Increasing Minimum Wage Essay Outline

Do you remember the fable The Ant and the Grasshopper? The ants work all summer long preparing for winter and storing food. The grasshopper laughs at the ants, and he plays all summer because he has plenty of food (for now).

When winter comes, the grasshopper is starving, begging for food because he didn’t prepare for the long winter.

Don’t be the grasshopper. Be the ant.

When it comes to writing a paper, be organized, prepared, and work smartly to finish your essay so that you’re not struggling at the last minute.

Here’s one way you can be like the ant. You can work smarter on your essay about minimum wage and get the assignment done before the due date!

3 Ways to Work Smarter on Your Minimum Wage Essay

Raise your hand if you’ve ever worked a minimum wage job. Keep your hand up if you’ve felt that you deserved more than minimum wage for your work. (I’m guessing your hand is still in the air.)

This is a good start to your paper as you have some knowledge about the topic and have an interest in what you’re writing about. This passion and knowledge can be especially useful if you need to argue your topic or write a persuasive essay about the topic.

But where do you go from here? Rather than spending time writing at the last minute with no real direction, follow these three tips to work smarter on your essay.

Tip #1: Find your focus (AKA, your thesis statement)

The thesis statement provides direction and tells readers what to expect when reading your paper. It also includes the stance of your paper.

In a minimum wage essay, you’ll write about whether raising the minimum wage would be beneficial or whether raising the minimum wage might create some damage to businesses and the economy.

If you’re not sure of your stance on a minimum wage essay, try out a few thesis statements to help focus your ideas.

Sample thesis statements:

In favor of raising the minimum wage

  • Raising the minimum is necessary in order to provide a livable income to low-wage workers.
  • Raising the minimum wage will help stimulate the economy because low-wage workers will be able to spend more.
  • Increasing the minimum wage encourages workers to be dedicated to their jobs because they will be happier and more satisfied with their positions.

Against raising the minimum wage

  • Increasing the minimum wage can cause employers to hire fewer people, thereby actually putting some employees out of work.
  • Companies and businesses may increase prices in order to cover any increases in the minimum wage, and consumers will suffer.
  • Raising the minimum wage discourages people from returning to school for training or higher education because they can earn a livable wage at their current jobs.

If you determine your thesis statement, you’ll have a better sense of your stance on the subject.

Still stumped on how to find or narrow your focus? Get inspired by some example essays about minimum wage. Or read How to Narrow a Topic and Write a Focused Paper. Mind mapping can also be helpful—and fun if you want to get creative.

Once you have your focus down, the next step is to develop your ideas and decide what information you’ll use to support your claims.

Tip #2: Do the research

It’s fine to have an opinion on something, but if you’re writing a research essay or just need more information to support your opinion, you’re going to need some sources.

If you plan to do most of your research online, it’s especially important to check to make sure you’re using credible sources. Use the CRAAP test to make sure the websites are worth citing.

To start your research, you might want to do a Google search for news articles. Look for basic articles from credible news sources (such as the ones I’ve listed below). This gives you a quick synopsis of the most recent events related to your topic.

Here are a few news sources you might review for your minimum wage essay.

If you’re ready to move on to more scholarly reading, try Google Scholar. You’ll find more detailed, research-based articles. Google Scholar includes sources that have already been determined to be credible. So you’re pretty safe choosing these types of sources.

Here are a few Google Scholar articles you might want to check out:

If these articles aren’t the exact sources you need for your paper (and they’re probably not), read 5 Best Resources to Help With Writing a Research Paper to learn more about where you can find additional sources.

Tip #3: Outline ideas

Now that you have a topic and sources for your paper, it’s time to sketch out a few thoughts as to what your paper will look like.

You can do this by writing a formal outline (which may be required by your instructor). Or you might just jot down a few ideas to help organize your thoughts.

(Bonus tip: Try these 6 Prewriting Strategies to Get Your Essay Rolling.)

If you need a formal outline, check out 7 Essay Outline Templates to Get Your Essay Going and How to Craft a Research Paper Outline.

