What is the point of raising minimum wage?
Do you realise that people on minimum wage get help such as tax breaks and housing benefit to help them pay the rent. What this means is that the govt. is having to collect higher taxes from other people and companies. Poor people will not get any extra money when everything is added up. The extra money they get paid will match the reduced benefits. So companies that only pay the minimum are being subsidised by other companies and higher earner tax payers paying more taxes. The govt. wants to reduce the tax bill.
What are the pro and cons for raising the minimum wage?
Pro: The minimum wage ensures that mentally disabled/challenged workers are not legally taken advantage of, in terms of pay. Con: The economic value of a job is not changed by the minimum wage. Raising the minimum wage simply raises the prices of goods & services (inflation) and increases the attractiveness of foreign outsourcing. The minimun wage is a great campaign issue because most voters want/expect a raise. In reality, it is a worthless promise of increased wealth. In relative, inflation adjusted terms, the minimum wage earners will still be poor and have the same buying power.
Minimum wage raise cause inflation?
That doesn't cause inflation. What makes inflation is more money supply. Sure the poor would be able to spend more with a higher minimum wage, but it wouldn't affect spending/money in the economy too much. A bigger effect that would result in inflation is increased money supply. More money in the economy means inflation-- with more dollars printed (much of it because of lower intersest rates) then inflation enters. Also national debt can lead to inflation due to devaluing of dollar. And minimum wage going up is used to help people deal with inflation so no inflation is not caused by any minimum wage increase.
Does raising the minimum wage improve poverty?
Raising minimum wage won't necessarily reduce poverty reasons are 1) Only 10% of American workforce are paid minimum wages for their work so that minimum wage will only affect them 2) The companies who hire the minimum wage staffs will increase their price of the products and services so guess what they will have a little more money but still can't buy what they want because the products have gotten expensive. The concept is if minimum wage is raised it won't really affect the employers cuz someone else has to pay for it. Kids needs not to watch too much TV and play video games. That will bring them back to earth. School should be their life and they need to understand that only education can take them places. They should never be shown weapons and parents should stop talking about crime violence and weapons in front of them. While its fun to show them all we need to know that their mind is so young that it tends to think its cool. Did it help?
Wouldn’t raising the minimum wage economically raise the price of everything else including taxes thereby making things worse for people?
Raising the minimum wage would raise the prices of a lot of things, but not everything and not by nearly as much as the increase in the minimum wage.Most businesses don’t have anyone making minimum wage or close to it. Only 3.3% of all hourly workers in the US make at or below minimum wage. At your doctors office, even the receptionist (or whoever the lowest paid person is) is probably making twice minimum wage. The same thing is probably true in most professional offices, accountants, lawyers, engineers. There might be some people on the cleaning crew or a couple of people making near minimum wage, but most employees are making more. Even in blue collar jobs, most workers are likely making at least a dollar or two more than minimum wage. Granted, if minimum wage were raised to $15 per hour or even $10 per hour, there would be a lot more jobs paying minimum wage that are currently paying say $9 an hour now.Characteristics of minimum wage workers, 2015Most of the minimum wage workers are concentrated in the service industry, and most of them in the food service industry. Even in the food service industry, wages only make up roughly 25–40% of total costs. So, basically if minimum wage was raised from the current $7.25/hour to $10 per hour, the cost of your burgers and pizza might rise 10 -15%, maybe less. (40% increase in wages times 25% to 40% of the cost) I recall reading somewhere that if minimum wage were to be raised to $10.10 an hour as Obama proposed, Papa John’s would have to increase the cost of a large pizza by something like $0.50. But, your rent/mortgage won’t increase. Your car payment won’t increase. Your health and car insurance won’t increase. The cost of most of the stuff you buy won’t increase.The average American spends roughly 10% of their budget on food. Food Prices and Spending Based on the numbers discussed in the previous paragraph, food prices might rise by 10%. So, most people might see their average monthly expenses increase by 1% (which could be reduced to even less by buying more groceries and eating less fast food). Minimum wage workers would increase their pay by 40% and people making more than $7.25, but less than $10 (and probably more people who currently make between $10 and $15 per hour) would also get a pay raise of less than 40%.Bottom line: Most people probably wouldn’t even notice the difference in prices, but people who are on the low end of the wage scale would see a big increase in pay.