videos above:
week 2 videos: 1 and 2
This week we are going to examine what happens in a market when the government intervenes in the market and introduces price controls. In particular we are going to examine what happens when the minimum wage is increased.
A minimum wage is a Price Floor. When a price floor is imposed on a market the price can be higher than the price floor, but not lower than the price floor.
In the labor market, the price is the wage rate. Thus, a minimum wage above the equilibrium wage increases workers wages, but it also decreases the quantity demanded of labor. In particular, it reduces the quantity demanded of unskilled and low skilled labor, especially youth labor.
Assignment Summary:
- View the two videos above and videos 1 and 2 under the Week Two Videos. You may also wish to view the other videos for a deeper understanding of price controls.
- Visit The Faces of <5 for more perspectives on a $15 minimum wage.
- Read Chapter 6 in your textbook in careful detail. Pay close attention to the graphs in Figures 1 – 5. Focus on Figure 5 in particular. You may also wish to review the CBO Report CBO Report – Alternative Formats on employment and income impacts of an increased minimum wage.
- Read Should the Minimum Wage Be $15 an Hour? on pages 120 – 121 in the text.
- Based on the videos, the readings and any additional research you decide to do (remember to cite and reference all your sources) what you do think will be the market impact(s) of the proposed increase in the federal minimum wage to $15 per hour?
- Will the proposed increase help workers? And if so which part(s) of the labor market will be helped?
- Which part(s) of the labor market will hurt by the proposed increase? How will they be hurt?
- What will happen to the prices of goods and services produced with minimum wage labor?
- What is your conclusion? Is this proposal a good idea or not? Explain why.
- Post your views to the discussion board and refer to at least two different concepts from this week’s Chapters. Your illustration of concepts MUST include an explanation why you think they are are relevant to the week’s topic using specific information from the articles, videos and other research that you have done.
Textbook included
part 2: reply to classmates with 150 words each
liliana: Having a minimum wage of 15 dollars sounds excellent and looks terrific in our checks, especially having a little extra money to save and spend. But even though it might feel suitable for one person, it can affect everyone and everything around us. One thing it can affect is the unemployment rate. With the business having to pay more an hour for one employee, they can’t afford to pay all the employees because they need to have that money to be able to afford people. Then comes debating on hiring skilled workers instead of unskilled workers due to having to pay unskilled workers to be trained compared to experienced workers that know and don’t need that extra time to be prepared. Businesses would be better off hiring a qualified person but finding it hard to find those people. Because there are teens and first-time job seekers who want to look for their first job to learn and grow, causing it to be like discrimination. The increase of the minimum wage price will decrease the demand for labor, pushing the unemployment rate to be high and businesses shutting down because of no help hurting the labor market. Another thing that it can affect is the federal budget because by increasing the wages that the federal government paid to a small number of hourly employees and indirectly by boosting the prices of some goods and services purchased by the government (CBO, 2014). Federal spending and taxes would also be affecting because since families are making more income, the more they pay in taxes and receive less in federal benefits (CBO, 2014). In my opinion, raising the minimum wage has its good and bad, but we must be fair for everyone that wants an opportunity to have the chance to grow and learn. It would be nice to get paid more, but if I didn’t get the chance to get my first job as a young teen. I wouldn’t have gotten the experience I needed.
Erika: The proposal to increase the national minimum pay to fifteen dollars every hour will significantly impact the market. The proposal of the increase will increase the earnings and income of the families of the low-wage employees. The increase of the worker’s income will help eradicate poverty since the low-wage workers will earn more money, enabling them to afford the basic needs of life comfortably. The parts of the labor market that will be helped include the low-waged workers who will secure a job under the increased federal minimum wages (Faces of $15, 2021). There will be increased incomes among the households, thus eliminating poverty in families of low-wage workers. There will also be an increased labor supply since more people will be willing to work under the proposed increased minimum wages. There will be low workplace turnover since the workers will be motivated to work more and have low chances of quitting their jobs (Khan Academy, 2012). Also, there will be low absenteeism of the employees in the workplace since the workers will be excited to work at increased pay. The parts of the employment market that the suggested payment increase will have negative effects include: There will be increased unemployment of the low waged workers caused by the decrease in demand for labor. Employers will hire fewer workers due to the increased wages paid to the workers. The employers will reduce the number of workers to minimize the added costs of paying the workers more money (Congressional Budget Office, 2014). The charges of the goods and services manufactured within the increased wages will be higher. The producers will hike the prices of the goods and services to compensate the costs incurred in paying the workers more wages (Liberty Pen, 2012). Hiking the prices of goods and services will enable employers to gain profits after incurring higher wages. In conclusion, the proposal of increasing the minimum wage is not a good idea. The increasing of the minimum wages will increase the rate of unemployment due to a decrease in demand for labor. The proposal will also lead to higher prices of goods and services in the market, making it difficult for most people to afford the goods and services.
0 comments