[In Progress] Minimum Wage - Debate over consequences

Minimum wage laws affect workers in most low-paid fields of employment and have usually been judged against the criterion of^[각주:1] reducing poverty. Minimum wage laws receive less support from economists than from the general public. Despite decades of experience and economic research, debates about the costs and benefits of minimum wages continue today.

Various groups have great ideological, political, financial, and emotional investments in issues surrounding minimum wage laws. For example, agencies^[각주:2] that administer^[각주:3] the laws have a vested interest in^[각주:4] showing that "their" laws do not create unemployment^[각주:5], as do labor unions whose members' finances^[각주:6] are protected by minimum wage laws. On the other side of the issue, low-wage employers such as restaurants finance^[각주:7] the Employment Policies Institute, which has released numerous studies opposing the minimum wage. The presence of these powerful groups and factors means that the debate on the issue is not always based on dispassionate^[각주:8] analysis. Additionally, it is extraordinarily difficult to separate the effects of minimum wage from all the other variables^[각주:9] that affect employment.

The following table summarizes the arguments made by those for and against minimum wage laws:

Arguments in favor of minimum wage laws

Supporters of the minimum wage claim it has these effects:

• Positive impact on small business owners and industry
• Removes financial stress and encourages education, resulting in better paying jobs
• Increased job growth and creation
• Increases the standard of living for the poorest and most vulnerable class in society and raises average
• Increases incentives to^[각주:10] take jobs, as opposed to^[각주:11] other methods of transferring income to the poor that are not tied to employment (such as food subsidies^[각주:12] for the poor or welfare payments for the unemployed)
• Stimulates^[각주:13] consumption^[각주:14], by putting more money in the hands of low-income people who spend their entire paychecks^[각주:15]. Hence^[각주:16] increases circulation of^[각주:17] money through the economy
• Encourages efficiency^[각주:18] and automation of industry
• Removes low paying jobs, forcing workers to train for^[각주:19], and move to, higher paying jobs
• Increases technological development^[각주:20]. Costly technology that increases business efficiency^[각주:21] is more appealing^[각주:22] as the price of labor increases
• Increases the work ethic of^[각주:23] those who earn very little, as employers demand more return^[각주:24] from the higher cost of hiring these employees.
• Decreases the cost of government social welfare programs by increasing incomes for the lowest-paid.
• Encourages people to join the workforce rather than pursuing money through illegal means^[각주:25], e.g.^[각주:26], selling illegal drugs

Arguments against minimum wage laws

Opponents of the minimum wage claim it has these effects:

• Minimum wage alone is not effective at alleviating^[각주:27] poverty, and in fact produces a net increase in^[각주:28] poverty due to disemployment^[각주:29] effects
• As a labor market analogue of^[각주:30] political-economic protectionism, it excludes low cost competitors from labor markets and hampers^[각주:31] firms in reducing wage costs during trade downturns^[각주:32]. This generates various industrial-economic inefficiencies^[각주:33]. 
• Hurts small business more than large business.
• Reduces quantity demanded of^[각주:34] workers, either through a reduction in the number of hours worked by individuals, or through a reduction in the number of jobs.
• May cause price inflation as businesses try to compensate^[각주:35] by raising the prices of the goods being sold.
• Benefits some workers at the expense of the poorest and least productive^[각주:36].
• Encourages employers to replace low-skilled workers with computers, such as self-checkout^[각주:37] machines. 
• Increases property crime^[각주:38] and misery in^[각주:39] poor communities by decreasing legal markets of production and consumption in those communities
• Can result in the exclusion of^[각주:40] certain groups (ethnic^[각주:41], gender etc.) from the labor force^[각주:42].
• Small firms with limited payroll^[각주:43] budgets cannot offer their most valuable employees fair and attractive wages above unskilled^[각주:44] workers paid the artificially^[각주:45] high minimum, and see a rising hurdle-cost of adding workers. 
• Is less effective than other methods (e.g. the Earned Income Tax Credit) at reducing poverty, and is more damaging to^[각주:46] businesses than those other methods.
• Discourages further education among the poor by enticing^[각주:47] people to enter the job market.
• Discriminates against, through pricing out^[각주:48], less qualified workers (including newcomers to the labor market, e.g. young workers) by keeping them from accumulating^[각주:49] work experience^[각주:50] and qualifications, hence^[각주:51] potentially graduating to^[각주:52] higher wages later.
• Slows growth in the creation of low-skilled jobs.
• Results in jobs moving to other areas or countries which allow lower-cost labor
• Results in higher long-term unemployment 
• Results in higher prices for consumers, where products and services are produced by minimum-wage workers (though non-labor^[각주:53] costs represent^[각주:54] a greater proportion of costs to consumers in industries like fast food and discount retail)

