Raising the Minimum Wage, Research Proposal Example

Introduction

David Shipler inductively broaches public policy pertaining to poverty in an inductive manner, inquiring what the working poor in America need rather than what the private sector or government can do to solve this problem at the macro level. Shipler’s sociological approach to abating poverty in the United States ignores the economic realities of complying with a federally mandated raise in the minimum wage, The negative ramifications  of raising the minimum wage include higher unemployment rates because hiking the wages paid to workers would result in the discharge of several productive, good employers (Cahn and Cahn). As a result, there would be less economic incentive to hire new workers so that organizations can still yield profits. In addition, there would be an increase in high school dropouts and/or less individuals, especially from socioeconomically disadvantaged communities, who attend college because mandated higher wages that will enable them to subsist would entice them to choose work over school. Ironically, poverty would increase because there will be less jobs, and employee benefits would be slashed, thereby resulting in virtually no competition within the marketplace. Nonetheless, Shipler, like other experts seeking to reduce poverty rates, believes that anti-poverty policies must cover all bases to be effective. Because living wage jobs currently do no enable the impoverished to subsist, he calls for a federal-mandated boost of minimum wages that would vary on an idiosyncratic basis according to locale. Shipler broaches the topic of poverty within the United States with a very limited vision, as he ignores the role of race in the perpetuation of poverty and how racial disparities would be exacerbated rather than eradicated by hiking up the minimum wage.

Proposal

This research paper takes into consideration the arguments for and against raising the minimum wage at the federal level as a mechanism to curtail escalating poverty rates. Shipler argues that to solve the problem of living-wage jobs in the United States, the government should increase the minimum wage, expand living wage laws at the macro level, and hike up credit for earned income tax. However, his arguments are fickle here as he admits that increasing the minimum wage will not get rid of low-wage jobs because they are crucial for the overall success of the economy in the United States. Thus, the thrust of this paper will be assessing Shipler’s arguments and revealing how they are not constructed on sound empirical evidence by looking at various economic models and blueprints related to minimum wage laws. This paper will further show how the vast majority of the academic evidence supports the adverse ramifications of raising the minimum wages. In order to provide nuance to the study, I will also consider various studies that yield positive results for those in support of a higher minimum wage. While various states and lawmakers continue to debate raising the minimum wage, it is evident that policy changes would damage an American economy that continues to be stagnant and sluggish. Rather than argue over the merits and disadvantages of a higher minimum wage at the federal level, I ultimately argue for both state and federal governments to consider passing economic policies that will generate greater economic growth, thereby increasing overall wages and providing all workers more job opportunities to climb out of poverty.

Procedure

I intend to broach this topic from an economic perspective in order to fully evaluate and assess the merits of an increase in minimum wage. First I will introduce the antithesis of my argument, meaning a section on the economic arguments for raising the minimum wage, which aligns with Shipler’s arguments. The primary argument left-leaning economists use is that increasing the minimum wage will also boost pay and employment. As such, the wages of the lesser-skilled workers would increase and thus reduce poverty levels. One study conducted by David Card and Alan Krueger during the 1990s concluded that when employees working for fast-food restaurants in New Jersey had their minimum wage increased, the levels of employment did as well (Hall and Krueger). Minimum wage laws thus got rid of workforce segregation in which unskilled and skilled workers were segmented (and thus the unemployed and the employed and the haves and have-nots).  In addition, some economists opine that firms may react positively towards an mandated minimum wage increase.

After considering the arguments used in the antithesis, I would then begin the defense of my contention against raising the minimum wage from an economic perspective. More specifically, analyzing the issue from a macroeconomic perspective will demonstrate that a mandated minimum wage increase would result in job loss, high unemployment rates, and thus higher levels of poverty. Rather than helping the poor, this policy would hurt them and immensely hurt the job sector (Currie 3). Various economic models support such macroeconomic analysis, which will be teased out in order to refute the claims made by proponents of a wage increase. Because Shipley largely eschews the role that race plays in the perpetuation of poverty in America, one section will be dedicated to how a raise in the minimum raise will exacerbate rather than mitigate racial disparities within socioeconomically disadvantaged communities.

Works Cited

Abelda, R., R. Drago, and S. Shulman. Unlevel Playing Fields: Understanding Wage Inequality and Discrimination, 3rd ed. Boston: Economic Affairs Bureau, 2010. Print.

Blank, Rebecca M., Danziger, Sheldon H., and Robert F. Schoeni, eds. Working and Poor: How Economic and Policy Changes Are Affecting Low-Wage Workers. New York: Russell Sage Foundation, 2006. Print.

Cahn, David and Jack Cahn. “Popular Does not Mean Practical: The Case Against the Federal Minimum Wage.” Huffington Post. 10 Jun. 2014. Web. 27 Oct. 2015. www.huffingtonpost.com/david-cahn/popular-does-not-mean-pra_b_5128311.html

Currie, Janet M. The Invisible Safety Net: Protecting the Nation’s Poor Children and Families. Princeton, NJ: Princeton University Press, 2006. Print.

Easterly, William. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. New York: Penguin, 2006. Print.

Even, W. E., and D.A. Macpherson. “Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases.” Employment Policies Institute. 2011. Web. 27 Oct. 2015. www.Epionline.org/studies/even_5-2011.pdf

Hall, D. and D. Cooper. “How Raising the Federal Minimum Wage Would Help Working Families and Give the Economy a Boost.” Economic Policy Institute. 2012. Web, 27 Oct. 2015. www.epi.org/publication/ib341-raising-federal-minimum-wage

McConnell, C. R., Brue, S. L., and D.A. Macpherson. Contemporary Labor Economics, 10th ed. New York: McGraw-Hill Irwin, 2013. Print.

Shipler, David. The Working Poor: Invisible in America. New York: Alfred A, Knopf, 2004. Print.