Scott Wollas Would Increasing the Minimum Wage Reduce Poverty

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Scott Wolla's “Would Increasing the Minimum Wage Reduce Poverty”
The article seeks to create an understanding in regards to the relationship between minimum wage and poverty. The minimum wage has actually been implemented in most cases whereby poverty needs to be alleviated or controlled. The minimum wage idea has been applied in major sectors of the economy even though a large segment of the labor force has been left out of the statistics. Many people, according to this newsletter, always thrive to raise fair amount of earnings that can help sustain their lifestyles as well as their households. The labor markets just like any other market often have both the demand side as well as the supply side. The interaction between these two sides often ends up creating an equilibrium wage (Card, 1994). On the same instance, the minimum wage actually acts as the price floor necessary for labor that is considered low skilled. High wages would decrease the number of workers that a company is wishing to hire. This is because the employees would end up coming to work with high expectations that the company may fail to live up to due to low income seen in the general structure of financial strength. What results from this is a surplus seen in the employees because more workers would be seeking the jobs in a very narrow job market. The individuals who fail to get employment during such times end up unemployed and the joblessness cycle continues (Grossman, 1978).
According to economists, it is seen that wage is an outcome of the labor market. It is through this idea the major economists have always avoided making great value judgments that regard the fairness of wages. On the other hand these economists prefer assessing the policy of minimum wage. They do this because they have to measure the benefits and the economic costs of the policy as well as how effectively this helps one achieve their intended goals. On a census carried out to establish whether rising of the minimum wage up to around nine dollars each hour would somehow make it a bit harder for individuals that have low skills to actually find gainful employment. There was an even split between the leading economists whose thoughts and ideas were sought with 34 percent of those who polled agreed with the statement while 32 percent others disagreed as others remained undecided. Most of the economists that often support high minimum wages were very much aware of the fact that this kind of policy had capability of reducing employment opportunities but they argued that the case would not be that bad because simply because the wage benefits would be of great help to those who earned and worked for it. Many individuals who were really affected by the minimum wage decisions that were made did not like the arguments. Especially in the point in which economists argued that the benefits of high wages would always end up outweighing costs brought about at the times that there occurred various job cuts (Neumark, 2008).
Economists, according to this newsletter tend to warn that there could be various unintended consequences that the policy would bring about in a way that would end up hurting the ones that the policy was intended to help. This could be seen in the example that the policy actually decreased the amount of jobs that were available for the low skilled individuals. This reduces levels of access to those who are the youngest or the least skilled as it restricts their entry into a world that would help them turn things around and help them develop into actually skilled and more developed individuals. The poor people who get jobs during such turbulent times from their perspective end up lacking the benefits gained from high wages and when there are job cuts they end up being amongst the first few to be cut off. In this case therefore, the ones who should actually be the greatest beneficiaries end up losing ground on the benefits that should arrive with it (Lo...