A widely circulated^[각주:55] argument that the minimum wage was ineffective at reducing poverty was provided by George Stigler in 1949:

• Employment may fall more than in proportion to^[각주:56] the wage increase, thereby^[각주:57] reducing overall^[각주:58] earnings^[각주:59];
• As uncovered sectors of the economy absorb workers released from the covered sectors^[각주:60], the decrease in wages in the uncovered sectors may exceed the increase in^[각주:61] wages in the covered ones; 
• The impact of the minimum wage on family income distribution^[각주:62] may be negative unless the fewer but better jobs are allocated to^[각주:63] members of needy families^[각주:64] rather than to, for example, teenagers from families not in poverty;
• Forbidding employers to pay less than a legal minimum^[각주:65] is equivalent to forbidding workers to sell their labor for less than the minimum wage. The legal restriction that^[각주:66] employers cannot pay less than a legislated wage^[각주:67] is equivalent to^[각주:68] the legal restriction that workers cannot work at all in the protected sector unless they can find employers willing to hire them at that wage.

In 2006, the International Labor Organization (ILO) argued that the minimum wage could not be directly linked to unemployment in countries that have suffered job losses. In April 2010, the Organization for Economic Co-operation and Development (OECD)^[각주:69] released a report arguing that countries could alleviate^[각주:70] teen unemployment by "lowering the cost of employing low-skilled youth" through a sub-minimum^[각주:71] training wage. A study of U.S. states showed that businesses' annual and average payrolls grow faster and employment grew at a faster rate in states with a minimum wage. The study showed a correlation^[각주:72], but did not claim to prove causation^[각주:73]. 

Although strongly opposed by both the business community and the Conservative Party when introduced in 1999, the Conservatives reversed^[각주:74] their opposition in^[각주:75] 2000. Accounts differ as to^[각주:76] the effects of the minimum wage. The Centre for Economic Performance^[각주:77] found no discernible impact on^[각주:78] employment levels from the wage increases, while the Low Pay Commission found that employers had reduced their rate of hiring and employee hours employed, and found ways to cause current workers to be more productive (especially service companies). The Institute for the Study of Labor found prices in the minimum wage sector rose significantly faster than prices in non-minimum wage sectors, in the four years following the implementation of the minimum wage. Neither trade unions nor employer organizations contest the minimum wage, although the latter had especially done so heavily until 1999.

In 2014, supporters of minimum wage cited a study that found that job creation within the United States is faster in states that raised their minimum wages. In 2014, supporters of minimum wage cited news organizations who reported the state with the highest minimum-wage garnered more job creation than the rest of the United States.

In 2014, in Seattle, Washington, liberal and progressive business owners who had supported the city's new $15 minimum wage said they might hold off on expanding their businesses and thus creating new jobs, due to the uncertain timescale of the wage increase implementation. However, subsequently at least two of the business owners quoted did expand.

The dollar value of the minimum wage loses purchasing power over time due to inflation. Minimum wage laws, for instance proposals to index the minimum wage to average wages, have the potential to keep the dollar value of the minimum wage relevant and predictable. 

With regard to the economic effects of introducing minimum wage legislation in Germany in January 2015, recent developments have shown that the feared increase in unemployment has not materialized, however, in some economic sectors and regions of the country, it came to a decline in job opportunities particularly for temporary and part-time workers, and some low-wage jobs have disappeared entirely. Because of this overall positive development, the Deutsche Bundesbank revised its opinion, and ascertained that "the impact of the introduction of the minimum wage on the total volume of work appears to be very limited in the present business cycle".

