American labor history Essays

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Jaisinghani, Raunaq, LER 100, Extra Credit Paper, 12/09/2013.
Firstly, I would like to start by stating a couple of facts stated on the website for the United States department of labor. “The federal minimum wage is $7.25 effective July 24, 2009.” Also, as stated in the lecture segment, “Since 1979 average hourly earnings for 80 percent of the country rose by 1 percent after inflation; while productivity rose by 60 percent. These figures have become a major cause for concern in the United States as statistics have shown that even today millions of people live under the poverty line are barely being able to survive.
I was browsing the web for information about the topic when I came across an article on the New York Times website. “Raising Income Gap would Ease Income Gap but Carries Political Risks”, published on the February 13th this year it talks about how President Obama believes that raising the minimum wage for workers across the United States could greatly benefit the country in a number of ways. Christine Owens the national executive of the National Employment Law Project, states in the article, “A higher minimum wage is key to getting the economy back on track for working people and the middle class.” The articles gives the example of companies such as Costco and Stride Rite, a childrens shoe seller that have in the past supported the cause to increase the workers minimum wage in order to reduce the employers turnover and increase the workers productivity. Also, reducing the employers turnover could help decrease the nation’s income inequality. Although political instability and the increasing pressure from small as well as big businesses have created barriers to such progress. They believe that it will add to their operation costs and might even increase the unemployment rate as the simple Law of demand states that when the price of a certain commodity X is high then the quantity demanded for the particular commodity will decrease and vice-versa. Similarly, if the cost to hire a worker for an hour increases by a certain amount the willingness to hire more workers from the employers side would decrease.
In his speech about Economic mobility on the 4th December, 2013 President Obama raised concern about the growing issue of minimum wage. He believes that in todays date and time an American may not get the chance to get ahead in life or even a shot at a real opportunity if he/she was not fortunate enough to be born into money which is the case for a high majority of the country’s population. He does a great job in explaining the situation by giving facts and figures, and to be honest I was shocked to hear that numbers show that if a child is born in a top 20 percent household in terms of income he has a 2 out 3 chance to stay there, whereas on the contrary if the child is born in the bottom 20 percent household, he/she will end up having a 1 out of 20 chance to make it to the top 20 percent. Also, he stated that 10 percent of the American population that used to take away one-third of the nations wealth, that same 10 percent takes away about half of the nations wealth. Which is one of the biggest causes for income inequality. Also, starting sometime around 1980 technology played a major role in eliminating a lot of the labor force, companies, through the mode of technology found a way to get more work done with less manpower. This meant that for the same amount of work less workers were needed. Job outsourcing could be taken as the perfect factor that terminated the chance for an increase in the minimum wage. Big companies and businesses set up their workplaces and factories in countries such as India and China where the minimum wage for workers was much lower though productivity was more or less the same. This lead to lower paying jobs, workers losing leverage and having fewer benefits. He stated that strong business firms even lobbied the government in D.C and to stop the minimum wage from increasing. Also, taxes
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