Why is minimum wage good

Not only will happier employees lead to a more cohesive, productive workforce, but also could result in higher levels of customer satisfaction. Opponents to increasing the minimum wage argue small businesses would be adversely affected by such a drastic increase in the minimum wage. Another argument against the Raise the Wage of Act is the vastly different state economies, with drastically different costs of living.

A uniform minimum wage could disproportionally impact a small business in a state with a low cost of living. For example, to have the same minimum wage would be impractical in California and Oklahoma, as the average value of a home, according to Zillow. As the federal minimum wage debate continues to spark strong opinions, advocates on either side will continue to assert many reasons in support of their positions.

Those opposing a minimum wage at all argue market forces should control. If the competition is fierce for qualified employees, an employer may have little choice than to adjust wages to prevent departures. As Slate's senior business and economics correspondent Jordan Weissman tweeted , "From a wonk perspective, one frustrating thing about this CBO report is that it doesn't actually include all of the information you'd need to figure out exactly how they reached their conclusions.

Bloomberg economy reporter Katia Dmitreva agrees the "the stuff under the hood" is strange. That's because, she says, "CBO changed methods" to highlight the average instead of the median, which "skews the number higher, because they're likely including studies that show a much bigger job loss impact.

There are two major hurdles: opposition on both sides, and an arcane Senate rule. Let's start with job loss, which CBO said will be 1. Who knows what methods they used to get there, but it doesn't really matter. There is plenty of existing rigorous research showing the employment impact of raising the minimum wage is negligible, if anything.

A number of recent studies back this up. A survey of state-level minimum wage changes over four decades found wages and job numbers stayed mostly level. Another sweeping study from UC Berkeley found that raising the minimum wage is good for everyone, and did not detect significant negative employment effects.

That's one-tenth the size of CBO's estimate, or as Dube puts it, "quantitatively close to zero. So with economists like Dube and Neumark finding relative agreement, how did CBO end up with an outlier almost four times as high as conservative estimates?

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Microeconomics Minimum Wage by State. Partner Links. Efficiency wages occur when employers pay higher than the minimum to attract skilled workers, boost productivity, and increase loyalty. What Is a Living Wage? Living wage refers to a theoretical wage level that allows an individual to afford adequate shelter, food, and other necessities. What Is a Maximum Wage? A maximum wage is a price ceiling on compensation paid to employees. What Is a Minimum Wage? The minimum wage is a legally mandated price floor on hourly wages, below which nonexempt workers may not be offered or accept a job.

Positive Economics Positive economics is the study of economics based on objective analysis of what is occurring and what has been occurring in an economy. The other side starts by arguing that businesses typically have a good deal of power over how much they pay their workers —especially low wages workers who are often not protected by unions and face steep competition for jobs.

As you might imagine, both sides have managed to find data that shows that they are right. But over the years the debate has tended towards showing that job loss effects from minimum wage increases are pretty small, although they can be disproportionately worse for young people. This site uses JavaScript. Please enable it to get the full experience. Learn Arrow. Map Sections. Your Government. We use cookies on our website. However, you may visit "Cookie Settings" to provide a controlled consent.

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