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Transcript of Minimum Wage
Effects on Small Businesses
A large amount of earnings go directly to pay for opening expenses, such as equipment, supplies, lease, or mortgage, credit lines, inventory, and employee wages and benefits.
Minimum Wage can be a good thing but it can also be a bad thing.
Facts About Minimum Wage
For every 10 percent increase in the minimum wage, teen employment at small business is estimated to decrease by 4.6 to 9.0 percent.
Every 10 percent increase in the minimum wage, estimates show employment may fall as much as 606 percent for young African Americans and Hispanic teens ages 16 to 19.
The average annual family income of those earning the minimum wage in 2009 is over $48,000.
Workers employes in minimum wage jobs are often lacking higher education or breaking into the work force. Raising the minimum wage could potentially eliminate a number of these entry-level jobs, making it difficult for workers to gain the work experience necessary to break into higher-paying careers.
Many believe that the minimum wage is hurtful to families at or below the poverty line. In order to benefit from higher minimum wage, a worker needs to have a job to begin with. When the minimum wage increases, many businesses let positions go in order to afford the rate. Workers that are laid off tend to be those without high school education, making it harder for them to find a new job.
Its good for families because raising the minimum wage would raise the income of 28 million Americans. Women would particularly benefit because they tend to work for lower wages than men.
To get the economy back on track, spending power has to be in the hands of those who actually spend in the real economy. That means regular people, not the super-wealthy who tend to hoard wealth or invest in financial products. The minimum wage story is not just a story about income inequality, but rather it's about an elite that has hijacked the economic system and made it work less productively than before while redistributing more of what is working to themselves.
It helps people get out of debt. During the early part of the post-war period, entrepreneurship was more concerned with building productive capacity and putting workers to work actually making useful things.
A higher minimum wage would also help to lower the abusive, exploitative working practices of a number of employers, who take advantage of the currently low minimum wage o seek cut-rate help. Such employers often use undocumented labor.
A minimum wage mandate can also reduce benefits employees receive from their jobs. Businesses seeking to cut costs because of minimum wage requirements could cut out employee benefits such as health care.
The lowest wage permitted by law or by a special agreement (such as one with a labor union).
Effects on Unemployment
Raising minimum wage will increase unemployment. Will also raise inflation.
But it also good for our economy because a higher minimum wage not only boosts workers' income-something that is sorely needed to boost demand and get the economy going-but it also reduces turnover and shifts businesses toward a high-road, high-human- capital model.
Effect on the Price Level of Consumer Goods
Raising the minimum wage would raise food prices pennies.
By: Halle & Alyssa