If you just need to sketch out some ideas, you might try something like this:

Introduction:

  • Start with a hook to grab the reader’s attention. In an essay about minimum wage, you might start with a shocking statistic or quote about minimum wage. For example, “In 2014, about 1.3 million U.S. workers age 16 and over earned exactly the prevailing federal minimum wage of $7.25 per hour” (http://poverty.ucdavis.edu).
  • End the introduction with a focused thesis statement. Remember, you might be arguing either for or against raising the federal minimum wage.

Body Paragraphs:

  • These paragraphs will provide evidence to support each argument. For instance, you might argue that the federal minimum wage must be increased because it’s virtually impossible to survive on a minimum wage job. You can cite statistics about how much the average worker makes. Then you could also include information about how much it costs to live and how much it costs to support a family. You might also include statistics about how many minimum wage workers qualify for other forms of federal aid, such as subsidized housing, medicaid, or food subsidies.

Conclusion:

  • You’ll wrap up your paper by restating key ideas and leaving readers with something to think about. If you’re arguing in favor of raising the minimum wage, you might ask people to consider how much the increase will truly help those in need.

Working Smarter

By being a smart worker ant, your hard work has paid off. You now have a topic, thesis statement, sources, arguments, and an outline. You’re ready to write your minimum wage essay!

This means you still have time to make sure your paper is in tip-top shape before you submit it. Before you turn in your paper, re-read the assignment guidelines. Also make sure you’ve cited your paper in the proper format (APA and MLA are used most frequently).

And since you’ve planned ahead and have ample time to revise your paper, have a Kibin editor help you with revisions!

Good luck!

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This article presents an overview of the issue of the rate of the minimum wage in the United States. The Fair Minimum Wage Act of 2007 established that the federal minimum wage would increase from $5.15 an hour in 2006 to $7.25 an hour in three stages by 2009. The debate about whether raising the minimum wage has a beneficial effect on the employment rates for low-skilled workers as a group has partially reverted to the form it took in the Progressive Era (between about 1912 and 1923). What was then termed a "family wage" has recently been more modestly recast in terms of an adequate living wage for an individual. Much of this debate implicitly surrounds the issue of whether the private sector or the public sector should bear the burden of relieving poverty. The debate focuses on whether the government can (or should) attempt to tweak the economic system in order to encourage the market to effectively absorb low-skilled workers. The answer to both elements of this question is a mildly qualified "yes," according to recent revisionist studies on the issue over the previous several decades.

Keywords Card-Krueger Theory; Deadweight Loss; Earned Income Tax Credit; Fair Minimum Wage Act of 2007; Family Wage; Liberty of Contract Principle; Living Wage; Monopsonistic Competition; Oppositional Subculture; Perversity Thesis; Poverty Line; Prevailing Wage; Reservation Wage; Real Wages

Social Issues

Overview

Historical Background

Before 1938, attempts to legislate a minimum wage at the federal level met resistance in the courts based on a "liberty of contract" principle. In short, the government was not prepared to interfere with the prerogatives of employers. Early state legislation dealing with a minimum wage requirement largely addressed the interests of female, immigrant, and child employees who worked in sweatshops and were not represented by unions (Herbert, 2006). Once the Depression arrived, the 25 percent unemployment rate was considered compelling grounds for state intervention and the establishment of a federal minimum wage (Levin-Waldman, 1998).

The real value (or, the "purchasing power") of the minimum wage increased rapidly after 1949 and reached its peak value in 1968. Its real value fell 20 percent between 1997 and 2006 and about 40 percent between 1968 and 2006. In other words, the minimum wage in 2006 would have been between $9 and $14 an hour if it had been indexed for inflation in 1968 to account for the rising cost of living. In the 1950s, the minimum wage was set at half of average income of a production (meaning non-managerial or non-supervisory) worker. The prevailing wage of a production worker is now about $17 an hour. The idea of indexing the minimum wage for inflation has only recently been re-examined by Congress and the Democratic Party, and several states have enacted legislation to implement this policy (Pratsch & Sheth, 1999, p. 466; Uchitelle, 2006).

