The Fair Minimum Wage Act of 2007 increased the minimal pay of $ 5. 15 per hr to $ 7. 15 per hr. It is believed that an addition in the lower limit pay will non make negative deductions on occupations. employment and rising prices. Rather. pay addition legislated in the past three decennaries have made the most positive impacts in the economic system. as the economic system experienced the strongest growing during these times. and at the same clip has generated more occupations. In contrast. when the lower limit pay was held at a dead rate. fewer occupations have been created ( Democrats Discuss… ) .
Furthermore. rewards held at the minimal degree translates to take down productiveness degree. In add-on. provinces that are based on the minimal pay rates suffer from the high happening of unemployment. This is true in the instance of Virginia. Wyoming and Hawaii ; wherein the rewards were kept in the lower limit degree which resulted to high per centum of unemployment. In add-on to this. the addition in the unemployment rate is translated to alterations in the GDP. Harmonizing to economic expert Arthur Khon. every 1 % addition in unemployment rate. the GDP falls by 2. 5-3 % .
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Therefore. if the pay rate is ever kept at a minimal degree. the inclination that unemployment rate will lift besides additions. therefore it creates a negative consequence towards the country’s GDP ( Mackenzie ) . Therefore. an addition in the minimal pay rate will hold direct effects in the economic system. First. it will interpret in the addition of productivity degree of the workers. it will besides better the purchasing power of the consumers and it will decrease the unemployment rate – all of which will hold a positive rise in the GDP of the state.
