Institutionalist Tradition in Labor Economics
Workers whose wages are initially close to the minimum wage are the ones who are most likely to be affected by changes in the wage floor. Those who are slightly above it, in case of increases in price wages, their wages will be similar to those who were working below them therefore they will not do their jobs with the same zeal as before and will want to do similar jobs as those who were below them. The employees are supposed to be protected by the rise in wages and not made worse off.
Raising the federal minimum wage significantly increases the amount of money a working individual has to spend at that moment in time (Nuemark & Wascher, 2008). They will be comfortable for the time being but they know that when the government spends a lot, a time comes for making cuts, and then their job security will be in the hand of the state. o Future of employment wages will be determined by how leaders handle the present economic situation.
As for now, everyone want more to be able to cope with the crisis at hand. When the state increases this peoples’ wages in order to stop the nagging, it means that should the situation get out of hand, they will have to correct it and in so doing will cut off some people from their work and this will not be good for the economy. Moreover, the teenagers will not have jobs to go to as they finish school.
If the wages are to remain the way they are, they will be unattractive to the teenagers who will not make an effort to look for work and so they will lack job experiences and trainings as a result, the future work places will have to hire incompetent people which will not be good for business or just lack people to carry on the work and companies that have been started. On a positive note, an increase in wages will enabled more people to be skilled in their specialized areas and this will be good for themselves and the country.
Wage increases can also make permanently employed people to be replaced by part-time people to enable companies to work as per their budgets. Also, if the wage is kept constant, the government will be able to run its’ activities without any interference by workers who constantly demand for raises. The impact of the changes in Federal minimum wages has thus been seen to cut across all sectors of the economy and affecting employers and the employees as well.
When the employers are affected, they pass on the effect to their employees and the effect is felt at the household level and this in turn affects the future of everyone and every business associated with the wage increases. Conclusion The federal government is committed to providing the money needed to pay the legislated minimum wage, plus health care and child care benefits to anyone who is ready, willing and able to work.
As much as it is responsible for making sure that everyone in the country has a better pay salaries, it has to closely look on the effects of the changes in the minimum wage and how it will impact the economy and the citizens not only now but also the future. The minimum wage is not the complete solution to poverty and low wages; policies are also needed to augment the skills of the low-paid (Champlin& Knoedler, 2004).
“They can also consider linking the minimum wage and the EITC(Earned Income Tax Credit) to create an effective antipoverty measures but it’s not clear if the two will be involved; either as compliments or substitutes in an effort to help working families (Mink & O’Connor, 2004). ” The government should also involve business men economics experts and the individuals who receive the wages so that they can listen to many ideas and opinions so that when decisions are made, everyone will know the reasons as to why they were formulated.
References: Dell P. Champlin, P. D. ; Knoedler, T. J. (2004) The Institutionalist Tradition in Labor Economics. Published by M. E. Sharpe Mastrianna, F. V. (2007). Basic Economics. 14th Ed. Mason, OH: Thomson South- Western. Mink, G. ; O’Connor, A. (2004). Poverty in the United States: An Encyclopedia of History, Politics, and Policy. Published by ABC-CLIO Neumark, D. & Wascher, W. L. (2008). Minimum Wages. Published by MIT Press
