The potential effects of minimum wage changes on naval accessions

Abstract

In 2014 and 2015, U.S. policymakers debated the potential economic impacts of raising the federal minimum wage to $15 an hour. Proponents for an increase in the minimum wage argue that it will help the economy since more people will have the ability to purchase more goods. Opponents believe that an increase in the minimum wage will reduce the number of jobs and increase the price of goods. This MBA report demonstrates that raising the minimum wage could have a positive effect on the military's ability to recruit personnel because an increased minimum wage will increase the number of prospective recruits. This report examines how the minimum wage originated from the Federal Labor Standards Act of 1938 and morphed into what it is today. Then it examines how a price floor affects the market's demand for labor and utilizes the two-sector and search models to demonstrate how the minimum wage market correlates to military ascensions. Finally, the report examines studies that show the different effects raising the minimum wage can have on the labor pool and how this can impact military personnel acquisitions.