1. criterion ; [명사] pl. cri・teria / -riə / (판단이나 결정을 위한) 기준 ;; US [kraɪ|tɪriən] UK [kraɪ|tɪəriən] [본문으로]
2. agency ; 2. (특히 美) <특정 서비스를 제공하는 정부 기관> [본문으로]
3. administer ; [vn] 1. [흔히 수동태로] (회사・조직・국가 등을) 관리하다[운영하다] [본문으로]
4. vested interest ; [명사] ~ (in sth) 기득권, 확정적 권리 [본문으로]
5. create unemployment ; 실업자를 내다. [본문으로]
6. finances ; [명사] 돈, 금전 [본문으로]
7. finance ; [타동사][VN] 자금[재원]을 대다 [본문으로]
8. dispassionate ; [형용사] (호감) 감정에 좌우되지 않는 [본문으로]
9. variable ; [명사] 변수 [본문으로]
10. incentive ; [C , U] ~ (for/to sb/sth) (to do sth) (어떤 행동을 장려하기 위한) 장려[우대]책 [본문으로]
11. as opposed to ; (격식) …와는 대조적으로; …이 아니라 [본문으로]
12. subsidies ; 보조금 [본문으로]
13. stimulate ; 1. [타동사][VN] 자극[격려]하다, 활발하게 하다 [본문으로]
14. consumption ; 2. (상품의) 소비 ;; 참고 conspicuous consumption, consume [본문으로]
15. paycheck ;[명사] 급료 (지불 수표) [본문으로]
16. hence ; [부사] (격식) 이런 이유로 [본문으로]
17. circulation ; 2. [U] 유통(무엇이 이 사람 저 사람 또는 여기저기 돌아다님을 나타냄) [본문으로]
18. efficiency ; 1. [U] 효율(성), 능률 [본문으로]
19. train for ; …에 대비해 훈련하다. [본문으로]
20. technological development ; 기술의 발달 [본문으로]
21. business efficiency ; 사무 능률 [본문으로]
22. appealing ; 1. 매력적인, 흥미로운 [본문으로]
23. work ethic ; 노동관, (윤리관으로서의) 근면 ((보통 Protestant work ethic으로 쓰임)) [본문으로]
24. return ; 5. PROFIT | [U , C] 수익 [본문으로]
25. means ; 1. [C] ~ (of doing sth/of sth) 수단, 방법, 방도 ;; 단수 취급 [본문으로]
26. e.g. ; [약어] 예를 들어(라틴어 exempli gratia를 줄인 것. for example로 읽음) [본문으로]
27. alleviate ; [타동사][VN] 완화하다 [본문으로]
28. net increase ; 순수 증가(분) [본문으로]
29. disemployment ; [명사] 해고. [본문으로]
30. analogue ; [명사] (격식 또는 전문 용어) 유사체 [본문으로]
31. hamper ; [타동사][VN] [흔히 수동태로] 방해하다 [본문으로]
32. downturn ; [명사] (주로 단수로) ~ (in sth) (매출 등의) 감소[하락]; (경기) 하강[침체] [본문으로]
33. inefficiency ; 2. 비능률적인 것 ;; 문장에서 가산명사로 활용한 것을 확인 [본문으로]
34. demand of ; …에게 요구하다. [본문으로]
35. compensate ; 1. [자동사][V] ~ (for sth) 보상하다 [본문으로]
36. productive ; 2. 결실 있는, 생산적인 ;; 참고 ; counterproductive [본문으로]
37. self-checkout ; [명사, 형용사] (신조어) 셀프 계산대(의). 계산원 없이 구매 물품을 계산할 수 있도록 하는 상점 시스템 [본문으로]
38. property crime ; Property crime is a category of crime that includes, among other crimes, burglary, larceny, theft, motor vehicle theft, arson, shoplifting, and vandalism. Property crime is a crime to obtain money, property, or some other benefit. This may involve force, or the threat of force, in cases like robbery or extortion. Since these crimes are committed in order to enrich the perpetrator they are considered property crimes. [본문으로]
