Increase in Minimum Wage…

Bid on Minimum Wage Revives Issue That Has Divided Economists- By D. Paletta and J. Hilsenrath, Wall Street Journal

President Barack Obama pushed to raise the Federal minimum wage to $9 an hour. Photo: WSJ


In the first State of the Union of his second term, President Barack Obama pushed to raise the Federal minimum wage to $9 an hour, reviving a dormant debate. Photo- Getty Images.


“WASHINGTON—President Barack Obama’s proposal Tuesday to raise the federal minimum wage is likely to rekindle debates over whether the measure helps or hurts low-income workers.

White House officials say the move to boost the wage to $9 an hour, from $7.25, is aimed at addressing poverty and helping low-income Americans.

But the proposal likely will be opposed by Republicans and business groups, which have traditionally said raising the minimum wage discourages companies from hiring low-skilled workers…In 2008, while first running for the White House, Mr. Obama proposed raising the minimum wage to $9.50 an hour by 2011. But the White House never followed through with a push for changes in this area, and he hadn’t brought the issue up again as president until Tuesday night… But economists and politicians are divided over the issue.

“The effects of the minimum wage are declines in employment for the very least skilled workers,” said David Neumark, a University of California, Irvine, professor who has studied the issue with Federal Reserve researcher William Wascher. Mr. Neumark argues the benefits of higher minimum wages sometimes accrue to teens in higher-income families taking part-time jobs. “A lot of the benefits of minimum wages leak out to families way above the poverty line,” he said… White House officials believe raising the minimum wage to $9 an hour would enable more families to earn more than the federal poverty level. The federal minimum wage was last increased in 2009 as part of a three-step phase-in that became law in 2007″

Discussion Questions

1. What is the current minimum wage?

2. President Barack Obama’s proposal is to raise the federal minimum wage to what amount?

3. According to White House officials, which group would most likely benefit from this raise?

4. Who opposes the the federal minimum wage  increase? Why?

5. When was the last time the minimum wage increased?

6. In your opinion, is this a good move for the American people or not? Provide reasons for your answers.


Forbes Thought Of The Day

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