About Minimum Wage

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According to analysts, raising the minimum wage

will result in a lack of jobs, higher food prices, and a decline in the value of degrees. The minimum wage was established primarily to ensure that the typical citizen could support their families and themselves with the least amount necessary to meet their necessities.

State Variations in Minimum Wage

Because each state has its own operating economic rules that force it to change its minimum pay level in proportion to its economy, the minimum wage is not the same in all 50 states. In most scenarios, the minimum wage is considered to be for those with lower education level and instead of increasing the minimum wage, it is argued that those who are interested in receiving higher pay should instead gain more education to be able to be employed in better-paying jobs.

Economists' Perspective

In economists perspective, increase in the minimum wage will automatically result in a need for the small businesses to pay its workers more money which to some extent many will be unable to afford with the only option being to releasing the employees from their payrolls making them jobless. It is stated by Bernstein (2015) that minimum wage increase will lead to pressure on the undeveloped businesses making them unable to pay their workers.

Layoffs and Quality of Production

In the event that the businesses will be unable to pay their workers, they will be forced to lay off even the loyal ones just to remain with the few individuals who the business can sustain. Laying off some workers will increase the workload on the managers and the few available staff which might lead to poor quality in production. According to Burkhauser, Richard and Joseph (2005) it does not matter the percentage of the minimum wage increment since even an increase with fifty cents is enough to render some individuals jobless.

Financial Stability and Education

Grundy, et al. postulates that minimum wage increase will not ensure the financial stability of many families and they are better off left in their state without the increase in the minimum wage. It is said that the minimum wage should only remain minimum with neither an increase nor a decrease on it and if it is increased, the population will majorly consist of uneducated people since nobody will strive to get a better education.

Devaluation of Education

Mincy (1990) contradicts the fallacy that increases in the minimum wage would significantly boost the lifestyle of the people with lower education level in the society, in reality, the author says that the contrary is true. Minimum wage increase leads to a devaluation of every person who calls themselves degree holders. This is because fewer people will be willing to go to school so that they can get jobs with higher pay in the future.

Salary Discrepancies

For instance, working in a museum with a stated minimum wage with the salaries paid according to one's level of education, an increase in the minimum wage can lead to the increase in the salary of the employee who was least paid to be equivalent to the wage of that employee ahead of him with education. This may be considered unfair especially to the fellows who work harder to attain higher education only to be paid the same amount with a colleague with even lower education level.

Inflation and Cost of Living

Leigh (2007) refutes the claim that minimum wage increment will result in the increase the purchasing power of the people. In contrary, it will be much harder for individuals to afford food. According to Bernstein (2015), commodity prices will hike due to the high production costs. In most cases, the manufacturers will find the best strategy to get back the money used to increase the wages of the workers to avoid running losses. The best option to tackle this problem is the increase in the prices of the commodities and services. This insinuates that the increment in the wage will still disappear in the increased prices of goods purchased by the consumer. With proper mathematics, this sums up to zero benefits of the increased minimum wage.

Inflation and the Economy

Inflation is automatic with the increase in the minimum wage. Mincy (1990) says that the increase in the minimum wage will result in the increase in the cost of factors of production and especially labor. The high cost of labor will result in the high prices of the commodities produced and with the increase in the prices; the inflation will have set into the economy. In essence, not raising the minimum wage will be an indicator that the economy of a country together with its citizen are better placed than causing a chain of reaction and changes that have more drawbacks than benefits. The main focus should be directed in the sharpening and shaping of personal skills to increase the capability of making more money as individual that in groups. Lowering the bar down t the less paid individuals is not the best strategy. Leigh (2007) believes that the increase in the minimum wage will lead to an increase in inflation, which makes more people fall into poverty.

Work cited

Bernstein, Joby, et al. "Raising the minimum wage." (2015).

Burkhauser, Richard V., and Joseph J. Sabia. "Raising the Minimum Wage." (2005).

Grundy, Lea, Kirsten Snow Spalding, and Bob Redlo. "Increasing the minimum wage."

Leigh, Andrew. "Does raising the minimum wage help the poor?." Economic Record 83.263 (2007): 432-445.

Mincy, Ronald B. "Raising the minimum wage: effects on family poverty." Monthly Lab. Rev. 113 (1990): 18.

February 14, 2023

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