Minimum Wages Winnie Tam

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Minimum WagesWinnie Tam

• Even if a job can be found, employment is no
  sure escape from poverty.
• It constitutes a step in the direction of
  communism, bolshevism, fascism, and Nazism.
  National Assn. of Manufacturers, 1937
• Except perhaps for the Social Security Act, it
  is the most far-reaching, far-sighted program for
  the benefit of workers ever adopted here or in
  any other country. Franklin D. Roosevelt, 1938

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Historical Background

• Worlds first min. wage was adopted by the
  Australian state of Victoria in 1896.
• Min. wages used to cover only women.
• Americas national min. wage was created under
  the 1938 Fair Labors Standard Act.
• Increases in the min. wage have always found a
  lot of opposition.

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Minimum Wages Across the Nation
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A Look at Minimum Wage Rates

• CAs min. wage is 6.75 per hour.
• Last increased in 2002.
• San Francisco 8.50 per hour.
• Federal min. wage is 5.15 per hour.
• Last increase was in 1997!
• Six states have no minimum wage laws.
• Real purchasing power has decreased because min.
  wage not tied to inflation.

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Criticisms of the Minimum Wage

• Increased unemployment
• Only helps middle class teenagers
• Increased prices for consumers
• Effect on competitiveness
• Effects on small businesses
• Min. wage becomes the max. wage?

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Support for a Minimum Wage

• Min. wage increases purchasing power macro
  effects benefit everyone.
• Closing the gender wage gap and the growing wage
  inequalities
• Increased productivity
• Not a question of work ethic
• Right thing to do

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Social Responsibility?

• Workers should earn enough for basic subsistence
  live above the poverty line.
• Distributive justice
• Groups most affected by min. wage have no
  political power.
• Paradox of poverty in an affluent society

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No Conclusions

• Min. wage policy has been studied by more
  economists than any other policy, but there are
  still no definitive conclusions on the effects of
  having a min. wage or raising it.
• Depending on how you look at the numbers, you can
  come to two very different conclusions.