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Price Controls

Price Controls

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Published by: rblackcat13 on Jan 19, 2012
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Assignment 1 ECO 4051Price Controls - The Minimum WageArlene Miller Dr. George A. Uhimchuk ECO 405 Economic Problems and IssuesOctober 20, 2011
 
Assignment 1 ECO 4052The Minimum Wage Law protects employees by making sure they are guaranteed a setwage per hour where the money paid per hour cannot go below a certain amount. If this law wasnot in effect employers and business owners might decide to pay them little to nothing for their work. According to the Minimum Wage Law and Legal Definition the minimum wage lawcalled “The Fair Labor Standards Act of 1938, FLSA, is in a sense the basic law controllingemployment and compensation issues in the United States. The FLSA mandates that a minimumwage be paid, but the act classifies employees into two broad classes: those who are covered bythe law because they are paid by the hour and those who are exempted because they are paid asalary” (
Minimum Wage Law and Legal Definition
)
.
The definitions of cost are “the price paid to acquire, produce, accomplish, or maintainanything. Cost also means “a sacrifice, loss or penalty” and “an outlay or expenditure of money,time, labor, trouble, etc” (
Cost 
). The definitions of benefit are “something that is advantageous or good, an advantage.” Benefit also means “a payment or gift” (
).In analyzing costs to an economy of a minimum wage law we find the cost of living, or living wage, is housing, food, health care, child care, and all other basic needs and necessities for an individual or family to make a living without ending up on welfare. These are main factorswhen considering what the actual cost is to an economy of minimum wage earnings. Theminimum wage law for an average worker is $7.25
 
and with the living wage taken intoconsideration the cost to an economy is that an individual or families will most likely needassistance whether it is government or local community help. The minimum wage for low-income workers cost could mean housing assistance, government assistance, and medicalassistance due to not making enough income to provide for family needs or individual needs.Minimum wage cost could mean unemployment, jobs outsourcing for a lower wage and high
 
Assignment 1 ECO 4053turnover due to lower cost of minimum wage
(
 About Living Wage
).
These are some of the factorsand issues to consider when taking cost into consideration.In analyzing benefits to an economy of a minimum wage law we find that some benefitsto an economy of a minimum wage law are wage increases which mean less dependence ongovernment assistance, lower turnover rates for companies, less people on unemployment benefits, plus a wage increase brings more job and business into the community
(
The
 
 Benefits of  Raising the Minimum Wage
).
 I am in support of keeping minimum wage laws as these laws mandate a base pay thatcompanies must give their employees. Without the minimum wage law a company could paysomeone next to nothing for their work, which would result in even more people on welfare andgovernment assistance since their wages would not be enough to pay bills or provide necessitiesfor themselves, let alone a family. However, as it stands, the current minimum wage at $7.25 anhour puts a person at poverty level status because the cost of living is much higher than theminimum wage pays.In order for people to meet the cost of living and provide for themselves and their family,minimum wage needs to increase by $5.00 an hour and increase yearly as the cost of living rises.This increase would allow people to earn enough wages to be able to support themselves andtheir families with little or no governmental assistance. This would result in a significantreduction in the number of people on welfare and other government assistance programs, andtherefore reduce the amount that the government must pay out for these programs. Businesseswould benefit from this increase since people would have more money left over after paying bills, they will be able to purchase the items they wish to purchase. The benefits of a minimum

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