microeconomics

Please give your opinion response separately for the next 2 statements.



1.) Raising the price floor, thus, raising minimum wage is two fold. On one end of the spectrum, it increases the quality of living for those who receive the raise as the price floor too is raised. On the other end of the spectrum, when the price floor is raised it decreases the amount of employees at times because employers try to stay close to their bottom line. At times, this causes workers to be laid off and the ones that are left see an increase in their workload. Other companies compensate by raising the price of the goods. The point is the money is usually recouped, the question is which route will it take. On the flip side consumers put more money back into the economy as they have more money to spend. The worse thing that can happen when a price floor is set for goods above the equilibrium is that a surplus of the good is produced. It was neat to learn that price floors are often created to protect our farmers. Another bad thing that results from raising minimum wage is structural unemployment. The government often gets involved in buying surplus and or controlling production.



2.) To start this week’s discussion question, I am going to give my opinion on a few things that came to mind when I watched the videos on minimum wage. I have worked in a number of different fields since I started working. I have done such jobs as; cleaning horse stalls, working in the livestock market, flipped burgers at a fast food chain, picked fruit and cotton during the summertime, and as a pizza maker. All of the jobs I just listed were jobs I worked before getting out of high school. After high school, I decided to get into the trades, such as; plumbing and roofing, which I thought would be an excellent career choice. During the beginning, I worked my way up the ranks, from laborer, to apprentice, and started to make good money. Before too long, I was run out of a career, not because of a minimum wage increase, but because of an influx of illegal immigration. Companies started to hire illegal workers because these illegals would work for even under minimum wage, putting more money into the employer’s pocket. I have experienced this first hand and have heard this same exact story from others who have found themselves in the same situation I am in.

This purposed increase in minimum wage of course will help workers financially, but in the same sense it will also hurt workers financially. The way things are now in my area, it is extremely difficult to find work, even for skilled workers. Personally, I have had to take two jobs just to make ends meat. I work at a local radio station as a promotions technician part-time, making twenty cents over the present minimum wage, and I also work at Dairy Queen, making minimum wage. These are the only jobs I can find at the present time, because of the competition in the employment market. It is like a lottery just to try and find job. Yes workers will make more money if minimum wage is increased, but fewer workers will be hired in the process. The bigger corporations will cut back on the jobs to lower their cost of employment so I does not hurt their profits, and smaller businesses will cut back on their employees because they cannot afford it. Employees who have started working at minimum wage, and have worked their way up through the company to get to $10 dollars and hour will be hurt also, because their wages will most likely not be increased, which will be a major hit to morale.

If the national minimum wage is increased, so will the price of goods. Companies will have to raise their prices to cover their cost of labor. Business owners are not going to let a wage increase affect their bottom line. Companies still need to make their money, if they can’t what would be the point of being in business. Since I started working, minimum wage was $4.25 an hour in 1994, just over twenty years later minimum wage has gone up almost four dollars. If the federal minimum wage goes up to $10 an hour goods are going to go through the roof, just to cover the cost of labor, which is not going to help anyone, especially the working class who struggle just to survive now.