Hot topic paper rough draft- Minimum wage increase

Brittany Habli

Eng 289 Hot Topics Paper

October 25, 2011

Currently the U.S. minimum wage is around $7.25/hr, roughly $15,000/yr for full-time hourly workers.  It is estimated that 6% of the hourly work force (4.4 million people) live off of minimum wage. With inflation and unemployment on the rise, it is a topic of debate whether or not the minimum wage should be increased.

In the business world, minimum wage increase is a very hot-button issue. The public mostly supports the increase in minimum wage and has voted for the increase consistently. Many economists and professionals argue that minimum wage increase is counter-productive, while some say it can circulate more money into a struggling economy.

Minimum wage increases, like many other government attempts at correcting a negative externality, have their pros and cons. On one hand, people are spending more to obtain less goods and services, so a pay increase would help correct that gap. On the other hand, increasing wage may actually put those people out of jobs, making them worse-off than they were before. The question remains: Who is benefitting from the increase in minimum wage? And of those benefitting, is it the intended demographic?

The Public

The general public opinion of minimum wage is positive. Voters time and again support increase in the minimum wage. Many newspaper and internet opinion polls reveal that the general population feels that workers earning the lowest wages are in need of a pay raise to off-set the rise in the cost of living. Inflation is also a factor that shapes the opinion of the working class. With a general rise in prices, consumers are struggling to make “ends meet” and many believe that an increase in minimum wage could help adjust for the difference. With more money going into the paychecks of low-wage employees, it is possible that the extra money would be recycled into the economy as consumer spending, especially since employees making minimum wage rarely are able to save and are forced to spend money on their needs.  Public opinion also advocates that higher wages would boost job growth and more workers would actively seek out employment. Many believe that pay raises would encourage employee retention.

The minority of public opinion that does not support the increase is that of the workers making slightly higher than the current minimum wage. To this group, it would mean a new group of people would be on the same income level as them, creating more competition for their jobs. Since the increased minimum wage does not apply to them, it only means more rivalry for their current positions.

Professional Views

Businesspersons typically disagree with the public opinion on minimum wage increase. From a more informed point of view, research suggests that a higher minimum wage will not help families living below the poverty level. According to a 2009 article by the Wall Street Journal, an estimated 34% of the minimum wage earners are from high-income families. An increase in the wages of these workers would not improve the standard of living for the poorest people for whom the increase was intended. The poorest of families are typically unemployed or low-skill adults earning slightly above the minimum wage and would be competing with new workers making the same pay as them after the increase.

An increase in the minimum wage can have a negative effect on the ability of workers to keep or obtain new jobs. Many companies respond to rising wage costs with lay-offs. When reviewing finances, the cost of labor is typically very high, so naturally it is the first target for “cutting corners”. Then, once a person is let go due to budget cuts one can imagine how difficult it may be to find a new job in a market where companies are cutting any relatively unnecessary jobs. Employers also have the propensity to retain younger workers that are perceived to have more potential and fire low-skill adult workers.

In terms of minimum wage rates and small businesses, many states have made a distinction between big businesses and lower earning businesses. Some states, like Ohio, will allow businesses earning under $283,000 to pay employees $7.25/hr whereas the new (2012) minimum wage will be $7.70/hr. This is a very important condition in the law for the small business owners who are currently struggling to pay their labor costs.

Not all in the business field disagree with the increase in minimum wage. Some argue that an increase in pay could generate up to $9 billion back into the economy in terms of consumer spending, which would in turn be like a stimulus. Also, a minority of economists suggest that such an increase in wages would reallocate money from corporations to households. Corporations have a tendency to retain much of their profits for future growth, whereas low-wage earners are forced to spend most of their earnings on necessities plus a small discretionary income to be spent and therefore pumped back into the economy.

The U.S. Chamber of Commerce is known for their stand against minimum wage increases largely because it can encourage inflation. If wages increase in response to inflation, there is no incentive for prices to come back down. Wage increases are deemed to be a long-term solution to short-term market fluctuations and adding to the fact that no conclusive evidence suggests that an increase in minimum wage improves unemployment.

For nearly ten years, up until 2006, the minimum wage barely moved, but recently with a lethargic economy, adjustments are being made in some cases on a yearly basis. The economic crisis of 2008 officially knocked the U.S. and other countries into official recession and minimum wage increases, unemployment and inflation are the hot topics at many “water coolers”.

