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| − | == Minimum Wage and Dropping Out of School == | + | == Minimum Wage == |
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| − | Researchers have found that one effect of raising the minimum wage is that more students drop out of school, or do not go on to college, because they can make more money working at jobs than they could before. This can be understood as follows: | + | Today, the government prohibits employers from paying wages below a certain amount per hour, called the “minimum wage.” As of July 24, 2009, the minimum wage rate in New Jersey and nationwide is $7.25 per hour (in some states it is higher).<ref>For a history of the national minimum wage, see http://www.dol.gov/esa/minwage/coverage.htm</ref> If you work 40 hours a week for 50 weeks, or a total of 2000 hours, then that translates to a yearly salary of $14,500. It is difficult to support a family that amount in some areas of the country, and many politicians are constantly demanding an increase in the minimum wage. |
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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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| | + | There is another effect to raising the minimum wage that is also hurtful. Researchers have found that one effect of raising the minimum wage is that more students drop out of school, or do not go on to college, because they can make more money working at jobs than they could before. This can be understood as follows: |
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| | :Suppose that "x" number of students quit school to work at jobs when the minimum wage is $6 per hour. | | :Suppose that "x" number of students quit school to work at jobs when the minimum wage is $6 per hour. |
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| | :Therefore raising the minimum wage causes more students to leave school in order to work at jobs. | | :Therefore raising the minimum wage causes more students to leave school in order to work at jobs. |
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| − | Other studies show, however, that the more education that someone has, the higher their average income is. Students who complete four-year colleges make more money on average than students who completely only two-year colleges, for example. Students who complete two-year colleges likewise have higher average incomes than students who end their education after high school. | + | Other studies show that the more education that someone has, the higher their average income is. Students who complete four-year colleges make more money on average than students who completely only two-year colleges, for example. Students who complete two-year colleges likewise have higher average incomes than students who end their education after high school. |
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| | Raising the minimum wage thus entices students to take advantage of a "short-term" benefit of the higher wage, but they are worse off in the "long-run". They would make more money by staying in school and not being enticed by the increase in the minimum wage. | | Raising the minimum wage thus entices students to take advantage of a "short-term" benefit of the higher wage, but they are worse off in the "long-run". They would make more money by staying in school and not being enticed by the increase in the minimum wage. |