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| | Today tariffs are rarely used and the government relies almost entirely on the income tax for funding. | | Today tariffs are rarely used and the government relies almost entirely on the income tax for funding. |
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| − | ==Minimum Wage and Price Controls== | + | ==Price Controls== |
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| | So far we have been talking about economic exchanges in the absence of government controls. But the government does interfere in many ways in our economy. America enjoys more free enterprise than any other large country, but we are still heavily regulated. | | So far we have been talking about economic exchanges in the absence of government controls. But the government does interfere in many ways in our economy. America enjoys more free enterprise than any other large country, but we are still heavily regulated. |
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| | Controls on prices (and also wages) were also imposed to control inflation in the early 1970s. A war in the Middle East, and assistance in that war by the United States of Israel, caused the Arab nations to reduce their supply of oil to us. That created gasoline shortages and increased energy costs, which then drove up inflation. Price controls were designed to limit the increases. | | Controls on prices (and also wages) were also imposed to control inflation in the early 1970s. A war in the Middle East, and assistance in that war by the United States of Israel, caused the Arab nations to reduce their supply of oil to us. That created gasoline shortages and increased energy costs, which then drove up inflation. Price controls were designed to limit the increases. |
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| − | Today, the government prohibits employers from paying wages below a certain amount per hour, called the “minimum wage.” It is now $7.15 per hour in New Jersey, but only $5.15 per hour nationwide. If you work 40 hours a week for 50 weeks, or a total of 2000 hours, then that translates to a yearly salary of $10,300. It is nearly impossible to support a family that amount in most areas of the country, and many politicians are constantly demanding an increase in the minimum wage.
| + | <insert graph of price controls> |
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| − | Unfortunately, it is even more difficult to survive without a job at all, which is what happens to many people (particularly teenagers) when the minimum wage is increased. Employers who would hire someone to work at $4 per hour might not be able to hire them at $5.15 per hour. Isn’t a job at $4 an hour better than none at all?
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| − | Moreover, illegal aliens find a wage of even $2 an hour better than what they could make in their homeland. Companies move operations offshore to take advantage of places that do not have minimum wages as high as ours. Alternatively, workers enter this country illegally to work at low wages and displace American workers, according to several lawsuits.
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| | == Minimum Wage and Dropping Out of School == | | == Minimum Wage and Dropping Out of School == |