Works Cited

Sheketoff, Chuck. “2012 Minimum Wage Hike Good for Oregonians and Good for Economy.”  Blue Oregon.org Mandate Media September 15, 2011. Accessed October 19, 2011. http://blueoregon.org/2011/09/2012-minimum-wage-hike-good-oregonians-and-good-economy/

“A Minimum Wage Increase.” The New York Times. March 26, 2011. Accessed October 19, 2011. http://www.nytimes.com/2011/03/27/opinion/27sun2.html?_r=1

Johnson, Alan. “Ohio to Increase Minimum Wage in January.” The Columbus Dispatch. September 30, 2011. Accessed October 19, 2011. http://www.dispatch.com/content/stories/local/2011/09/30/ohio-to-increase-minimum-wage-in-january.html

Neumark, David. "Delay the Minimum Wage Hike." The Wall Street Journal. June 12, 2009. Proquest. Web. Accessed October 21, 2011. http://search.proquest.com.proxy.libraries.uc.edu/business/docview/399057514/1328F1A7F3833B618A/4?accountid=2909

Sullivan, Laura; Robertson, Tommy J; Brown, Diana B. "FLSA And the Minimum Wage: Employee Friend or Foe." Journal of Legal, Ethical and Regulatory Issues. 14.1 (2011): 131-146. Proquest. Web. Accessed October 21, 2011. http://search.proquest.com.proxy.libraries.uc.edu/business/docview/886547575/1328F291F4156C373E7/5?accountid=2909

                                                      

Article 1) It is estimated that about 34% of the minimum wage earners are from higher-income families and the increase in minimum wage will not help families living below the poverty level. Also, the increase in minimum wage give employers incentive to fire low-skilled adult workers.
Article 2) The increase in minimum wage is making it harder for workers to keep current and obtain new jobs. Also, there are a lot of people that fall into the category of "underemployed" meaning they are over-education/qualified or have too much experience for the job in which they are employed.

Works Cited

Neumark, David. "Delay the Minimum Wage Hike." The Wall Street Journal. June 12, 2009. Proquest. Web. Accessed October 21, 2011. http://search.proquest.com.proxy.libraries.uc.edu/business/docview/399057514/1328F1A7F3833B618A/4?accountid=2909

Sullivan, Laura; Robertson, Tommy J; Brown, Diana B. "FLSA And the Minimum Wage: Employee Friend or Foe." Journal of Legal, Ethical and Regulatory Issues. 14.1 (2011): 131-146. Proquest. Web. Accessed October 21, 2011. http://search.proquest.com.proxy.libraries.uc.edu/business/docview/886547575/1328F291F4156C373E7/5?accountid=2909

Hot topic research-minimum wage increase 2012

According to the article I found in the Columbus Dispatcher, businesses earning less than $283,000 (gross) are subject to lower minimum wage rates for employees. These companies are obligated to pay employees, including 14 and 15 year olds $7.25/hr, whereas companies grossing more than that amount by the new law (effective the first of 2012 in the state of Ohio) would be obligated to pay workers $7.70/hr. It is very interesting that the government made the distinction between small business and larger businesses. It seems that the general public is in favor of the increase in minimum wage. The New York Times states in the article "A Minimum Wage Increase" that the 4.4 million people (6% of the hourly workforce) live off of miniumum wage and they need a pay raise to off-set the cost of living and the rate of inflation. Most people are clamoring for higher pay and are struggling with the current minimum wage.

Sheketoff, Chuck. “2012 Minimum Wage Hike Good for Oregonians and Goo for Economy.”  Blue Oregon.org Mandate Media September 15, 2011. Accessed October 19, 2011. http://blueoregon.org/2011/09/2012-minimum-wage-hike-good-oregonians-and-good-economy/

“A Minimum Wage Increase.” The New York Times. March 26, 2011. Accessed October 19, 2011. http://www.nytimes.com/2011/03/27/opinion/27sun2.html?_r=1

Johnson, Alan. “Ohio to Increase Minimum Wage in January.” The Columbus Dispatch. September 30, 2011. Accessed October 19, 2011. http://www.dispatch.com/content/stories/local/2011/09/30/ohio-to-increase-minimum-wage-in-january.html

