I need support with this Economics question so I can learn better.
1. Please take your position (For or Against) and EXPLAIN your position by listing potential microeconomics impacts (pros if you are for it or cons if you are against it) (10 points)
2. Please post your comments to your classmates’ postings. (5 points each x 2 = 10 points)
Note: In order to get the full credits, you MUST discuss any or combinations of the considerations listed below using the economic concepts we studied. Simply saying “I am against the raise because it will cause inflation” is not good enough. You must further elaborate.
1. When you post your pros and cons, you can look at a view from an employer or an employee.
2. Please consider the populations who are directly affected by the minimum wage and also the population who are indirectly affected. In other words, let’s say you have been working for a company for a while and your wage is $17 per an hour. You have a new hire coming in at higher minimum wage, what would be your reaction?
3. When the minimum wage goes up, that means companies will have to pay more matching social security (6.2%) and medicare (1.45%) taxes also. Please consider these additional cost to employers and how they will react initially in terms of pricing, sales, cost, and etc. If the prices of goods and services go up, will you be happy as consumers?
4. Consider if the current minimum wage is below the market equilibrium wage (which it is). That would create shortage or surplus of labor? If you are trying to set a new minimum wage level, are you going to set it at the market equilibrium or try to set it higher than the equilibrium? Why or why not?
5. If the new minimum wage is set above the market equilibrium wage, will that create shortage or surplus of labor? What is that mean to your jobs? In other words, what would employers do if the wage goes up and there are more labor supply than labor demand?
6. Lastly, if you are against raising it, consider if the current minimum is enough for a person to make a living, especially in bigger cities. In fact, many states/localities have higher minimum wages than the federal mandated minimum wages already for that reason.