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The Potential Effects of Minimum Wage Changes on Naval Accessions

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Technical Report

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Naval Postgraduate School Monterey United States

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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 militarys 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 markets 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.

Subject Categories:

  • Economics and Cost Analysis
  • Military Forces and Organizations

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