Between 1949 and 1977, Congress increased the minimum wage whenever inflation caused its real value to fall below the level of income that one worker would require to keep a family of three above or near the poverty line. Since the early 1980s, however, a full-time job paying minimum wage has usually been just enough (about $15,000 a year now) to keep a single person with no children above the poverty line. In short, inequality of income has grown substantially since the 1970s (Dalmut, 2005, p. 94-98). In 2012, a restaurant industry CEO made 788 times more on average than a minimum wage worker made in a year (Eisenbrey, Sabadish, & Essrow, 2013).

Minimum wage earners were worse off in 2013 than in 1997 or 1968, though their numbers have improved since the implementation of the Fair Minimum Wage Act of 2007 (Elwell, 2013). According to a study by economists, 15 percent of American workers earned minimum wage in the 1980s. By 2012, that figure had declined to 4.7 percent (Rocheteau & Marat, 2007; U.S. Bureau of Labor Statistics, Minimum wage workers, 2013). Porter (2007) suggests that these figures more than double the actual decline in minimum wage workers. This discrepancy is probably explained by the fact that tens of millions of workers make slightly less or slightly more than the minimum wage. Tipped workers (namely, servers) can legally be paid less than $2.50 an hour if gratuities raise their pay to the minimum wage. Short-term agricultural workers, some minors, and the disabled can be legally employed for less than the minimum wage, and more than 1.5 million workers now earn less than the federal minimum wage.

Increasing the Minimum Wage

Between 13 and 27 million workers (or 10–20 percent of the workforce) received a raise when the Fair Minimum Wage Act was fully implemented in 2009 (Pratsch & Sheth, 1999; Economic Policy Institute, 2007). In other words, 33 percent of the American workforce earned less than $7.25 an hour in 2006 (Uchitelle, 2006). About 15-20 percent more women and ethnic minorities than white males benefited from this pending raise (Economic Policy Institute, 2007). The vast majority of minimum-wage workers occupy the service sector, which tends to be very stable. McDonald's and Burger King will not likely relocate to another state or nation if the minimum wage increases locally or nationally (Porter, 2007).

Some employers who pay roughly the minimum wage have been willing to consistently keep their wages slightly higher than the local standard in order to attract good employees. For similar reasons, other employers will not pay sub-minimum wage amounts to workers (for example, to out-of-state minors) even when doing so would be legal. The theory is that a worker's perception of receiving a fair or advantageous wage will improve worker performance and reduce employee turnover, which is invariably high and relatively costly in the service sector. This principle is referred to in terms of shaping workers' incentives and acknowledging workers' reservation wage. A "reservation" wage denotes the minimum level of pay that a worker is willing to accept for a specific type of work. One might, for example, be willing to accept less pay (to lower one's reservation wage) for a job that is undemanding, familiar, or otherwise convenient (e.g., that will reduce travel expenses). A raise in the minimum wage is generally thought to attract more semi-skilled or semi-experienced workers to the low-paying job market and thereby increase competition for low-end jobs (Simon & Kaester, 2004; Falk, Fehr, & Zehnder, 2005).

There is statistical evidence that a substantial increase in the minimum wage has triggered relatively consistent patterns of unemployment among the least-skilled workers. The 90 percent raise in the minimum wage in 1947 resulted in about 15,500 jobs losses; the increase in 1972 resulted in 90,000 job losses; and after 1974, 120,000 long-term job losses can be linked with increases to the minimum wage. These effects tend to last from about one to five years (Wolfson & Belman, 2003). This pattern has been termed the "perversity thesis" in which a social policy meant to help poor workers accidentally had the opposite effect for some of them (Pratsch & Sheth, 1999, p. 465).

Alternative approaches to increasing the minimum wage for the purposes of combating poverty include expanded tax credits (which exist in the form of the Earned Income Tax Credit for low-income workers with two or more children), direct or indirect subsidies to workers, and subsidies to employers. All of these approaches transfer more of the burden for relieving poverty from the private sector to public resources.

The Living Wage

About 150 cities or counties have enacted living wage measures that account for localized prices. These measures usually only apply to workers who hold state contracts such as home health-care workers, garbage collectors, and security staff (Shipler, 2004, p. 291; Greenhouse, 2007). Housing expenses in large urban areas are often twice as high as in rural areas in the same state (Dalmut, 2005). Establishing a mandatory living wage is not an alternative to increasing the minimum wage but rather a significant extension of essentially the same approach that primarily benefits semi-skilled workers.

