Arguments on Minimum Wage

Introduction

There have been lots of arguments on the issue of the minimum wage and how it affects the lowest class of the society and the country at large. While some people see it as a necessity and as a tool that protects and bargains on behalf of the low class, others argue that it only creates more problems in the society. The argument that the minimum wage protects the minority or the poor has various criticisms against it. Likewise, the arguments that the minimum wage only perpetuates discrimination, injustice, and poverty on the poor is also criticized by advocators or those in support of the minimum wage. This paper aims to bring to focus two different arguments on the issue of the minimum wage and also provide criticisms for each argument.

Argument in favor of the Minimum Wage

The most common argument which supports the issue of the minimum wage is the belief that it protects those at the lowest class of people in the community. This way, it is also believed that a minimum wage increases the living standards of those regarded as the poorest and most vulnerable members in the community. Marginalized groups in the society such as women, minority groups, youth workers, people with disabilities among others, present as some of those workers in our society who require the policy of minimum wage. These groups of people do not have the bargaining power with which they can fight for fair wages (Blackburn, 2016). They therefore require the intervention of the government. According to this argument, the minimum wage is quite beneficial and essential for the lowest class of people in the community. This arguments has it that the minimum wage can help raise these people’s living standards and help eliminate poverty in the society (MaCurdy, 2015).

The minimum wage is necessary are presented by the above argument. It does not only protect those in the lowest socio-economic class in the community but also help raise their living standards. The argument goes as far as to mention that the minimum wage can at large, benefit the country and the government. Advocates for this idea say that a minimum wage which ensures that workers are paid fairly raises the workers’ living standards and when this happens, they get to spend more. This class of the society spends almost all they earn allowing more money to circulate in the economy. This is therefore good for the economy and the country in general (David et al., 2016). 

Criticisms

Critiques of the above argument have pointed out that the minimum wage does not protect the low-class workers, rather, it hurts them more. They say that the government should not impose the value of individual workers. The value of an employee should be decided openly in the market. Those of the lowest class of the society may end up unemployed due to an imposed minimum wage. An employer may choose not to employee more workers if the minimum wage exceeds his or her budget. Those young workers with no much experience would suffer the most as employers cannot risk starting them on high wages. Traditionally, a worker’s wage should grow gradually depending on his or her experience, skills, qualities and output. Therefore, according to the criticism, a minimum wage will only do more harm to minorities, vulnerable members and the general lowest socio-economic class of people in the society (Meer & West, 2015). 

Argument against the Minimum Wage

It has been argued that the minimum wage perpetuates discrimination, injustice, and poverty, all of which affect the lowest class in the society. The intentions of the government while imposing the minimum wage policy are quite clear. It is understandable that in creating a fair minimum wage, the government hopes to alleviate the living standards of the lowest socio-economic class in the American society. The outcomes of imposing a minimum wage in the society can be very undesirable. The low-income workers may be subjected to discrimination, injustice, and poverty. If for instance, a firm paid workers a wage of four dollars per hour and later a minimum wage of six dollars an hour is introduced, the firm has to do away with a few workers (Neumark et al., 2014). There are two scenarios which can be used to elaborate this argument. In the first scenario, all workers have the same productivity, and in the second scenario, the workers differ in productivity.

In the first case of workers with the same productivity, the employer will lay off a given number of employees based on personal preferences, their sex, race, physical appearance, attitudes and mode of dressing. It is quite bad when employees are sacked due to traits out of their control such as their sex and race. This is both unfair and discriminative as asserted by Seekings and Nattrass (2015). The minimum wage can, therefore, perpetuate institutional discrimination. The workers who no longer have jobs may be subjected to even worse conditions of living or even poverty. In the second scenario, the employer would automatically lay off those workers with the lowest productivity. Even if this may seem fair, the reasons behind the low productivity could be those beyond an individual’s control such sociocultural conditions, upbringing, education or institutional discrimination. The minimum wage, therefore, punishes people with low productivity. It also works to promote low living conditions and poverty for those poor employees with low productivity. Even then, it is still possible to lay off those workers with good or higher productivity due to other factors such as sexism and racism. In general, the argument has it that the minimum wage perpetuates injustice and discrimination against low-income workers and also works to promote poverty and lower living standards for the low-income workers (Allegretto et al., 2017).

Criticisms

Advocates for the minimum wage say that such an argument is only meant to back up or work in favor of firms which do not like the idea of the minimum wage. The argument is further criticized on many other fronts. While the argument says that a minimum wage perpetuates injustice and discrimination, critiques say that there are laws which protect workers on such issues (Collins, 2017). Workers who face various forms of injustices and discrimination at workplaces are always free to report such cases. No worker should, in fact, get fired on the basis of sex or race. Critiques and advocate for the minimum wage also say that the minimum is quite low and that no firm can actually suffer due the minimum wage being imposed on it. 

Conclusion

The minimum wage, as seen above, has its supporters as well as those who do not support it at all. Those who support the minimum wage see it as a necessity which does not only protect the minorities, the poor or the vulnerable members of the society but also works to raise their living standards. The minimum wage, help this group of the society to bargain for fair pay. Critiques against this argument, however, point out that the minimum wage does not protect but hurt the lowest class even more. Those who do not support the minimum wage policy say that it perpetuates injustice, poverty, and discrimination. Critiques against this argument, on the other hand, say that such arguments are nothing more than excuses for corporations which do not like the idea of the minimum wage. 

References

Allegretto, S., Dube, A., Reich, M., & Zipperer, B. (2017). Credible research designs for minimum wage studies: A response to Neumark, Salas, and Wascher. ILR Review , 70 (3), 559-592.

Blackburn, S. (2016). A Fair Day’s Wage for a Fair Day’s Work?: Sweated Labour and the Origins of Minimum Wage Legislation in Britain . Routledge.

Collins, C. (2017). Raising the Minimum Wage: An Economic Gain. The Park Place Economist , 25 (1), 20.

David, H., Manning, A., & Smith, C. L. (2016). The contribution of the minimum wage to US wage inequality over three decades: a reassessment. American Economic Journal: Applied Economics , 8 (1), 58-99.

MaCurdy, T. (2015). How effective is the minimum wage at supporting the poor?. Journal of Political Economy , 123 (2), 497-545.

Meer, J., & West, J. (2015). Effects of the minimum wage on employment dynamics. Journal of Human Resources .

Neumark, D., Salas, J. I., & Wascher, W. (2014). Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?. ILR Review , 67 (3_suppl), 608-648.

Seekings, J., & Nattrass, N. (2015). What is at issue on the minimum wage debate? Cape Town: Development Policy Research Unit, University of Cape Town .