Hiking minimum wage a net benefit
August 14, 2014
Several weeks ago, a bill to increase the federal minimum wage to $10.10 per hour died in congress. It’sunlikely that the current General Assembly will support an increase in North Carolina, contrary to the public’s support for the increase.
In America, the federal minimum wage is $7.25 per hour. The U.S. government dictate a national minimum wage, from which the states may vary upwards. In North Carolina, the legal minimum wage is $7.25 hourly, exactly the prescribed minimum wage.
There are a lot arguments around the media against an increase, but are any of them persuasive?
Based on a report by the Congressional Budget Office that summarized economic research on the minimum wage, a raise to $10.10 would be a job killer.
One argument is that an increase would lead to higher unemployment in some industries, as employers struggle to cover the higher cost of minimum wage workers. Others argued, that an increase won’t make a big difference in the poverty problem. 45 million Americans live in poverty, and the Congressional Budget Office report projects that raising the minimum wage to $10.10 would reduce that by fewer than 1 million. But the correct criterion isn’t whether a policy solves the entire problem, but whether the benefits exceed the cost. The Congressional Budget Office report implies that a raise to $10.10 meets that test. Another pro-increase argument is that an increased minimum wage would prevent growing poverty and create fair competition. Wage dumping companies gain an unfair competitive advantage, at the expense of their own employees.
Even though many arguments against an increase continue to float around, it seems premature to declare the issue dead because of the continued public support.
Best regards
und viele Grüße aus Charlotte
Reinhard von Hennigs
www.bridgehouse.law
und viele Grüße aus Charlotte
Reinhard von Hennigs
www.bridgehouse.law
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