About a hundred years ago, unions attempted to establish a similar standard under the principle of a "family wage." A family wage was supposed to provide a male worker with enough income to support a wife and child. Most married women then did not receive income and, the notion of a family wage is largely outdated. The nation's first state-wide living wage legislation was enacted in Maryland. Virtually all employees holding state contracts are required to receive a minimum of $8.50 an hour in rural areas and $11.30 an hour in the Baltimore-Washington corridor. Similar local legislation elsewhere requires an hourly wage as high as $14.75 for workers holding a state contract (Greenhouse, 2007).

A Washington State University study concluded that minimum wage increases at the state level have been beneficial to 97 percent of low-skilled workers (Egan, 2007). The bulk of the evidence is not quite that encouraging. The long-standing conventional argument among economists until the early 1990s had been that a substantial increase in the minimum wage would price low-skilled workers out of the lowest level of the labor market. In other words, raising the minimum wage would encourage employers to eliminate the least-productive workers or cease to hire new entry-level workers. The recent revision of this argument, known as the Card-Krueger thesis (or paradox), asserts that a higher minimum wage may not necessarily increase the rate of unemployment and can have non-detrimental or even beneficial results across the board; that is, in terms of wages, fringe benefits (such as health care), and employer productivity. Prices almost invariably increase after the rise of the minimum wage, but overall sales in the service sector have not suffered significantly according to most research.

The Card-Krueger Thesis: A Paradox?

This result is based on some specific studies of the fast-food industry after state minimum-wage rates were increased by about ten percent circa 1990. The conventional logic was that a ten percent raise in the minimum wage would result in a 1 percent rise in unemployment for adults and a 2 or 3 percent increase for teens. Those who have investigated the Card-Krueger model further have usually concluded that a large increase in the minimum wage results in an extensive reorganization of the employment patterns of low-skilled workers but not a decrease in overall employment or earning. Perhaps the most questionable element of the Card-Krueger model is that it is most applicable to states that were relatively prosperous before a higher minimum wage was established, whereas the conventional model may apply more to poorer states or during times of severe recession.

The number of scholarly studies about the minimum wage quadrupled around the time that Card and Krueger (1994; 1995) published their influential and controversial early study (Wolfson & Belman, 2003). Curiously, David Card and Alan B. Krueger actually intended to confirm the consensual hypothesis of economists but arrived at largely antithetical conclusions. The Clinton administration used their work to support its efforts to raise the minimum wage.

Card and Krueger (1994; 1995) initially studied the effect of the raise in the minimum wage in New Jersey circa 1989 for 410 fast-food restaurants with reference to similar restaurants in the neighboring state of Pennsylvania, which did not increase its minimum wage. They concluded that the New Jersey fast-food outlets were able to absorb the higher cost of labor by raising prices by 4 percent, that there was no loss of non-wage benefits (e.g., health care benefits) for workers, and that those fast food chains in New Jersey were able to open new franchises at their usual rate (Levin-Waldman, 1997; Ross, 2000; Porter, 2007). Only those New Jersey stores that paid more than the new minimum wage employed fewer workers than they had before the rate was increased. Others stores hired or employed more employees than they had previously and employment rates in New Jersey grew faster than those in Pennsylvania (Levin-Waldman, 1997; Porter, 2007).

This surprising result called for revision of the conventional logic about "monopsonistic" competition, which denotes an inverse condition to the better-known term "monopoly": a monopsonistic market is one in which there is only one buyer and many sellers (in this case, of labor). In theory, a wage higher than the prevailing wage should result in a decrease in employment and perhaps in prices. Card and Krueger did not call for a thorough revision of major elements of conventional economic theory, but their study opened the flood gates for such revisionism (Card & Krueger, 1995; Ross, 2000).

One possible and very straightforward interpretation of the Card-Krueger thesis is that the minimum wage has been excessively low since the 1980s in terms of the profits its recipients produced for employers. On this interpretation, employers...

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