America and the Minimum Wage

2) Introduction – The introduction should contain a ‘hook’, a general quote or interesting fact. Then two or three broad, general statements, and the thesis statement.

The federal government has imposed a minimum wage since 1938, and nearly every the state impose their own minimum wages. These laws prevent employers from paying wages below a mandated level. While the aim is to help workers, decades of economic research show that minimum wages usually end up harming workers and the broader economy. Minimum wages particularly stifle job opportunities for low-skill workers, youth, and minorities, minimum wage is counterproductive and causes more harm than good.

3) Body of the paper – your three major points. Here you present the information you have collected, state the purpose of the topic, and assess its impact on the different economic actors. Various sources should be used and clearly listed.

1- Proponents of a higher minimum wage often argue that that it’s difficult to support a family when the only breadwinner earns the current minimum wage.

This claim is flawed, for a couple of reasons. First, for a minimum-wage increase to help a single breadwinner earn money for his or her family, the worker must have a job and keep it at this higher wage. Increases in the minimum wage actually redistribute income among poor families by giving some higher wages and putting others out of work. A 1997 National Bureau of Economic Research study estimated that the federal minimum-wage hike of 1997 actually increased the number of poor families by 4.5 percent. Also a relatively small percentage of the workers directly affected are the sole breadwinner in a family with children.

A study by the Employment Policies Institute shows that in California, for example, only 20 percent of the workers who would have been directly affected by a proposed 2004 minimum-wage increase were supporting a family. The other 80 percent were teenagers or adult children living with their parents, adults living alone, or dual earners in a married couple.

2- We often see capitalisim defined as a system based on the private ownership of the means of production. Capitalism is about much more than this however. One of the major defining features of capitalist economy is the use of wage-labor and the existence of labor markets. Understanding the role of labor markets in capitalism is critical, and this is best achieved by understanding the historical development of capitalist economy.

Workers are no longer paid for the value of what they produce, nor do they retain rights to ownership of what they produce, instead they are paid by how little compensation someone else is willing to do the same job for. Just as it is understood that market competition drives the price of other commodities down, it has the same impact on labor when labor is a commodity. Labor markets and other commodity markets are two separate and distinct markets. By separating the cost of labor from the value of labor, capitalists are able to increase profits. Profits are generated in part by the difference between the cost of labor and the value that the labor has created.

By having separate markets the demand for jobs creates different pricing on labor than the demand for goods and services creates on the products of labor. It separates people from the value of what they produce, so no matter how much value a worker creates, their wages are governed by the labor market, not what they produce. With two different markets the criterion for compensation is completely changed. Wage-laborers don’t receive the “fruits of their labor” instead they are paid by “job performance”. Job performance is judged, not in relation to the product of the worker’s labor, but in relation to other workers in the market. Thus, under the capitalist system, workers’ incomes become socialized.

3- Although many see raising the minimum wage as a “first step” to instituting living wage laws, this report shows the country to be divided on the best ways to tackle poverty. The Los Angeles area has benefited greatly from instituting a living wage ordinance. Job loss was minimal, benefits were solid for workers covered, there was no decline in the number of firms bidding for governmental contract and the city was not impacted in its ability to retain or attract employers willing to pay decent wages. By increased its minimum wage, a correlation became evident between job loss among the most vulnerable employees, and wealthy teens displacing unskilled employees.

Although movements are appearing all over the country at city halls and on college campuses in favor of wage increases, critics make a strong argument for keeping the status quo raising concerns about increased labor costs negatively impacting the economy, employers moving their businesses to areas of the country that do not embrace “living wage laws”, or the possibility that if labor costs too much employers will stop hiring or become unprofitable. They attempt to conclude that the poor will not benefit from these increases

4) Conclusion of your research paper – Should sum up the reasons you have given that support your thesis. You should add insight by giving some thoughts on the implications of what you have just written or proven.

Although economists generally focus on the negative effects of the minimum wage on vulnerable workers, there is another group that also deserves to be considered: employers. How can we justify forcing employers, the very people who are taking risks to provide jobs in the first place, to pay a higher wage? If “society” decides that unskilled people should be paid more, why single out employers rather than, say, taxpayers in general, as the people to pay them?…/job-search-strategy/salary-vs-cost-of-living”Montana minimum wage going up 10 cents in January”. Business Week.

October1, 2010. “Montana’s minimum wage climbs to $7.35”. Billings Gazette. January 6, 2011. Joint Economic Committee, “50 Years of Research on the Minimum Wage,” February 15, 1995,….

Joint Economic Committee, “50 Years of Research on the Minimum Wage,” February 15, 1995,…. Gary Becker, “On Raising the Federal Minimum Wage,” November 26, 2006, 37 Barry T. Hirsch, Bruce E. Kaufman, and Tetyana Zelenska, “Minimum Wage Channels of Adjustment,” Institute for the Study of Labor (Germany), Discussion Paper no. 6132, November 2011.