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A controversial subject debated in the U.S and Canada is the plan to increase the minimum wage up to 15 Dollar/hour. Several states passed their own minimum wage raise. The debate about the minimum wage involved employees and employers.
The classical approach for this controversial matter can be found in the university business courses. It hurts the economy for many reasons: First, it will encourage people to drop out of education. Second, it will increase the number of unskilled workers, finally, it’s against free market principles that determine the wage level based on supply and demand. The opposite approach argument based on basic, and human rights of workers. Supporters claim that increasing the minimum wage will benefit the local and national economy.
Personally, my opinion about the minimum wage is cloudy. I am not sure that I will answer by agreeing or disagree on that matter. I would like to discuss a few points briefly leaving for the members the change to fill between the lines by their comments.
In a free market economy, the rise of the minimum wage will hurt the employers and employees. The reason is that without a mechanism to curb down the prices, and the inflation followed absorbed by the rise in the prices and won’t benefit the employees. The employers respond could be ranged from cut down employment, working hours and filling their job vacancies with part-time, and temporary workers. Employers will raise the prices on consumers, the result is a possible loss of sales.
I was reading one time that increases in McDonald s Double Mac 15-17 cents can be enough to cover up to 15 Dollar minimum wage raise. However, I am not sure about the accuracy of such opinions and the supporting data available. Many employers provide health insurance and benefits for workers that ignored by legislators. Meanwhile, many others pay less than 3 Dollars without any benefits because workers collect tips. We can find this pattern very common in restaurants. Let us not forget that tips mostly in tax-free money.
The increase in the minimum wage must be based on economics, not politics. It needs to be balanced, fair to employees, but not hurting employers. The planners should take the economy into consideration. The Global economy is still in recession since 2007 Subprime Mortgage crisis.
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The classical approach for this controversial matter can be found in the university business courses. It hurts the economy for many reasons: First, it will encourage people to drop out of education. Second, it will increase the number of unskilled workers, finally, it’s against free market principles that determine the wage level based on supply and demand. The opposite approach argument based on basic, and human rights of workers. Supporters claim that increasing the minimum wage will benefit the local and national economy.
Personally, my opinion about the minimum wage is cloudy. I am not sure that I will answer by agreeing or disagree on that matter. I would like to discuss a few points briefly leaving for the members the change to fill between the lines by their comments.
In a free market economy, the rise of the minimum wage will hurt the employers and employees. The reason is that without a mechanism to curb down the prices, and the inflation followed absorbed by the rise in the prices and won’t benefit the employees. The employers respond could be ranged from cut down employment, working hours and filling their job vacancies with part-time, and temporary workers. Employers will raise the prices on consumers, the result is a possible loss of sales.
I was reading one time that increases in McDonald s Double Mac 15-17 cents can be enough to cover up to 15 Dollar minimum wage raise. However, I am not sure about the accuracy of such opinions and the supporting data available. Many employers provide health insurance and benefits for workers that ignored by legislators. Meanwhile, many others pay less than 3 Dollars without any benefits because workers collect tips. We can find this pattern very common in restaurants. Let us not forget that tips mostly in tax-free money.
The increase in the minimum wage must be based on economics, not politics. It needs to be balanced, fair to employees, but not hurting employers. The planners should take the economy into consideration. The Global economy is still in recession since 2007 Subprime Mortgage crisis.
End
