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Raising Minimum Wage?
Transcript of Raising Minimum Wage?
The theory of demand elasticity as well as the factors that determine the elasticity of demand can help explain why employers would not have an incentive to raise the wages of their employees.
“Small businesses are already laying off low-skilled workers and investing in self-service tablets, robotics, and other labor-saving devices in anticipation of a higher minimum wage; and hours are being cut. Those trends will continue, especially if the minimum wage is indexed for inflation.” - James Dorn (Forbes Contributor)
Elasticity of Demand
The elasticity of demand measures the sensitivity (in terms of quantity) of the consumers to change in price. There are three types of elasticity in terms of demand. These types include inelastic, elastic, and unit elastic. The factors that determine elasticity are luxury versus necessity items or things.
Luxury items tend to be more elastic and have more substitutes. Necessity items tend to be more inelastic and have fewer substitutes. Minimum wage can be viewed as an example of the elasticity of demand and it proves that my friend’s job, like other minimum wage jobs, is an example of elastic factors of demand.
Saturday, December 6, 2014
Vol XCIII, No. 311
Fair Labor Standards Act (FLSA) of 1938
History of Minimum Wage
With this also came the establishment of the Department of Labor’s Wage and Hour Division. They are responsible for:
"The Business of the Minimum Wage." The New York Times. March 2, 2013. Accessed November 20, 2014. http:/www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?pagewanted=all&_r=0.
"The Minimum Wage Delusion, And The Death Of Common Sense." Forbes. Accessed November 17, 2014. http://www.forbes.com/sites/jamesdorn/2013/05/07/the-minimum-wage-delusion-and-the-death-of-common-sense/.
"U.S. Department of Labor - Wage and Hour Division (WHD) - Freedom of Information Act (FOIA)." U.S. Department of Labor - Wage and Hour Division (WHD) - Freedom of Information Act (FOIA). Accessed December 5, 2014. http://www.dol.gov/whd/foia/index.htm.
"U.S. Department of Labor - Wage and Hour Division (WHD) - Major Laws Administered/Enforced." U.S. Department of Labor - Wage and Hour Division (WHD) - Major Laws Administered/Enforced. Accessed November 14, 2014. http://www.dol.gov/whd/regs/statutes/summary.htm.
"U.S. Department of Labor — Wage and Hour Division (WHD) — Wage and Hour Division History." U.S. Department of Labor — Wage and Hour Division (WHD) — Wage and Hour Division History. Accessed December 5, 2014. http://www.dol.gov/whd/about/history/whdhist.htm.
"UNITED STATES DEPARTMENT OF LABOR." U.S. Department of Labor. Accessed November 26, 2014. http://www.dol.gov/index.htm.
"Where Were You When The Minimum Wage Was Raised?" Business Money An Animated History Of The Minimum Wage Comments. Accessed November 25, 2014. http://business.time.com/2014/02/28/an-animated-history-of-the-minimum-wage/.
Raising Minimum Wage?
family and medical leave
migrant and seasonal worker protection
lie detector tests
worker protections in certain temporary guest worker programs
the prevailing wages for government-funded service and construction contracts
Suggestions to waged employees seeking higher wages:
Further education through school
Seek training to progress higher skills in their field
Increase production to showcase added value to company
Why would Employers pay more?
Raising the minimum wage would only prompt companies to seek out higher skilled or educated employees to make up the cost of raising the wage. A negative in wage adjustment can also cause employers to lower the number of total hours worked by employees while encouraging the workers to increase the amount of work out put in job performance.