The debate on the minimum wage has been ongoing for sometimes with different studies showing the effect of raising the minimum wage. Different viewpoints have emerged concerning the effect of minimum wage on individuals, families, businesses and the entire society. Proponents of minimum wage argue that minimum wage will enhance the living standards of the poor and low-income families leading to reduced poverty levels not only at the household level but in the entire society. The minimum wage can be effective against poverty as well as inequality by helping the lowly paid. The minimum wage, for example, affects the workers who earn less than or close to the minimum. Its effects will, therefore, be felt by the low-income earners and the rest of the employees will be unaffected.
Arguments for and against minimum wage are valid and have been studied extensively. However, the available literature on the issue gives opposing viewpoints concerning the effect of the minimum wage. Similarly, the introduction of minimum wage laws in some countries like Germany did not have the anticipated effect of unemployment. Similarly, different countries implemented minimum wage laws since the economic downtown and no significant negative effects were reported. This post, therefore, supports the argument for minimum wage. However, such increase should not exceed $10.90 which is the equivalent of the minimum wage of $2 per hour paid in 1968 considering that inflation has eroded the buying power of the low wage earners.
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Classmate response
Your views concerning the minimum wage and its effect are highly appreciated. However, arguments that minimum wage will lead to inflation have raised mixed findings from studies conducted in the developing and developed countries. Similarly, the effects on social class system depend on the extent of the increase in minimum wage. It is also incorrect to assume that certification will lead to the watering down of the quality of education given that there are bodies established to ensure that a high level of educational standards is maintained throughout the country. Your conclusion on the effect of minimum wage on the economy has significant flows given that some countries like Germany reported economic growth contrary to the expectations of many.
Your argument on inflation and taxation is highly appreciated. It is true that taxation will reduce the benefits accrued from an increase in the minimum wage. Similarly, inflation will also reduce the actual income held by an employee. However, inflation and taxation will not erode all the benefits gained from an increase in the minimum wage. The employee will, therefore, be better off with an increase in the minimum wage. Lastly, the minimum wage will also open opportunities for employers to use modern technology which can be cheaper and more effective.
