Introduction
Most previous studies on minimum wage regulations have focused on society’s economic well-being. The discussions have been grounded on one hand; minimum wage increases the low-earning workers’ living conditions, thus, decreasing level of poverty (Kweon and Suzuki 269). While on the other hand, they instigate that the minimum wages lower employment opportunities, thus increasing poverty (Kweon and Suzuki 270). Despite an intensive study on minimum wage impacts, there has been little research on the determinants or the reasons for the minimum wage regulations. As the laws are contentious, it is critical to comprehend the forces that influence the increase and creation of minimum wages. A policy that is implemented to benefit some individuals is inefficient. Laws are supposed to address inefficient or unfair market practices like externalities. Secondly, regulations are enhanced to maximize the member’s rates of earning. This article aims to evaluate if the minimum wage regulation in the discipline of psychology is set solely on political considerations.
Literature Review
In the United States, both the state and the federal government decide on the minimum wages. A state can choose to regulate its minimum salary equal to or higher than the national wage. In addition, the state may set the minimum wage beneath the national level for employees who are not covered by the federal statute (Hayati and Ananda 39). The majority of the few studies carried out explore the factors that influence individual members of Congress and senators on increasing federal minimum wages. Limited research has been indulged in looking at the factors contributing to minimum wage levels at the state levels. State and national minimum wage research will be discussed separately to comprehend how they influence wage distributions.
Considerations of Federal Minimum Wage Regulation
Since the law’s passage concerning national issues, there has been indefinite improvement in the sector. The literature on wage regulations focuses on limited vital areas such as political ideology, small business influence, unionization, and the rights to work laws (Grabs et al. 1201). The indicated factors are some that may influence a congress or senator to vote for a boost in the minimum wage. Conservative philosophy, small business influence, and right-to-work regulation are some of the elements that may impact the congressman rejecting a minimum wage rise. Other attributes, including the number of women in employment, percentage of African Americans in the workforce, and percentage of teenagers in the force, have been indicated in literature to have an insignificant effect on minimum wage rates. The income variables are significant in this study as the income literature is inconsistent.
Some of the research conducted outlined that having a higher percentage of low-income families accelerated the likelihood of Congress polling in regard to minimum wage inflation. In contrast, others found that having a higher average hourly wage in manufacturing expounded the possibility of Congress voting in favor of a minimum wage increase (Hayati and Ananda 53). The fact that coefficients might be negative, positive, or insignificant indicates no consensus on how the variable impacts wages regulations.
Considerations of State Minimum Wage Regulations
There have only been three researchers developed on the factors that influence minimum salaries at the state level. Capitalist influence and total hourly compensation in manufacturing are substantial factors in establishing the state minimum wage rate. An increase in labor will boost the minimum wage rate, but a decrease in capital income will raise the expected minimum wage (Grabs et al. 1200). In addition to the American research, there are two research carried out on determinants of wages in the providence of Canada. In the nationality of Canada, it relies on the nine provincial governments to set their minimum wage regulations as it does not have a federal minimum wage (Divay 49). The influence on small businesses, teens in the labor force, and political control were negatively related to the minimum wage rates, and the union’s rates were insignificant.
Methodology
The article will attempt to ascertain the political impact on state and federal minimum wage regulations. A separate analysis will be conducted on both the federal and state. For the federal variation minimum wage, legislatures’ decision to change the minimum wages will be examined (Divay 52). The distinction is significant as the procedure of hiking the federal minimum wage is dissimilar to that of the state level. Separation of the analysis is effective as it will aid in concluding the dissimilarities in political and legislation systems at the statewide and federal levels.
Federal Minimum Wage Methodology
Acts of Congress determine the federal minimum wages. Congress has never cut the national rates due to the rise in living standards and inflation. Before being brought to the president for approval, the senate and house representatives should approve legislation in the states. It is unusual for the president to pass a regulation on the rise of the minimum wage, and of the times they bypass the rule, Congress overruled it (Grabs et al. 1196). As a result, we will examine the Congress and senator votes for this study’s purpose.
The independent variables to be discussed in this research are based on the congressman’s district and senator’s home state. Some of the variables to be looked at during the study include the unemployment rate, whether a state has enhanced a right-to-work regulation, the ratio of women in the workforce, the legislator party, the median household income, and the lawmaker political ideology. Hence the lack of data at the congressional level is due to some of the factors listed. The accumulation of data is costly and ineffective as congressional districts are configured each decade. If the congressional district data is unavailable, the state level will be implemented.
