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An increase in the minimum wage is a form of redistribution from higher-income persons (business owners or "capital") to lower income persons (workers or "labor") and therefore should reduce income inequality. The CBO estimated in February 2014 that raising the minimum wage under either scenario described above would improve income inequality.
Now, pointing to the state’s affordability issues, proponents of Proposition 32 would have you believe raising the minimum wage from $16 to $18 per hour offers a solution for entry-level workers ...
The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth century.
An imposition or increase of a minimum wage will generally only affect employment in the low-skill labor market, as the equilibrium wage is already at or below the minimum wage, whereas in higher skill labor markets the equilibrium wage is too high for a change in minimum wage to affect employment.
The minimum wage under federal law is $7.25 an hour, though many states set higher minimums. Four states and several cities have a minimum wage of at least $15.
In California, the state minimum wage as of January 1, 2024 was $16 per hour. [6] [note 1] As of July 2024, California had the highest minimum wage of any state and was the highest in the country except for some part of New York (which also have a $16/hour minimum wage) and the District of Columbia (which has a minimum wage of $17.50/hour). [9]
If the U.S. raised the minimum wage to $15 per hour by 2025, for example, the country would lift an estimated 900,000 people out of poverty and raise the income for 17 million employees (roughly 1 ...
The study found the decline in progressivity since 1960 was due to the shift from allocation of corporate income taxes among labor and capital to the effects of the individual income tax. [ 106 ] [ 108 ] Paul Krugman also supports this claim saying, "The overall tax rate on these high income families fell from 36.5% in 1980 to 26.7% in 1989."