  They say this action hurts the whole economy and doesn’t help the lower classes at all. (Chapman)  Their argument is that if employers have to pay more, they will limit the employees they have or even take their work overseas, which is a valid threat.  They claim that in reality, the people who benefit are in higher economic classes because they learn to manage their businesses more efficiently and the boom lines their pocketbooks.

My Argument

As my thesis demonstrates I disagree with the conservative stance.  I feel that an increase in the minimum wage would help the people intended.  It would add value to what they do and keep up with the cost of living, as it was originally designed to do.

The lower income families in the U.S. are hurting. “Today more than 28 million people, about a quarter of the workforce between the ages of 18 and 64, earn less than $9.04 an hour, which translates into a full-time salary of $18,800 a year—the income that marks the federal poverty line for a family of four.” (Working and Poor)  It is extremely difficult, if not impossible to raise a family on that amount of money.  The argument has been made that you can make more money on welfare than working for minimum wage.  What kind of lesson does that teach?

So, is the answer raising minimum wage.  According to Jeff Chapman in his brief for the Economic Policy Institute, it is.  “If the federal wage were raised to $7.00, the bottom 40% or households would receive nearly 60% of the benefits.” (Chapman)  He goes on to say, “Raising the minimum wage provides income support to families in need.  While it is important to understand that the minimum wage should not be judged solely on its efficiency at targeting low-income families, research shows that it does just that.”(Chapman)

Business Weekly agrees with these finding. “Lifting the minimum wage by $1.50 an hour, would boost the incomes of 10 million workers.” (Working and Poor) My research indicates that raising the minimum wage would be an effective way to target lower income workers and increase their income.  This would help offset the cost of inflation, as I will prove is a necessity.

Originally, the wage was designed to increase as the cost of living increased.  This system makes sense.  If things cost more, people need to make more money to afford them—not luxuries, necessities.  If this adjustment is not made, the consequences affect the family, not just the worker. “Some experts on homelessness say the numbers are growing because of the widening gap between low pay and high rents.” (Kaufman) “Real pay for the bottom 10 percent of wage earners rose less that one percent in adjusted dollars from 1979 to 2003, according to the Economic Policy Institute. (Kaufman)

If the wage doesn’t keep up, how can people afford rent?  If I make just enough to cover my bills, and my rent increases but my salary doesn’t, I have no choice.  I would have to get another job, which may not be a possibility, try to work overtime, which my job might not allow, or move.  What if I live in the cheapest apartment available?  This is the cycle that must be stopped. It leads to hopelessness, debt and in some circumstances, homelessness.

“Even if the minimum wage were not well-targeted at helping those in need, it serves an important role in the U.S. economy and society.  It is a fundamental statment of principle about the value of work, opportunity and the responsibilities of employers.” (Chapman) Increasing minimum wage validates the worker.  As the girls in Lowell were looking for acknowledgement of the value of their work, so do the workers of today search for validation for what they do.

When the government raises the wage, they are sending a clear message that they value the workers and understand their position.  The C.E.O. of Costco is quoted as saying, “We no longer have a motivated working class.” (Working and Poor)  This is a huge problem.  If you can’t take pride in your work, what’s the point of working at all, especially if you can take advantage of the welfare system? If no one values what you do, why try to do any better than the bare minimum?

Raising the minimum wage demonstrates employer accountability.  The government is making them responsible for the people their success rests upon.  “No employer should be allowed to unreasonably profit by exploiting the lack of negotiating power of low-wage workers.” (Chapman)  Labor simply has no power anymore.  The unions have been broken and they have no voice.  Someone has to hold the employers accountable.  Someone must step forward for the workers.

An increase in the wage would do just that.  As I have shown, it does have a direct affect on those in the deepest need. “Everyone should have the opportunity to earn a decent wage.  No American should be compelled to work at a rate that amounts to the federal poverty level.  This is equally true for a middle-class youth working to raise money for college as it is for a single mother supporting a family.” (Chapman)

Conclusion

Minimum wage is one small part of the Fair Labor Standards Act that was designed to protect the worker.  Society saw its people falling through the cracks and they stood up for those people, claiming that everyone who works hard deserves a chance to succeed.  Minimum wage is the foundation of that success.  I have shown three strong reasons for the need to increase minimum wage.  The first is that raising the wage directly affects those in the greatest need.

They do benefit from a raise as it corresponds to the raise in the cost of living. My second reason demonstrated this.  As the cost of living increases so should the minimum wage.  This way, workers can easily adjust their earnings to cover new expenses and not have to make hard decisions that could greatly impact their families.  The third reason is philosophical.

Adding value to the worker validates the job that is being done.  When employers are held to greater accountability, the working class feels they are appreciated.  This is so important for our society.  Welfare shouldn’t have to be an option for a family willing to work and take part in the economy.  Without a raise in the minimum wage, this might be a serious threat.  “Equality means dignity.  And dignity demands a job and a paycheck that lasts through the week.” (Weisman)  I feel this quote from Dr. Martin Luther King Jr. conclude my thoughts on this subject.