1. Minimum wage

2. Background
It was introduced in 1938 during great depression under president Franklin Delano Roosevelt.
Started with $0.25 per hour and it has been increased by congress 22 times.
Most recent was in 2009 from $6.55 to $7.25.
29 states and D.C. have a minimum wage higher than the federal minimum wage.
2,561,000 workers earn the federal minimum wage.

4. Pros of Raising Minimum Wage
Reduce Poverty
Person who makes $7.25 per hour earns $15,080 in a year, which is 20% higher than the 2015 federal poverty of $12,331.
Increasing a minimum wage to $9 would lift 300,000 people out of the poverty and increasing to $10.10 would lift to 900,000 people out of poverty.

6. Reduce Government welfare spending
By raising the minimum wage people will make more money and they will be able to afford the daily spending.
The center for American progress reported in 2014 that raising the federal minimum wage by 6% to $10.10 would reduce spending on SNAP by 6% or 4.6B.

7. Improvement in productivity and low Training cost
By raising minimum wage people will be happy at their job and will have increased in productivity.
By paying more than the minimum wage workers will not leave the company and stay and move within the company. This will decrease the training cost of new workers.
For an Example: Wegmans
They are known for paying their employee more than minimum wage. They also pay more than the other competitor. This saves them tons of money form hiring and training new people.

8. Reduce income inequality
In 2012 the richest 1% of the US population earned 22.83% of the nation’s total pretax income resulting the biggest gap between poor and rich.

9. Healthier population and prevent premature deaths
Study found that California minimum wage to $13 an hour by 2017 would significantly benefit health and well being.
Those who earn higher than the minimum wage would have enough to eat, be more likely to go to exercise, less likely to smoke, suffer from fewer emotional and psychological problems and will prevent 389 premature deaths.

10. Increase in school attendance and decrease school drop out rates
Study found that raising California wage would increase the income of 7.5 million families. That means fewer will live in poverty.
Teens who lives in poverty more likely to miss school that means we will have less teens missing school.

11. Reduce federal deficit
By lowering spending on public assistance programs and increasing tax revenue.
Because of payroll and income tax revenues would rise as a results of an increase in the minimum wage federal deficit would come down.

12. Reduce crime
Higher wages for low income individual reduce crime by providing liable and sustainable employment.
Raising the minimum wage to $12 by 2020 would result in a 3 to 5 percent crime decrease.

13. Supply, Demand, and Policies of Government
Price controls
Use of the power of the state to establish prices different from the equilibrium prices
Price ceiling
Legal maximum price
Price floor
Legal minimum price

14. A price floor set below the equilibrium price has no impact on the market

15. A price floor set above the equilibrium price is a surplus

16. The cons of raising minimum wage for employers
Raising the minimum wage would cause employers to:
Hire fewer workers
Unemployment rate will go up
Close their companies
Raising the minimum wage would encourage companies to move where the cost is lower
It would increase the price of consumer goods

17. A pizza shop hired 6 people with a minimum wage of $5 per hour
That is $30 for these 6 people.
If the minimum wage increases to $10 per hour, they would have to pay them 60$ which is $30 more than what the shop usually takes out of their budget.
They would have three choices:
They can either lay off 3 employees and
Keep on paying $30,
they can increase pizza prices and

18. The impact of raising minimum wage on society
People without experience, skills or education will not get into the labor force
Increase drop-out rates
Increase crimes
Increase poverty

19. Who would it affect in New England?
About 1 in 3 workers in New England earns less than $15 per hour.
More than 1 in 5 children have a parent that makes less than $15 per hour.
The people that make more than $15 are people with a bachelor’s degree
The majority of Black and Latino workers in some states have hourly wages below $15.

20. Basic Income
Andrew Zucco

21. What is it?
Guaranteed Basic Income = free gov’t funded salary for everyone, replacing safety net programs
“No one would have to be a workaholic only out of fear that they’d have nothing to fall back on if they stopped”—Natalie Foster (Institute for the Future and New America California)

22. Basic Income Around the World
Finland: planning experiment to give 100,000 citizens nearly $1,000/month
Netherlands: 4 cities to start trial programs
Canada: Ontario preparing for trial/considering national test
France: parliament discussing Basic Income
Switzerland: referendum in June to give $2,500/month, only got 23% of the vote

23. Basic Income in the U.S. Silicon Valley/San Francisco Bay Area
Y-Combinator (tech incubator) planning to run a Basic Income experiment in an unnamed American community, with an additional pilot program in Oakland, CA

24. Why Basic Income?
--Automation and Artificial Intelligence displacing jobs, and America has a lot of poor people
--7.4 million unemployed, 6 million working part-time because they can’t find full-time jobs, millions have given up looking, and possibly tens of millions have settled for jobs with low wages, poor benefits/working conditions

25. Why Not? Expensive: could add $2 Trillion to U.S. budget annually
Possible side effect of disconnecting large portion of population from positive aspects of working for a living
“The idea of a basic income is a good one in a world where robots do most of the work, but we probably won’t be there for another years”—Erik Brynjolfsson (studies digital economy at MIT’s Sloan School of Management)

26. Why Not? (continued)
Could be argued that Basic Income is a means of “buying off” lower income people rather than developing education and training programs that could help fix income inequality, etc.
“At a time when the tech economy is generating huge amounts of wealth, is the Silicon Valley just attempting to appease those left behind?”—David H. Freedman

27. Questioning Basic Income
Wouldn’t free, unearned income decrease money’s value and increase inflation?
If we already add 100k+ jobs/month, why aren’t we fixing the skills gap instead of the wage gap?
Would recipients of Basic Income spend the money wisely, or would they spend it recklessly and stay poor and “need” more money to live?
If everyone, rich or poor, gets Basic Income, how would social status change at all if everyone is getting the additional money?

28. Alternative Solutions
Expand/Reform current programs
Implement a training program/training wage to fill skilled job surpluses
Limit/Restrict Automation