Analyzing an Economics Debate
Topic: Should the Government Raise the Minimum Wage to Reduce Poverty?
There is ongoing debate about income inequality and poverty in America and one action being proposed to address this issue is to raise the minimum wage. For this assignment, you will answer the following questions.
- Describe in general the issue that is being debated: http://money.cnn.com/infographic/pf/low-wage-worker/
Average Hourly private employee wages from the Bureau of Labor Statistics
March 2006 – October 2016
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 2006 | 10.04 | 10.04 | 10.00 | 10.02 | 10.00 | 9.97 | 10.06 | 10.12 | 10.15 | 10.13 | ||
| 2007 | 10.13 | 10.13 | 10.10 | 10.09 | 10.08 | 10.11 | 10.10 | 10.11 | 10.09 | 10.07 | 10.02 | 10.02 |
| 2008 | 9.99 | 10.00 | 10.01 | 9.99 | 9.98 | 9.90 | 9.86 | 9.92 | 9.93 | 10.03 | 10.26 | 10.38 |
| 2009 | 10.36 | 10.34 | 10.38 | 10.39 | 10.38 | 10.31 | 10.33 | 10.32 | 10.31 | 10.30 | 10.28 | 10.29 |
| 2010 | 10.31 | 10.34 | 10.33 | 10.35 | 10.37 | 10.37 | 10.38 | 10.38 | 10.39 | 10.38 | 10.36 | 10.32 |
| 2011 | 10.33 | 10.31 | 10.25 | 10.23 | 10.23 | 10.24 | 10.25 | 10.20 | 10.20 | 10.24 | 10.21 | 10.22 |
| 2012 | 10.20 | 10.19 | 10.21 | 10.20 | 10.23 | 10.27 | 10.29 | 10.22 | 10.21 | 10.17 | 10.22 | 10.26 |
| 2013 | 10.25 | 10.21 | 10.25 | 10.30 | 10.30 | 10.32 | 10.30 | 10.30 | 10.30 | 10.31 | 10.32 | 10.30 |
| 2014 | 10.29 | 10.33 | 10.31 | 10.29 | 10.30 | 10.32 | 10.32 | 10.35 | 10.34 | 10.34 | 10.40 | 10.41 |
| 2015 | 10.54 | 10.53 | 10.54 | 10.55 | 10.54 | 10.51 | 10.53 | 10.57 | 10.59 | 10.59 | 10.60 | 10.61 |
| 2016 | 10.66 | 10.68 | 10.70 | 10.69 | 10.69 | 10.68 | 10.72 | 10.71 | 10.71(P) | 10.72(P) |
P = projected
C = corrected
Consumer Price Index for Jan 2006 – October 2016 from the Bureau of Labor Statistics
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 2006 | 198.3 | 198.7 | 199.8 | 201.5 | 202.5 | 202.9 | 203.5 | 203.9 | 202.9 | 201.8 | 201.5 | 201.8 |
| 2007 | 202.416 | 203.499 | 205.352 | 206.686 | 207.949 | 208.352 | 208.299 | 207.917 | 208.490 | 208.936 | 210.177 | 210.036 |
| 2008 | 211.080 | 211.693 | 213.528 | 214.823 | 216.632 | 218.815 | 219.964 | 219.086 | 218.783 | 216.573 | 212.425 | 210.228 |
| 2009 | 211.143 | 212.193 | 212.709 | 213.240 | 213.856 | 215.693 | 215.351 | 215.834 | 215.969 | 216.177 | 216.330 | 215.949 |
| 2010 | 216.687 | 216.741 | 217.631 | 218.009 | 218.178 | 217.965 | 218.011 | 218.312 | 218.439 | 218.711 | 218.803 | 219.179 |
| 2011 | 220.223 | 221.309 | 223.467 | 224.906 | 225.964 | 225.722 | 225.922 | 226.545 | 226.889 | 226.421 | 226.230 | 225.672 |
| 2012 | 226.665 | 227.663 | 229.392 | 230.085 | 229.815 | 229.478 | 229.104 | 230.379 | 231.407 | 231.317 | 230.221 | 229.601 |
| 2013 | 230.280 | 232.166 | 232.773 | 232.531 | 232.945 | 233.504 | 233.596 | 233.877 | 234.149 | 233.546 | 233.069 | 233.049 |
| 2014 | 233.916 | 234.781 | 236.293 | 237.072 | 237.900 | 238.343 | 238.250 | 237.852 | 238.031 | 237.433 | 236.151 | 234.812 |
| 2015 | 233.707 | 234.722 | 236.119 | 236.599 | 237.805 | 238.638 | 238.654 | 238.316 | 237.945 | 237.838 | 237.336 | 236.525 |
| 2016 | 236.916 | 237.111 | 238.132 | 239.261 | 240.229 | 241.018 | 240.628 | 240.849 | 241.428 | 241.729 |
- Has the average wage kept up with inflation? How do we calculate this?
Increase in average wages = ((average wage October 2016 – average wage Jan. 2006)/average wage Jan. 2006) x100
Increase in inflation = ((cpi October 2016 – cpi Jan. 2006)/ cpi Jan. 2006) x 100
- What is the increase in average wages over this time period?
- What is the increase in inflation over this time period?
- Who wins if the inflation increase is larger than the average wage increase? Employers or employees?
- Who wins if the average wage increase is larger than the inflation rate? Employers or employees?
- Read two or more perspectives on this argument from both sides (support minimum wage increase, oppose minimum wage increase), and describe the authors perspectives on this topic. Links to articles are included below. At least 4 sentences here.
- Analyze the evidence that each author uses to support his/her thesis: What types of evidence does he or she uses? Does the evidence support his or her thesis? At least four sentences here.
- Evaluate the qualifications of the authors: What bias might the authors have? Four sentences.
- Discuss your opinion on this topic: Do you agree or disagree with the authors?
- Why? 6 sentences.
REFERENCE ARTICLES
What’s best at Reducing Poverty? An Examination of the Effectiveness of the 2007 Minimum Wage Increase. http://www.epionline.org/study/r124/
Can Raising the Minimum Wage Reduce Poverty and Hardship?
https://www.epionline.org/studies/can-raising-the-minimum-wage-reduce-poverty-and-hardship/
Won’t increasing minimum wage hurt the poor? http://www.usnews.com/opinion/blogs/economic-intelligence/2013/03/11/raising-the-minimum-wage-wont-help-the-poor
The Impact of a $10.10 Federal Minimum Wage.
http://www.epi.org/publication/raising-federal-minimum-wage-to-1010/
Is There Consensus in Favor of Wage Mandates?
http://www.epionline.org/study/r142/
2 Parties Place Political Focus on Inequality, by Jeremy W. Peters, The New York Times. http://www.nytimes.com/2014/01/09/us/politics/republicans-move-to-reclaim-poverty-fighting-mantle.html?hpw&rref=politics&_r=0
http://www.pewresearch.org/fact-tank/2013/07/19/who-makes-minimum-wage/
From the Center for American Progress:
http://www.americanprogress.org/issues/religion/report/2013/12/10/80780/real-family-values-raising-the-federal-minimum-wage/
https://www.americanprogressaction.org/issues/economy/news/2013/12/03/80222/raising-the-minimum-wage-would-help-not-hurt-our-economy/