On July 24, 2009, the federal minimum wage rose to $7.25 per hour for most occupations in the private sector. While 29 states, some cities and counties, and the District of Columbia have established a minimum wage higher than this rate, the federal minimum wage has remained at $7.25 per hour. Over the past several years, support for an increase in the federal minimum wage has come from a wide variety of sources. Many of those who support an increase in the minimum wage believe this is one way the government should exercise its social responsibility in an attempt to reduce poverty. The following items address the idea of raising the minimum wage from the current federal minimum of $7.25 per hour.

1) Minimum wage is a price floor, so discuss an increase in the minimum wage from a supply and demand standpoint, making sure to address the concept of surplus with respect to the quantity of labor supplied and the quantity of labor demanded that is generated by this price floor.

2) What will be the impact of an increase in the minimum wage on the prices of the products produced by workers with wages at or near the minimum wage, and how will this affect overall consumer purchasing?

3) Discuss any potential changes in the incentives for low-skilled workers to increase their human capital, and for employers to substitute capital inputs (technology and automation) for labor.

4) What might be the impact on government spending on entitlements such as welfare, the Supplemental Nutrition Assistance Program (SNAP, which is also known as food stamps), and unemployment compensation, in light of the fact that changes in the minimum wage can create changes in unemployment and underemployment?

Based on your responses, do you believe that the minimum wage should be raised, lowered, remain as it currently is, or be altogether eliminated? Explain your answer, and make sure to address any social responsibility the government should have regarding the well-being of its citizens with respect to the setting of wages in the private sector.

This is a really long question, but I desperately need help. Thank you very much