In an ideal world, the rise in the cost of living and products would increase wages. However, the reality is that for most employers and business owners, profitability takes precedence over employee concerns, including payable wages. This has necessitated increased worries over whether the minimum wage should correspond to existing living situations.
The Reasons Why the Minimum Wage Should be Increased
The minimum wage should be raised to motivate employees to work harder and do better. Numerous studies have indicated that proper compensation is one of the best ways of motivating employees to do better at the workplace. For instance, you would concentrate better on your work if you spent less time worrying about feeding yourself or paying your bills. Nobody wants to work where they are poorly paid and underappreciated. Having good pay is one of the best ways of showing appreciation for your employees, and when employees are better appreciated, they are more motivated and perform better. Besides, a high turnover rate poses a high monetary and productivity cost for any company, which could be saved by merely paying employees well. Many companies already spend significantly on employee motivation programs, a price which would be avoided if they paid their employees better. This is one of the most fundamental reasons why the minimum wage should be increased.
The minimum wage should be increased because it is ethically and morally right to do so. Nobody should be forced to need to work two or more jobs to survive or yet have to live in debilitating situations (like being homeless) despite being employed. It is simply not right, nor fair. Good labor conditions (including wages) are a fundamental human right. Bearing this in mind, the minimum wage should commensurate to the existing living conditions and help workers fulfill their basic needs comfortably.
Besides, raising the minimum wage facilitates the growth of the economy. When the minimum wage is low, it reduces the amount of income available to spend on non-essentials, which is the money that keeps the economy growing. Therefore, reducing the minimum wage may spur a recession due to people spending less. For instance, if you are a car manufacturer but pay your employees so little that they cannot afford to buy your cars, you lose out on potential customers who would have grown your business. Specific industries are built on providing luxurious products and services; these industries would die if people do not have disposable income to spend. The service industry has employed a significant part of the population, consequently contributing to the economy's growth. Therefore, raising the minimum wage is critical to the development of the economy.
Increasing the minimum wage would remove a more significant number of people from poverty. Presently, many people are poor because they have jobs that do not pay them a livable wage. The situation is more aggravated for people with dependents ( like the children and elderly) in society. Many individuals and families would get out of poverty if they earned more money to support themselves. This would reduce the number of impoverished people, like beggars in the streets.
Increasing the minimum wage would also decrease the need for expenditure on financial aid programs for lower-income families. There are currently many federal and non-profit financial aid programs for poor people. However, the situation would be different if people were remunerated better and could afford many social necessities like good healthcare. This would mean more federal income is spent on programs that matter, like proper infrastructure.
The minimum wage should be increased because many other countries already have a high minimum wage. Workers' rights have become an increasingly significant concern for employees, developmental organizations, and governments alike. Countries like Luxembourg and France have the highest rates of minimum wages globally. The minimum wage should be increased locally to correspond to globally competitive rates. Otherwise, there is an excellent risk that more and more professionals could emigrate to countries where they are better paid for their skills and expertise. Brain drain could significantly impede the growth of the economy.
Why does the Minimum Wage Matter?
The issue of the minimum wage is intertwined with economics and development. However, for some people, the minimum wage concept does not matter because of the claims that economics and the free flow of trade would balance everything. For others, it matters because it affects their income status and daily lives. Nonetheless, here are some of the reasons why the minimum wage issues of issue:
The minimum wage can stimulate the automation of jobs. If the minimum wage pushes the cost of paying a person to be significantly more than the price of automating it, more employers will start automating jobs. This could eventually result in the loss of jobs in the first place. For instance, there is an increasing debate on developing self-driving cars, eradicating the drivers' needs, and employment loss. Therefore, in addressing minimum wage, special consideration should be dedicated to the automation aspect.
Besides, suppose the minimum wage requirement forces the business owner to raise the prices significantly high enough to drive customers away. In that case, the business will close down, and employees will lose their jobs. Paying employees is just one of the costs which companies have to consider. There are utility bills, taxes, and licenses, cost of production, among many other expenses. For some businesses and employers, raising the minimum wage price would threaten their enterprises' survival. For others, deciding to pass on the extra cost to consumers could drive customers away, resulting in business loss. So, the issue of raising the minimum wages is not as simple as it looks. Unless there are a government incentive and support for businesses, many businesses may struggle by increasing it.
Alternatively, for some businesses, increasing the minimum wage would reduce the number of employees hired. As opposed to decreasing profits, some employers and companies may opt to reduce the number of employees required to increase their minimum wages. This would result in the loss of jobs for many. The competition to get jobs would also increase significantly, raising the standard requirements needed to secure and maintain employment. In this regard, creating a useful safety net is necessary for both businesses and employees before the final decision on increasing the minimum wage is introduced. Besides, if the labor market experiences an increase and the customers accept and absorb the cost, then employee jobs would be retained.
Besides, suppose a worker's wages are low below a certain threshold. In that case, they are liable to receive certain government benefits to supplement their income, like subsidized housing, free school lunches, or Medicaid benefits. Moreover, many charities and non-profit organizations were explicitly created to help lower-income earners through programs like food drives, free clothing, scholarships for needy students, and other benefits. However, when the minimum wage is increased, these programs would be significantly reduced or eliminated, essentially negating the increase.
Moreover, enacting the minimum wage requirement may force companies and businesses to move overseas, where labor costs are significantly cheaper. Many companies are already moving overseas, where their production and labor costs are considerably less expensive. By increasing the minimum wage, more businesses would relocate, resulting in the loss of jobs, and in many instances, causing a significant dent in the economy. Alternatively, many companies may hire immigrants who are maybe more vulnerable and accepting of lesser pay.
Besides, opponents against the minimum wage requirement argue that if a job experiences a labor shortage, the owner would automatically increase the minimum wage anyway. Therefore, the labor forces would automatically correct any deficiencies and imbalances in the labor market. Alternatively, if the labor market experiences a labor surplus, employee wages would automatically drop.
Some people also argue that people should learn and improve their skill levels rather than advocating for the rise of the minimum wage. Indeed, learning new skills could guarantee one more income, especially if the gifts are competitive. If you are working a minimum wage job, you could begin by advancing your skills in that line of work, which would result in promotion and raised income standards. You could even take a certification or study an online course to improve yourself.
The issue of minimum wage requirements is also still controversial as it is mostly restricted to lower-income labor. Many minimum wage jobs are designed for the lower level of workers who typically revolve around high school and college students. The same could not apply to older working professionals. Besides, the minimum wage data is still messy, making it difficult to understand the full impact of increasing minimum wages holistically.
Besides, many politicians and activists have politicized the minimum wage requirement without fully understanding the ramifications and benefits. Many have pointed out that it is a feel-good law. The minimum wage could be raised; however, the law of supply and demand would negate most of the actions anyway. However, there is hope that over time, the minimum wage would be increased.