39. misery ; 2. [U] 빈곤 [본문으로]
40. exclusion ; 1. [U] ~ (of sb/sth) (from sth) 제외, 배제; 차단 [본문으로]
41. ethnic ; [명사] (특히 美) 소수 민족 출신자 [본문으로]
42. labor force ; [명사] (기업・국가의) 노동력[노동 인구] ;; work force [본문으로]
43. payroll ; 2. [주로 단수로] (한 기업의) 급여 지불 총액 [본문으로]
44. unskilled ; [형용사] 특별한 기술이 없는[필요 없는], 특별한 훈련을 받지 않은 [본문으로]
45. artificially ; [부사] 인위적으로; 부자연스럽게 [본문으로]
46. damaging ; [형용사] ~ (to sb/sth) 손상[피해/훼손/악영향]을 주는, 해로운 [본문으로]
47. entice ; [동사] ~ sb (into doing sth) (보통 무엇을 제공하며) 유도[유인]하다] [본문으로]
48. price out ; 터무니없는 값을 매기다.;; 임금, 상품 가격을 크게 인상함으로써 특정 집단, 상품을 몰아내거나 배척하다 [본문으로]
49. accumulate ; 1. [타동사][VN] (서서히) 모으다, 축적하다 [본문으로]
50. work experience ; [명사] (근무) 경력, 일의 경험. [본문으로]
51. hence ; [부사] (격식) 이런 이유로 [본문으로]
52. graduate ; 4. [자동사][V] ~ (from sth) to sth (~을) 그만두고 ~을 시작하다 [본문으로]
53. non-labor ; 비노동 [본문으로]
54. represent ; 3. BE EQUAL TO | [V-N] [진행형으로는 쓰이지 않음] (…에) 해당[상당]하다 [본문으로]
55. circulate ; 3. [타동사][VN] ~ sth (to sb) (단체의 모든 사람들에게) ~을 돌리다[알리다] [본문으로]
56. in proportion to ; …에 비례하여, …와 균형을 이루어 [본문으로]
57. thereby ; [부사] (격식) 그렇게 함으로써, 그것 때문에 [본문으로]
58. overall ; [형용사] [명사 앞에만 씀] 종합[전반]적인, 전체의 [본문으로]
59. earning ; [pl.] 1. 소득, 수입 [본문으로]
60. cover ; 11. WITH INSURANCE | ~ sb/sth (against/for sth) (분실・상해 등에 대비해 보험으로) 보장하다 [본문으로]
61. exceed ; (격식) 1. (특정한 수・양을) 넘다[초과하다/초월하다] [본문으로]
62. income distribution ; 소득 분포[분배] [본문으로]
63. be allocated to ; ~에 할당되다 [본문으로]
64. needy ; (need・ier , needi・est) 1. (사람이) (경제적으로) 어려운, 궁핍한 [본문으로]
65. legal minimum wage ; [명사] 법정 최저임금 [본문으로]
66. restriction ; 1. [C] ~ (on sth) (법률・규칙을 통한) 제한[규제] [본문으로]
67. legislate ; [자동사][V] ~ (for/against/on sth) (격식) 법률을 제정하다 [본문으로]
68. be equivalent to ; ~와 맞먹다, 상당하다, 동등하다 [본문으로]
69. OECD ; 경제 협력 개발 기구 [본문으로]
70. alleviate ; [타동사][VN] 완화하다 [본문으로]
71. sub-minimum ; [명사] 최저의 기준(율, 할당량, 정량) 이하의 [것]. [본문으로]
72. correlation ; [C , U] ~ (between A and B) | ~ (of A with B) 연관성, 상관관계 [본문으로]
73. causation ; [U], (격식) 1. (다른 사건의) 야기 2.인과 관계 ;; 동의어 ; causality ; [U] (격식) 인과 관계 [본문으로]
74. reverse ; 2. CHANGE TO OPPOSITE | [타동사][VN] (결정 등을) 뒤집다 [본문으로]
75. opposition ; 1. [U] ~ (to sb/sth) (~에 대한 강한) 반대[항의] [본문으로]
76. differ as to ; ~에 관해서는 다르다 [본문으로]
77. economic performance ; [명사] 경제적인 성과, 경제성장 [본문으로]
78. discernible ; [형용사] 보고 알 수 있는; 인식[식별]할 수 있는 ;; 미국∙영국 [disə́:rnəbl,-zə́:rn-] [본문으로]