Mayor Bill de Blasio
City Hall
New York, NY 10007
Tel: 311 or 212-NEW-York outside NYC
Dear Sir,
Re: Minimum Wage
I am writing on the above subject matter pursuant to Article 19 of the New York State Labor Law addressing the minimum wage. Although the law states that all employees are entitled to a minimum wage of $9.70 per hour effective from December 31, 2016, I believe that the city has the potential to do more. Even though the policy has since done a tremendous job in improving the situation of many workers, cities across the country such as Chicago have leveraged their policies to provide minimum wage as high as $13 per hour.
The news article , Chicago Tribune , dated September 7, 2018, discusses how the hike in the minimum wage in the state has promoted economic prosperity for all. The increased wages has improved worker conditions and at the same time, remained critical not to harm the jobs. Although Chicago's minimum wage currently stands at $12, there are plans to increase it up to $13 per hour next July. Therefore, to ensure that we keep our employees motivated and also prevent the prospects of leaving for other better-paying jobs, it would be imperative to create a similar policy.
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Economic Efficiency School of Thoughts
The Pareto's efficiency theory describes an economic model where if the circumstances of one individual are made better, the situation of another person will become worse due to the decision was taken. Robinson (2017) asserted that it is an ideal scenario that mostly occurs when the resources are utilized optimally. The theory was postulated by an Italian economist by the name Vilfredo Pareto. The Pareto efficiency measures how well or efficient resources are allocated without taking into cognizance the need for equality or fairness. It, therefore, means that although a group will benefit, there is also another faction that stands to lose.
According to the utilitarian school of thought, a policy is only regarded as good if “it yields the greatest good for the greatest number” (Robinson, 2017).The utilitarian efficiency measures how well a policy causes the fullest satisfaction to the highest number of people. It has its roots in the field of ethics and morality which essentially state that a good course of action is that which causes the ultimate good to the highest number of people. The school of thought was postulated by Murray Rothbard in his discussion about the utilitarian free-market economics.
News Article
According to the news source, the implementation of the minimum wage increase in Chicago has improved the paychecks for workers in the food service while remaining critical not to harm the job market. The article debunks the recent claims that the increased minimum wage has affected the job industry. It also paints a picture of the recent increase in the minimum wage that is happening in Chicago. The pay has since moved from a paltry $8.25 to $12 and is estimated to move up to $13 in the next few months (Ruiz, 2018) The obvious winners in this policy are the workers leaving in Chicago while the losers will be the employers who will have to endure high wage bills in their budgets. Therefore, the economic efficiency that has taken shape here is the Pareto’s school of thought.
Final Thoughts
I believe that attaining utilitarianism in economics is virtually impossible. Once an economic policy is formulated, there is a group of people that stand to lose. Therefore, for me, the best policy would be the Pareto because it is easier to achieve especially in a capitalist system like the United States. The mayor will learn from the lessons presented by Chicago and further assess the Pareto's efficiency model to ensure that workers have an increased minimum wage.
References
Robinson, T. J. (2017). Economic theories of exhaustible resources. Routledge.
Ruiz A. (2018) “Chicago's minimum wage hike not a job killer, new study says” Chicago Tribune. https://www.chicagotribune.com/business/ct-biz-Berkeley-minimum-wage-jobs-Chicago-0909-story.html
