The trend over the past decade or two has been to create laws and implement programs
The trend over the past decade or two has been to create laws and implement programs that have more of a socialist bent than the capitalism the USA consists of. Government becoming more involved with commerce is one example of that. One of the most common economic errors is the failure to consider secondary effects (Gwartney et al., 2018). Not doing so leads to fallacious conclusions (Gwartney et al., 2018). Implementing a higher minimum wage for workers does not take into account the secondary effects of that action. The argument for an increased minimum wage cites poverty and what it will do for the worker employed in minimum wage jobs. In fact, it has been proven that raising the minimum wage does not combat poverty (Manning, 2018). The argument for increasing the minimum wage also cites increased spending power of the people employed in minimum wage jobs and the economic benefits that will result from it. The reality is unemployment increases when minimum wage is increased (Gwartney et al., 2018). This fact is used by many different sources for any research regarding increasing the minimum wage.
The increase of the minimum wage will force some employers to use less employees. It also creates a situation in which employers use alternatives to the minimum wage employee. In England where there is a national living wage, the alternative is to hire younger workers who do not have to meet minimum wage requirements (The Economist, 2016). This work around clearly shows that having a required minimum wage does not do what proponents of having a mandated minimum wage is supposed to do.
References
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public choice (16th ed.). Retrieved from https://www.cengage.com (Links to an external site.)Manning, A. (2018, January/February). The truth about the minimum wage: Neither job killer nor cure-all. Foreign Affairs, 97, 126–134. Retrieved from https://www.foreignaffairs.com/The Economist. (2016, April 2). Wages and jobs; Poor economics. The Economist, 27. Retrieved from https://www.economist.com/
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