If the employer cannot absorb the costs of the rising wage, they must make some tough choices about their business. Some of these choices maybe to lay off, reduce hiring, reduce hours, stricter hiring guidelines or simply raise product prices. It has been seen in the past that by raising minimum wage causes unemployment to increase. This is because if employers have to pay more for low skill level employees they are going to look for more skilled workers. This causes low skilled workers to become
Obama urged Congress to raise the minimum wage from the current $ 7.25 per hour to $ 9 per hour. The advantages of this point are to reduce poverty and improve the phenomenon of low wages. However, the minimum wages increased by 24% will lead to the increase in labor supply, reduced demand and cause large unemployment. Thus, it might occur that a phenomenon of low-wage improvement, but the unemployment rate is correspondingly increased. What make matters worse is that unemployment is the most vulnerable to afford unemployment hit.
Government spending allows the UK to have certain facilities that we already demand high of, including the NHS, which is one of the biggest and most demanded service by the UK economy. If the government was to make cuts then services as such would also be forced to make cuts in terms of free service and its availability. This would cause demand within the economy to fall dramatically. However on the other hand if the government was to stop spending as much then this could lead to incentive for others to start up private and profitable businesses which would increase the welfare of the UK economy. For example the NHS, there would be more private firms ready to invest.
I. Unionization a. Unionization in its simplest form is the collaboration of a group of workers in a certain industry. b. Motivations for unionization — Personal job dissatisfaction usually leads to the need for Collective Bargaining  Collective bargaining includes: o Salary improvement o Retirement requirement and benefits o Better working conditions o Management misbehavior against employees o Effective conflict resolution — Belief that unionization will lead to concrete improvements as a result of Collective Bargaining II. Economists have two different views of the effect of unionization in the economy: First view is that unionization is good for the economy and the other view states the contrary. A According to the organizers of the American Worker Project, David Madland and Karla Walter, whose goal is to conduct research on the increase of wages, benefits, and security of American workers – “the essence of labor unions is to allow workers to reap the benefits of the economic growth they help create.” i.
However, one idea has come up repeatedly in order to spark the economy once more. The idea is to increase the minimum wage, in order to give the poor and low-wage workers more spending power in the market, thus boosting the economy. This might sound like a good idea on the surface, but I’m here to tell you that it is not. While it is a counterintuitive idea; raising the minimum wage would simply be a counterproductive answer for the struggling American economy. An increase in the minimum wage would result in a loss of many low-wage jobs.
With higher GDP the govt will collect more taxes; this is because people will pay more income tax and VAT. This is beneficial because the govt can use this increased revenues to reduce the level of government borrowing and/or spend more on public services and investment in the country infrastructure. Higher economic growth will lead to an increase in demand for labour as firms will be producing more. Therefore unemployment will fall, this has various advantages such as lower govt spending on benefits and less social problems. However economic growth has various costs.
In the case of college tuition, demand is driving up the cost. The two main factors inflating the demand for a college degree are perceived value and financial aid. Supply is defined as the amount of goods a market can produce. As the price of a good or service increases the quantity offered will increase because producers are willing to offer more products on the market at higher prices as a way of increasing profits. Because there are a finite number of colleges in the U.S., the market for colleges and universities is saturated.
If such conflict arises, the higher minimum wage—state or federal—is the minimum wage for workers in that state. Proponents of raising the wage argue that workers should have more spending power than they currently do. This can then help to stimulate the economy by increasing consumption among those minimum wage workers. The idea, however, that a raise in the minimum wage helps the poor is actually a misconception. Raising the minimum wage is a very ineffective and indirect aid to the poor that often does more harm than good.
I chose this topic because it is a major issue in today’s economy. Many people are for raising the minimum wage. On the other hand, there are those who reject the idea of raising minimum wage. The suggested price to raise the minimum wage is ten dollars, but would that be enough to satisfy today’s economic living standards?
Increasing Minimum Wage The debate of whether or not to increase the minimum wage has much controversy surrounding it, but the facts support an increase. The facts show that the cost of living and inflation quickly erode the value of minimum wage without regular increases in the minimum wage. The people that would be slightly hurt by an increase when compared to the massive amount of people that an increase in the minimum wage would help is minute. Poverty in the United States is a problem that people constantly face, but with a higher minimum wage, poverty would be lessened. The many arguments for an increase in minimum wage clearly show that an increase is desperately needed in the near future.