State Minimum Wage Methodology
The state governors and legislature determine the minimum wage rates at the state level. As the governors rarely practice their veto authority on minimum wage laws, the research will focus primarily on the roles of the legislatures (Divay 56). In this scenario, the dependent variables will differ slightly. If a minimum wage were raised in a given year, the dependent variable would be one; otherwise, it would be zero. The second dependent variable is to evolve using a categorization scale divided into four sections: lower than the federal rate, higher than the national rate, no minimum wage law, and equal to the federal rate. The third independent variable will compose the actual minimum wage rate within each state ( Kweon and Suzuki 268). It is significant to note that all states endorse their minimum wage regulations equally.
State-Level Results
The research carried out three types of panel data regression on the state-level data. Firstly it was through a random impact probity prototype with the dependent variable outlining if the state increased the minimum wage in that year. Secondly, an ordered probity prototype was classified on a scale of one to four based on minimum wage policy and random impacts regressions with the nominal minimum wage as the dependent variable (Kweon and Suzuki 254). The nominal wage variable outlined a ninety-six percent associated with the four-tier state classification as the type is based on a federal minimum wage rate. In the state-level research, none of the independent variables highly related to the prohibited analysis regulated the panel composition of the data (Divay 50). The results outlined that unionization rates, citizen ideology, and institution ideology significantly influenced whether a state minimum wage rate was inflated in a particular year.
House Vote Results
The finding analyzed that the political party of a senator or congressman and their ACU rating are ideally associated when comparing senate and house voting data. This is anticipated because the politics are developed based on the ACU rating and political philosophy assessing political ideology. Employment rates and good work status are closely connected in states with high unionization ratios; the connection is logical. Given the significant opposition of states with high unionization rates, right-to-work legislation will likely pass such legislation (Grabs et al. 1190). Hence the right to work is dropped in favor of the union variable; the results reveal an intriguing pattern. Every Democrat in the House of Representatives voted in favor of inflating the minimum wage rate. It outlines that if a senator is a democrat, their vote may be predicted based on their political influence. The study looks at what indicator can aid in predicting if a republican will vote for or against the minimum wage.
Conclusion
From this study, it is ideally visible how politics significantly influences the amount of minimum wage allocated to specific careers. It outlines the various steps and predictions of if the state or the Congress will vote in support or against a rise in the minimum wage. Ideally, this outlines that politics based on laws and regulations enacted can significantly impact specific career fields such as psychology. Depending on the polling, it influences the amount psychology will be paid for their services and their rate of income—multiple variables are vital in the various regressions which have been analyzed. The distinctions between the relapses do not outline whether essential variables are reliable or insufficient predictors. Instead, different figures will exert pressure on distinct governing bodies in the states. The analysis indicates that the judgments on whether to increase the minimum wage rely significantly on the political basis for minimum wage legislation.
Some variables, such as median family income and employment, have a limited effect on minimum wage increase. Political interpretations can expound on them in addition to their economic roots. Analyzing that minimum wage law alters economic equilibrium and influences significant economic variables such as profit margins and wage rates, surprisingly, economic indicators play an insignificant role in establishing the actual minimum wage rate. It can be instituted that political decisions are unilaterally dictating policy, damaging the economic equilibriums. Hence such a mechanism of the government regulating minimum wage rates should be subsidized.
Minimum wage rules in the United States appear to match better with the capture theory, which states that laws are enacted due to political goals and public pressure. In the United States, minimum wage legislation will be a heated topic in political circles. Although minimum salaries directly influence economic equilibriums but have no effect on political processes, this analysis finds that political reasons have taken precedence over financial considerations. As a result, it can be stated that occupation such as psychology, politics indirectly influence the wages paid.
Works Cited
Divay, Sophie. “The New Making of Nurse Executive Careers: Between Regulation and Cooptation.” Sciences Sociales ET Santé, vol 36, no. 1, 2018, pp. 39-64. PERSIE Program, Web.
Grabs, Janina et al. “Private Regulation, Public Policy, and the Perils of Adverse Ontological Selection.” Regulation &Amp; Governance, vol 15, no. 4, 2020, pp. 1183-1208. Wiley, Web.
Hayati, Melda, and Febryandhie Ananda. “The Effect Social Influence on the Interest in Implementation A Regional Financial Management Information System (SIPKD) In Padang City Government.” Basic and Applied Accounting Research Journal, vol 1, no. 1, 2021, pp. 38-45. Galaxy Science, Web.
Kweon, Yesola, and Kohei Suzuki. “How Partisan Politics Influence Government Policies in Response to Ageing Populations.” Policy &Amp; Politics, vol 50, no. 2, 2022, pp. 261-281. Bristol University Press, Web.