1. The graphic includes a map of the minimum wage laws in the United States. Before then, minimum wage was set to correspond with productivity, as in how much income the average worker produces. If the federal minimum had kept that pace, it would have been nearly under $19. However, in 2009, a federal minimum wage was set at $7.25 nationwide. Some states and cities have raised their minimum wages to $11.50 per hour. When the minimum wage goes up, the employers increase their costs on to the consumers in the form of higher prices, or cut costs elsewhere – leading to less full service and be more customer self-service. As a result, fewer hours and jobs are available for less- skilled and less experienced employees.

The reason why I chose this article is because I am an advocate for higher minimum wage in California. Raising the minimum wage is one of the best tools we have to lift incomes and grow our consumer – driven economy. Two years ago in 2016, Governor Brown sign SB 3, a bill that increases the minimum wage in California to $15 per hour by 2022. The governor’s action makes California, the first state in the nation to commit to raising the minimum wage to $15 per hour statewide. However, from doing my research, a new study from economists at the University of California, Irvine and the National Bureau of Economic research find that over the past 30 years, increases in the minimum wage have not reduced poverty rates in disadvantaged neighborhoods. While a few employees who earn a salary increase might benefit from a wage increase, those that lose their job are noticeably worse off

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These two articles relate to Chapter 5 Price Controls (“What Effects Do Price Floors Have On Economic Activity” pg .160). Most people believe that raising the minimum wage is a simple step that the government can take to improve the standard of living of the low income people. However, what they don’t realize is that business generally wants to keep costs down, so in the long run, they will try to reduce the amount they spend on labor. They might replace workers with machinery, shorten work hours, or even relocate to states that don’t have minimum wage laws.


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