Question

HOW EARNING MINIMUM WAGE MAY AFFECT (OR NOT) ONE’S ABILITY TO MOVE UP THE LADDER. (100-300 words)

Answer 1

other workers at in their own workplace. To the enbent that employees are conce- sned about relative wages within a business, firms may raise wages in accordance wage inequality and booking stagnant wages at the bottom of the ware ladder. -> states and cities across the united states are increasing minimum wages within their jurisdictions, sparking other Policymakers around the nation and on Capitol Hill to consideo whether these changes affect the wages of all workers not just those at the very bottom of the hourly pay scale who immediately bene- fit from a higher minimum wage. The minimum wases enhances the bargaining Power of many low ware wookers, an increased minimum wages effectiveness in doing so dissipates as it spreads across the wage spectrum, essentially disappe- aring for middle class wage earners. At the same time, assessing the enact impact of raising the minimum wage on specific eamers may reanire higher qual- ity hourly wage data on all workers than is currently available in standard hou- sehold Surveys in the united stakes. The minimum wage more broadly in the U.S. labor market. In Par- kicular, economie theory suggests that increasing the minimum wage will raise the wages of other workers when employees need to compebe for workers, as in some search and matching models of the labor market. Imagine all firms occu- py sungs on a ladder, ranked by how well they pay their workers. After a wase increase, the lowest paying firms raise their wage to the new minimum- This leads the next songs of higher paying froms to raise wages as well to increase their ability to recouit and retain workers who would have better option elsewhere due to the minimum ware increase. The minimum wage then fillers its way up the labor market, with ripple effects declining in influence further up the ladder. Alternatively, workers may care about how they are paid relative to with their institucional nooms. minimum wages are an important piece of the Policy boolkit affecting improving middle class wages will require other strategies. minimum