Minimum Wage Essay - 2213 Words

Introduction This critical literature review will focus on the impact of the National Minimum Wage on employment. This is an area we have had to familiarise ourselves with more and more throughout the last ten years because of the controversial effect of its instalment in April 1999 and its ever increasing minimum wage amount which causes most concern. The application of a few statistics should help summarise the ever increasing minimum wage and the sheer scale of people affected by its introduction. The national minimum wage has increased by a staggering 59% in the last ten years; from  £3.60 in April 1999 to  £5.73 in October 2008. (HRM, 2008) According to George Sayers Bain (1999) as from April 1999, the year of its instalment , â€Å"some†¦show more content†¦Research from Wilson (1989) has suggested it could lead to consequential job losses. To support Wilson’s suggestion, that a negative effects exists, is the assumption derived from the supply and demand theory. Illustrated below is a diagram similar to that of the research of Power P (2005). When you raise the cost of something (i.e. the minimum wage), demand to employ more workers declines which therefore would imply a negative effect on employment. Cox’s (1999, cited by Pavlenkov, 1999) implementation of the supply and demand theory is more mind friendly, Just as a worker will only offer his labor time for a wage he finds beneficial, an employer will only be willing to pay workers a wage that permits him to earn a profit. The higher the wage, the fewer workers the employer will employ. This is what economists mean when they invoke the law of supply and demand. Inevitably many studies openly criticise this whole supply and demand theory. Card and Krueger (1995, cited in George Sayers Bain, 1998) were amongst the first economists to argue and diminish suggestions that the minimum wage would lead to job loss. They were in fact in complete contrast to this view as evidence collected, with regards to the fast food industry of various states in the USA, implied that in those states where minimum wages were enforced triggered employment growth whilst those states not enforced by the law to use the minimum wage didn’t indicate any growth. Whereas leadingShow MoreRelatedMinimum Wage And The Wage916 Words   |  4 PagesEliminate the Minimum Wage Darity Has described minimum wage as: â€Å"Minimum-wage legislation has been to improve the terms of employment of the least-fortunate wage earners.† (Darity) Since the beginning of minimum wage laws in 1270 France the intentions of minimum wage legislation has been good. The idea is that a worker is worth a certain amount regardless of the work they are able to do. One can see how this could create inefficiencies in an economy. The law was meant to help poor families.Read MoreMinimum Wage And The Wage Essay1208 Words   |  5 Pages Minimum wage requires paying every employee a specific wage regardless of the employee productivity. It is the responsibility of the government to set the minimum wage. To understand this, a biology analogy can be used: some animals are stronger compared to others. In economic perspective, some people are relatively unable to deliver compared to others. Among them include, disabled, unskilled, and the youth. Due to their low productivity, th ey are entitled lower wages corresponding to their effortsRead MoreMinimum Wage And The Wage Essay1728 Words   |  7 PagesRoyer Political Science 120 7 November 2016 Increase Minimum Wage Introduction The United States’ minimum wage has been a concerning issue amongst the low wage earners because of the amount they earn is not enough for them to live on their own. Therefore causing the citizens who earn minimum wage to have an impossible time finding a place to stay and expenses for daily survival. Increasing the minimum wage will solve the issues that the minimum wage earners make, thus increasing the chances of survivalRead MoreThe Wage Is The Minimum Wage1098 Words   |  5 PagesEnglish 9 6/5/16 â€Å"The minimum wage is the minimum hourly wage an employer can pay an employee for work. Currently, the federal minimum wage is $7.25 an hour (part of the Fair Labor Standards Act) and some states and cities have raised their minimum wage even higher than that.† minimum wage was first introduced during the great depression in 1930s. Before it was introduced thousands of people were forced to work in horrible conditions for pennies a week. Early attempts on minimum wage was ruled unconstitutionalRead MoreMinimum Wage And The Wage1437 Words   |  6 Pages Minimum wage was established on October 24, 1938 after President Roosevelt signed the Fair Labor Standards Act. (Grossman) Minimum wage was set to allow working class citizens an opportunity to work a reasonable amount of hours for pay that would enable individuals to maintain a minimal quality life. In today’s economics minimum wage is used as a price control or price floor that the government enforces. A price floor is a minimum price for a product or service above the market’s equilibrium priceRead MoreMinimum Wage And The Wage1269 Words   |  6 PagesMinimum Wage There are a lot of people around the world who struggle with money and a satisfactory way of life. Whether they be in the United States or across the globe, there is a standard minimum wage set for the working class of their country. In the Unites States, there is a federal minimum wage of seven dollars and twenty five cents per hour worked. Almost every state has another set minimum wage, which typically is a little higher than the federal minimum wage, but it cannot be lower thanRead MoreThe Wage Of The Minimum Wage871 Words   |  4 PagesWith the presidential elections right around the corner policy on minimum wage has come up for debate once again. William Hoar from The New American argues in his article â€Å"Misguided minimum wage mandate† that raising the minimum wage will only result in loss of jobs. According to the editorial board at USA Today, â€Å" inflation adjusted income of the top 1 percent has grown by 58 percent and the remaining 99 percent has only gr own by 6.4 percent†. They then state that a raise to 15 dollars an hour onlyRead MoreMinimum Wage863 Words   |  4 PagesMinimum wage is a controversial topic because everybody wants more. People want more money and some think that just increasing minimum wage can increase more money that they get. However, this is far from the truth as sometimes employers can’t pay their employers more than minimum wage. Not to mention that if the minimum wage goes up so does the price of everything else in order to adjust for the new price. So essentially increasing the wage majorly does nothing except maybe lower the value of yourRead MoreMinimum Wage and Its Implications763 Words   |  3 PagesMinimum wage affects everyone. The current minimum wage is at $7.25 and President Obama announced that he wished to see a change in the minimum wage, he wants to raise the hourly wage to $10.10. A rise in the income of those who are employed will also raise the cost of hiring unskilled lab or and can potentially reduce the number of people hired by businesses. Also, if minimum wage is raised then the price of the products that the companies are making might increase which will continue the cycle ofRead MoreMinimum Wage And The Wage1639 Words   |  7 PagesMinimum wage is one of the many microeconomic policies that serve to correct imbalance in the economy. It is defined as the lowest amount of remuneration required of an employer to pay his employees during a given period of work. There exist different laws in different states that can fix the minimum wage policy. A current economic issue is minimum wage, or specifically, its pertinence to social inequality. Many sectors of society would be affected by changes in this policy. Minimum wage relies on