Minimum Wage Debate

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The debate over minimum wages in the United States, and when to raise those wages, has been in existence for decades. While business owners opt for no wage increases, workers scramble to make ends meet. Minimum wage has been an issue in the United States since as early as 1786, when a group of printers in Philadelphia walked out of their office to protest a reduction in their wages. They succeeded in securing a $6.00 a week minimum wage (Illinois Labor History Society, 4). The result of that protest can be considered the first minimum wage victory in the United States. In 1912, Massachusetts passed the first minimum wage income law for women and minors, and began to push for a federal minimum wage, beginning the revolution…show more content…
Johnson states, “Common sense suggest that raising the incomes of the poor is more complex than passing a law requiring that wages be increased because then it would be a simply matter to make everyone extremely wealthy by requiring that everyone be paid, say $100 per hour. According to Johnson, the economic analysis of the minimum wage question has not changed much throughout the last fifty years (Johnson). Economists rarely debate the issue among themselves, and “to them the continuing debate by others reflects not the limitation of economic science…but rather indicates that what is known is comprehended by so few, and is so poorly used” (Johnson). Economic analysis suggests that wage rates are like other prices, and are therefore determined by the interaction of buyers and sellers (Johnson). For example, if buyers want to purchase more than sellers want to sell, then buyers will offer a higher price, and price increases will stop only when the price is high enough so that buyers want to purchase only that amount that is available (Johnson). In the same manner, if there is an excess of labor, the wage rate will fall until the amount that companies want to buy is equal to…show more content…
Second, a high-wage economy can induce a regime of rapid technical change, and firms faced with high wages are forced to employ more advanced equipment and eliminate inefficiency or leave the industry, which results in a more productive society because companies are forced to embrace new technologies and processes. In the end, these new processes are disseminated throughout the economy. Third, the minimum wage is one among a number of factors that has the capacity to equalize bargaining power in labor markets, and enables people to 'earn a living,' which is an elementary component of human dignity and social justice.” Since the initial passage of the Fair Labor Standards Act of 1938, economists have generally been opposed to the minimum wage, and today, this consensus is the same as most introductory textbooks will indicate (Prasch). Prasch notes that over the last half century, “it has become an article of faith that any floor or ceiling placed upon a supposedly autonomous and self-ordering 'free market' will lead to a substantial misallocation of resources' (Prasch). Regarding the minimum wage, market intervention is thought to
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