Macroeconomics Should Minimum Wage Be Raised - 823 Words

Macroeconomics is the study of the behavior of an economy at the aggregate level. Macroeconomics considers the industrial sector, the services sector or the farm sector, but not specific parts of any of these sectors. The factor studies might include inflation, unemployment, and industrial production, often with the focus the effect of government policy on these factors. That leads me to an article that I read in Businessweek titled Making the Economic Case for More Than the Minimum Wage, written by Peter Coy on February 13th, 2014. The article starts with talking about President Obama’s 2014 State of the Union address calling for an increase in the minimum wage to $10.10 per hour. There was also a reference in the 2013 State of the†¦show more content†¦They believe that labor laws distort the market and a free market provides the most opportunities for both consumers and producers. The article talked about the laissez faire case, that minimum wage is counterproductive. â€Å"It steals jobs from the most vulnerable people; those who could get hired a $5.00 per hour, but not at $7.25 or $10.10 per hour. Economic class teaches us and the article points out that setting the price of labor above if equilibrium level causes supply to exceed demand and will lead to more unemployment. Many people believe that having a â€Å"wage floor† is a job killer. The article states a 1994 study by David Card of the University of California at Berkeley and Alan Krueger of Princeton. Both compared employment at fast-food restaurants in the New Jersey area. They had enacted increases in the minimum wage and those similar restaurants in Pennsylvania keep their wages the same. The result was that no reduction in New Jersey employment. The article also talked about the Card-Krueger study. The most recent studies show that if there are negative effects on employment, they would be small. It showed that higher wages reduce turnover and increases job satisfaction. There is a cost to business with turnover. It can be a trade-off to pay a higher wage to avoid the cost associated with job searches and new employee education. The article makes reference to 17 million workers being directlyShow MoreRelatedProviding A Living Wage At America Versus Minimum Wage957 Words   |  4 PagesProviding a Living Wage in America versus Minimum Wage Minimum wage is the standard amount the government sets as the lowest an employer can pay an individual per hour. A low minimum wage can be unsustainable if it does not meet the cost of living also known as a living wage. Living wages should not only apply to employees of companies who are engaged in business with businesses or government agencies of that area, but it (living wages) should be made into law, that all business must provide aRead More Do Minimum Wage Laws Increase Unemployment? Essay1188 Words   |  5 Pagescurrent minimum wage, as set by federal law, is less than $15 per hour. Is this enough for any person to provide for themselves and their family? Laborers earning the minimum wage dont seem to think so and are wanting an increase in the required minimum wage so they will be paid more by their employers. The Bureau of Labor Statistics reported in 2015 that 3.6 million workers earned below or at the minimum wage (Minimum Wage Workers). At first it sounds wonde rful for minimum wage workers toRead More The Negative Effects of Raising the Minimum Wage Essay1552 Words   |  7 PagesIf we took away the minimum wage, we could wipe out unemployment completely because we would be able to offer jobs at every possible skill level. -- Michele Bachmann Proponents of raising the minimum wage claim that if the minimum wage was raised, then many economic and social problems would be alleviated. 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