Introduction
Minimum wage/pay refers to the least amount of remuneration that an employer can pay his or her employee or worker. Minimum wage is very significant in any economy and plays a role in balancing it. There are lots of discussions about the issue of the amount minimum wage being of important or not, based on the impact it has on any economy. This paper strives to find out if increasing the minimum wage will be beneficial or not. The increment of the minimum wage would have been found to be beneficial; then this paper will suggest that minimum wage should be increased. Minimum wages are powerful tools which are important and significant in setting the standard of work goals and working conditions of employees. Without the minimum wage, some employers would heartlessly exploit workers with unreasonably low wages which do not resonate with the amount of labor offered. Therefore, the presence of a minimum wage serves to protect the rights of employees to a reasonable wage. Minimum wages are also crucial in strengthening the floors of social protection and helping alleviate poverty. When the lowest of the workers are paid a minimum wage that will enable them to afford basic living standards, they can take part in buying and selling and thus boosting the economy. Without the minimum wage in play, most employees or workers would not be able to afford some basic things like food. That would consequently increase the level and rate of poverty in the society.
Background
Minimum wage increment has both positive and negative impacts. One can stand in the position that increasing minimum wage is beneficial to the economy in the sense that it increases the rate of buying and selling and boosting livelihoods. Another reason that would be given is that increased minimum wage will also lead to employee motivation. When the workers are paid well, they get the motivation of working better and becoming more productive. It that sense, corruption cases will be greatly reduced, and the work output will be better. That is however not always true because many other factors influence employee performance in any jurisdiction of work. On the other hand, another person can decide that increasing the minimum wage of any economy will be destructive to any economy than it would be constructive. The reason for that would be because employers will have to bear the burden of shouldering increased expenses as a result of an increased budget for wages. In the process that may lead to retrenchments and other measures to counter the increased wages and that will be hurting to the employee.
Delegate your assignment to our experts and they will do the rest.
Therefore finding the balance is quite a task and would need several factors to be considered. This argument does not support the increment in the minimum wage because of the state that the world economy is currently at. If the interests of employees are put before those of employers, then the economy will suffer more. This is because, although the employees make up the larger majority of people buying from the stores, shops, and malls and in the process propelling the economy forward, employers give them the power to do so. If only a balanced point is reached such that both the employers and employees are winners, then the increment in the minimum wage will be more beneficial than it would have been not beneficial. In most cases, increases the minimum wage would cause the economy to hurt.
Reason/Evidence
Bauducco & Janiak (2018) is concerned with the presentation of information regarding the various macroeconomic consequences of increasing the minimum wage with a specific focus on the state of the economy in several European countries. In examining the quantitative impacts of increasing the minimum wage, this source looks at different aspects of the macro-economy which include employment, distribution of wages as well as the stock of capital among others. In this source, the authors present analyze and explore the outcomes of increasing the minimum wage by coming up with a modeling framework that allows for the searching and presentation of information regarding comparative analysis of different large firms. Furthermore, this article examines the existing comparative statistics about empirical findings that have been made in the recent past regarding the moderate increase in minimum wage as compared to the levels of employment. This source is relevant in exploring the argument of whether minimum wage would be increased since it presents theoretical information about the prediction of the future behaviors of different aspects of the macro-economy upon increasing the minimum wage. This article, therefore, presents a red light to the idea of increasing the minimum wage by purporting that the move affects the macro-economy directly. The author also presents the need for careful broader examination of the effects of minimum wage bill increment.
To try and understand the effects of increasing minimum wage in an economy in relating to employment, it is important to examine the works of Reich, Jacobs & Bernhardt (2014). This article highlights some of the employment outcomes associated with minimum wage changes on a temporary basis with the American community in the recent past. Furthermore, the authors of this sources attempt to highlight different economic policies that appear to have influenced changes regarding the minimum wage in the recent past. To that extent, the authors are keen on presenting information about the existing link between changes in minimum wage introduced by the state and provision of inflation indexation.
Furthermore, the authors of this report pay a considerable level of attention in highlighting some of the new research and findings made in the areas of the minimum wage over the last couple of the years. This source is relevant to in informing different arguments about the result of minimum wage increment since it presents a different perspective which has not been explored by other sources. This different perspective is that of effects on the implementation and operation of various economic policies introduced by the government. The introduction of changes in a country’s minimum wage bill is very significant given that it affects the inflation rate. In essence, when a country increases the minimum way to the point of hurting employers, employers will retaliate. The retaliation process will lead to ultimate hurting and consequences directly on consumers. Most will be retrenched thus also affecting the economy in a large way. Apart from that, increasing the minimum wage will also increase inflation. That is, when more people suddenly have higher incomes that are not reciprocal to the capacity and structure of the economy, there will be less incentive for businesses and working harder. In the process, the economy will suffer from inflation.
Conclusion
An increment of the minimum wage is undeniably negative to the growth of any economy and it through the exploration of different ways in which an economy can be affected there is a clear demonstration that a minimum wage bill increment causes more damage than benefits when looked at, in a macro-level point of view. To understand better, Mărginean & Chenic (2013) explore various outcomes and effects associated with the idea of increasing the minimum wage for workers from a theoretical as well as a practical perspective. Also, the source gives information regarding an evidenced-based evaluation and discussion of the present as well as future challenges that are likely to arise from increasing the minimum wage.
Considering that the issue of wage plays a critical role in analyzing and understanding a significant number of aspects in a given economy, this source focuses on examining various important factors and issues that are likely to determine the growth in the minimum pay. This source is relevant in exploring the argument regarding the idea of raising the minimum wage since it presents the reader with adequate literature and explanations concerning some of the recent developments in the United States as well as several countries in the European Union that have attempted to raise the minimum pay. The relevance of the source in discussing the issue of increasing the minimum pay is in its broader and in-depth coverage of the possible effects of the evolution associated with raising the minimum wage. Owing to the above, it is safe to purport that the minimum wage bill of any economy should not be raised. That, of course, does not mean that the minimum wage bill of any country should be static but means that utmost caution should be applied on the same.
References
Bauducco, S., &Janiak, A. (2018). The macroeconomic consequences of raising the minimum wage: Capital accumulation, employment, and the wage distribution. European Economic Review, 101, 57-76. Retrieved from: http://dx.doi.org/10.1016/j.euroecorev.2017.09.012
Mărginean, S., &Chenic, A. (2013). Effects of Raising Minimum Wage: Theory, Evidence, and Future Challenges. Procedia Economics And Finance, 6, 96-102.
Retrieved from: http://dx.doi.org/10.1016/s2212-5671(13)00119-6
Reich, M., Jacobs., K & Bernhardt, A. (2014). Local Minimum Wage Laws: Impacts on Workers, Families, and Businesses: Report prepared for the Seattle Income Inequality Advisory Committee. Retrieved from http://murray.seattle.gov/wp-content/uploads/2014/03/UC-Berkeley-IIAC-Report-3-20-2014.pdf