Hot Topic Choice- Minimum Wage

According to the feedback from my classmates' comments, I'd like to choose minimum wage.
There are pros and cons to this issue. From the points of view of an economist and a small business owner, the increase in minimum wage is negative. An economist would say that minimum wage in general is bad and the market supply and demand should determine how much a worker earns to reach the optimal market equilibrum. Also, in economical terms, an increased minimum wage gives an incentive to teenagers to go to work and take potential jobs away from struggling adults that need the work more than a teen that just wants some extra pocket money. From the perspective of a small business owner, they are already struggling to make a profit and pay their expenses, including employees, which now they need to pay more. This is the proverbial "nail in the coffin" for a lot of businesses that were already nearing the edge of shutting down. An increase in minimum wage to the average employee may sound like a great advancement, but it also is an indication of inflation, which as we all know comes with an increase in the price of goods, gasoline, etc. and the extra income is ultimately not helpful. So, increased minimum wage, all things considered is very deceptive.

Hot Topics in Business

1) Increase in minimum wage. Small businesses are finding it even harder to pay their employees due to the rise in minimum wage. It is a very controversial issue because most people would say that the rise in minimum wage is a good thing, but for some it can break the bank literally.
2) Outsourcing jobs. Many telemarketers and customer support representatives are not working from the U.S. Places like India are benefitting from Western jobs and higher salaries, while companies are paying much less for employees' wages. Many people find this to be a bad thing because they believe it is taking away U.S. jobs and some people are just bothered by the communication barrier.

Business-CMS format

The business field uses the Chicago Manual of Style (CMS) format for writing.

My Business Manifesto

Brittany Habli

English 289

Business Manifesto

October 6th, 2011

“Ethical Business Practices for the Modern Society: A Business Manifesto”

The practice of business should be such that it moves interested parties and society to a mutually beneficial and desirable outcome. An ethical model or code for business should involve an oath of responsibility, honesty, accountability, integrity and disclosure of intentions.  Businesspersons of today and tomorrow must vow to be prosperous in the field in a responsible, ethical manner.

Business is not a new profession or industry. Business transactions have taken place since early man began to trade or barter for a desired good or service. Phoenician merchants are a good example of early businessmen that traveled the globe making business transactions along the way, spreading language, knowledge and culture. The Phoenician alphabet and the discovery of the Pole Star used for navigation shows the contribution left behind by these early businessmen. In the modern age man has big shoes to fill and cannot forget the ideals and accomplishments of the ones that came before.

Individuals matter to society and to the business industry. In today’s world it could be easy for one to cheat and lie in order to succeed in his/her profession and say “that’s how you survive” or “everyone does it this way”. That is why individuals are important, because one voice can echo in the ears of the many and bring about a change in the world. The internet allows knowledge to spread quickly and websites like www.change.org can help grassroots causes get awareness. People such as: Gandhi, Nelson Mandela and Mother Teresa are examples of people that made a difference in society and although their triumphs are well-known, everyday people should consider how their own actions could have effects on others for the good or the bad.

Good business practices should make society flourish under the protection of a government that executes its laws fairly. Governments need to protect commerce. Corrupt businesses exploit the “underdogs” of society while law enforcement is looking the other way. An epidemic of human trafficking has developed under the watch of many governments that either neglect or aide in the black market sale of human beings. This is what happens in a society that lacks accountability and responsibility.

Business practices should be conscientious with others in mind. Actions have consequences. These potential outcomes should be considered when making a sound business decision. To be a conscientious businessperson means benefitting from the trade/sale of a good or service for a desirable result for all involved. This practice does not allow one to take advantage of another’s ignorance or inexperience in business transactions. Intentions should be fully disclosed (made known) and understood by both parties. “Swindling” or any manner of deceit has no place in the ideal business world.

Highly profitable businesses have a duty to those less fortunate. Many successful businesses have adopted the practice of giving to charity. In a world where there are many “have-nots”, the ones that “have” need to realize their responsibility to needy people and/or causes in the world. Many companies choose to donate money to organizations that fund scientific research, help poor families receive medical care and even provide educational scholarship programs. Without these donations, science would not have the funding needed to discover new cures and treatments for illness. That is why charity stimulates society and business has helped fund lots of modern discoveries.

When ethical business is commonly practiced, society benefits greatly. The habits of a country’s commerce can determine not only its economical future but its collective future. The prosperity of one should not mean harm to another. Practices are contagious, that is why we must all strive for moral conviction in business. Technology and scientific study cannot progress without the help of business. There is a mutually beneficial relationship between society and business, good business, better society. Responsibilty, accountability, integrity, honesty, fair treatment: these are all the attributes that ethical business in the modern age should have.