The minimum wage is the least amount of salary or remuneration that employers need to pay their employees for the work done within a given period. The minimum wage can no longer be further reduced through either a collective bargaining agreement or a personal contract. Raising the minimum wage can play a fundamental role in stimulating the overall consumer expenditure, help companies and businesses grow, and generally improve the economic sector. The opponents of raising the minimum wage argue that increasing wages could cause inevitable economic repercussions such as inflation in prices, reduced market competition, and job loss. On the other hand, proponents argue that more factors need some considerations to allow incomes to be on par with the continually increasing costs of living and that a higher minimum wage would adequately address this problem. I partially disagree with the opponents' arguments and fully concur with the proponents' idea for various reasons. During hard times, increasing the minimum wage has significant benefits to both the employees and companies
Increasing the minimum wage can significantly improve the living standards of employees who are low-income earners. The increased minimum wage also places low-income workers at the best income level of managing problems related to increased living costs. Many proponents have estimated that raising the minimum wage can help move a significant number of low income earning families out of the poverty adversities. Furthermore, an increase in the minimum wage significantly helps build and improve a company's workforce morale. Improved workforce morale implies that the likelihood of increased productivity is very high. In nations dominated by informal employment, the rise in minimum wage contributes to an increase in informal employment. In this case, the workers who lost their jobs get job opportunities, hence improving the informal sector.
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Research has shown that raising the minimum wages minimizes the expenses caused by employee turnover hence increasing the overall company's productivity. In a scenario where the government increases the minimum wage, the employers can confidently be happy about paying the high wages without falling into the trap of any competitive disadvantage. Furthermore, raising wages helps companies be more efficient in their operations instead of firing or suspending a section of its working force. According to a report by the National Employment Law Project of 2012, about two-thirds of low-income earners work under vast companies where most of their bosses incur huge profits and pay their employees higher wages. In companies, raising the minimum wage significantly reduces the rate of employee absenteeism.
When workers are paid more, their absenteeism is likely to be less, thereby increasing a company's output. Research by economists Laura Bucilia and Curtis Simon indicated an increase in the minimum wages directly associated with reduced absenteeism cases at workplaces for other reasons apart from illnesses. A rise in the minimum wage also helps companies and other businesses to establish an incentive that can enable them to invest in the various aspects of production, such as the automation sector and labor productivity. Such investments play a significant role in boosting the general company's input into the economy and equips the companies with the power to afford to implement the wage rise. Also, it changes how the economy operates by making it less labor-intensive. An increase in the minimum wage also reduces the business working hours as companies strive to gain more significant returns from their efforts. Lastly, substantial income gains to both the company and low skilled workers during peaks may be an achievement instead of the troughs during the trade cycles.
