Two of the most debated issues of the past several months during the 2016 U.S. presidential primary race are the minimum wage laws and free trade policies. When narrowing potential presidential candidates, it is vital for Americans to look for what each potential candidate proposes regarding specific situations such as minimum wage and free trade.
Oddly enough, Bloomberg conducted a study and concluded that those who worry about Americans hurt by free trade may not pay attention to these wage hikes.
Raising the minimum wage to $15 an hour, as some states are doing, will create both winners and losers since from the economist perspective, it is difficult to keep the quantity of labor supplied and the quantity of labor demanded at equilibrium with the same wage.
Raising the minimum wage will allow workers to get paid more than the typical worker, which will increase those workers’ benefits. However, there are several low-skilled workers who will not receive the job with the higher minimum wage.
The quantity of labor supplied will be greater than the quantity of labor demanded by the companies. It will become too costly for companies to pay numerous workers that higher wage equally.
Raising the minimum wage will increase unemployment rates since workers will be seeking jobs that provide a higher wage than the average company. This is due to the fact that employers will not be able to supply all their workers with a high wage.
With the topic of free trade, lowering barriers to cheap foreign imports could make millions of Americans better off in order to be able to afford both necessities and wants. However, this will undeniably hurting others through the action of closing down their factories across the country, which would also increase the unemployment rate.
When it comes to the minimum wage, the presidential candidates are all about the greater good for the majority, but on the topic of trade they’re focused intently on protecting the disadvantaged minority.
Advocates of a $15 minimum wage argue that economic research has shown little or no job loss from raising the floor. The U.S. Department of Labor even posted an undated page on its website called “Minimum Wage Mythbusters” that says it’s “not true” that a higher minimum wage will cost jobs.
Overall, it just depends on how much the minimum wage is raised. That Mythbusters page that the U.S. Department of Labor created cites a letter by more than 600 economists across America, including seven Nobel laureates, who say minimum wage hikes to date “have had little or no negative effect on the employment of minimum-wage workers” according to Bloomberg.
However, in 2014, some economists were advocating raising the wage floor to $10.10 an hour by this year. That’s a far cry from $15.
It is neither right nor wrong to favor a higher minimum wage but oppose freer trade, or vice versa. There are both evident pros and cons to this debate that have been ongoing for the past few decades.
It is vital to be aware that the argument that someone uses to make their case on one issue could be used against them on the other side.
With these presidential primary debates that we have watched and as the race becomes tighter, topics such as free trade and minimum wage laws will surely be brought up since they can easily determine where the voters are going to be gravitating towards when it comes to a potential candidate.