Increasing Minimum Wage Research Paper
The benefits of increasing minimum wage Minimum wage is the lowest wage payable to workers as designated by law. Whether to increase minimum wage or not has come up to the crucial issue regarding economy. Although some people mention that minimum wage force employers to reduce jobs and raise prices on goods and services, minimum wage should be increased because of economic growth, labor efficiency, and a high standard of living. First of all, increasing minimum wage could lead to economic growth by increases in total household income and spending. In a recent study of Current Population Survey (Aaronson and French, 2013), raising hourly minimum wage from $7.25 to $9 increases the average real income of household by $250 per quarter. Also, an increase in household income stimulates workers to consume more goods and services. As the hourly minimum wage rises as much as $1, the average real spending of households rises $700 per quarter. Therefore, additional spending is generated which is mostly on durable goods. In addition, a $1.75 rise in the hourly minimum wage
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Increased minimum wage improves workers’ morale, and it connects to labor productivity. According to a study of the effect of increasing minimum wage at the San Francisco Airport (Reich and Hall, 2003), 35 percent of employers answered that work performance had improved, 47 percent reported employee morale had been stimulated, and 45 percent reported improvement in customer service. Furthermore, workers stay on the job longer and employee turnover rate decreases. The annual turnover rate of security screeners at the airport decreased from 95 percent to 19 percent when their hourly minimum wage increased from $6.45 to $10. As a result, as turnover rate decreases, firms can save the cost of recruitment and retraining. In summary, when the minimum wage rises, employers get benefits from labor
Increased minimum wage improves workers’ morale, and it connects to labor productivity. According to a study of the effect of increasing minimum wage at the San Francisco Airport (Reich and Hall, 2003), 35 percent of employers answered that work performance had improved, 47 percent reported employee morale had been stimulated, and 45 percent reported improvement in customer service. Furthermore, workers stay on the job longer and employee turnover rate decreases. The annual turnover rate of security screeners at the airport decreased from 95 percent to 19 percent when their hourly minimum wage increased from $6.45 to $10. As a result, as turnover rate decreases, firms can save the cost of recruitment and retraining. In summary, when the minimum wage rises, employers get benefits from labor