Minimum Wage Essay

In this years State of the Union Address to Congress, President Obama recommended training the tokenish lucre to clear workers who cannot support themselves and their families with their current salaries. The articles, Why We submit to conjure the minimal Wage and Why We Shouldnt Raise the Minimum Wage tell us that thither were some(a) controversies in rhytidectomy the tokenish rent. As an economics major, I believe it is a unskilled judgment to raise the minimum wage because it creates more unemployment, and it will bowdlerise entry-level jobs. Since increasing minimum wage is not the solution to the poor pack, the political sympathies should rather increase the earned income tax extension than minimum wage.In the article Why We Need to Raise the Minimum Wage by Andy Stern and Carl Camden, the authors support raising of minimum wage. They argue that raising the minimum wage could reward hardworking Americans by providing prefatorial needs such(prenominal) as basic medical insurance and living in bulletproof housing. Since the low wages are not enough to get those basic needs, workers are getting paid in cash because they can invalidate tax responsibilities. The authors allege that raising the minimum wage will rectify dignity and value to low-wage work.Conversely, in the article Why We Shouldnt Raise the Minimum Wage, author Kevin A. Hassett and Michael R. Strain argue that raising the minimum wage does not recover from distress, and it is a dishonest approach to hide the reliable cost of the government policy. According to the authors only 11.3 percent of workers from the poor would benefit from raising the minimum wage. Many people who live in poverty do not work, and workers who earn the minimum wage are ordinarily not the primary breadwinners in their households. Hasset and Strain assert that increasing the minimum wage is an insincere approach of the politicians because minimum wage law could supply an opportunity to score politic al points easily. Even though, expanding the earned income tax credit is much more efficient, the government do not want it because they do not want to use money directly out from treasury.In the economical perspective, raising the minimum wage is a bad idea because it creates more unemployment and reduces entry-level jobs. From the point of view of basic supply and demand, employers and workers adjust the amount of supplied tire out according to wages until the quantity of labor demanded equals to the quantity of labor supplied, reaching an remainder wage. However, the minimum wage policy ignores the market monetary value by setting a price floor higher than the equilibrium wage. According to the law of demand, few employers will be willing to take away workers if the minimum wage is increased, and it will create unemployment.Moreover, if minimum wage increases there will be fewer entry-level jobs than before because firms will no nightlong hire unskilled workers at higher cost . Entry-level jobs are good for jr. and unskilled workers. Eliminating these jobs makes it difficult for the low skilled and younger workers to find satisfactory employment. As mentioned in Hasset and Strains article raising the minimum wage is not the solution to poverty because workers who earn the minimum wage are generally secondary earners like an elderly parent earning some retirement income, a spouse with a part time job, or they are young people living with their parents. According to the Center on Budget and Policy Priorities, in 2009, expansion of EITC lifted 3.1 million people out of poverty. In conclusion, earned income tax credit will be a more efficient tool than minimum wage policy.