Everything in the world comes with its advantages and disadvantages. Minimum wage increase in one such example. There is always a debate going on about it. Some economist and business accept it while others reject it. No doubt, it has lots of benefits but also some drawbacks. Move ahead to read few of the Pros And Cons Of Minimum Wage Increase.
Following are the
Pros and Cons of Minimum Wage Increase.
Minimum wage increase pros:
- Two national economies are never the same. A stable foreign economy without minimum wage laws should not be used.
- Minimum wages help to control the inflation from rising at a faster rate.
- Under employment rate and worker, exploitation can be controlled through minimum wage increase.
- Consumer economics flourish through these wages. In short, more wages means more money to spend.
- Raising wages means that employers will get more money to spend which means more money will circulate in the system.
- Employees with minim wages are the person who needs to rely on secondary sources like social programs to meet their needs. With increases in the wages, they would be able to support their families in a better way. This will lower the taxes and relocation of those funds to support others who are needier.
- There are fewer chances of turnover. When the employees are happy and satisfied with their wages, they would continue with the job and as a result, there will be very less percentage of people who will quit their job.
- In general, it raises the quality of living of people.
Minimum wage increase cons:
- Businesses that outsource certain processes to developing nations are generally opposed to minimum wages as a matter of cost efficiency.
- Small scaled business cannot afford minimum wages. As a result, we see stagnant growth.
- Minimum wages cannot be the cure for poverty and unemployment. To cover the expense, most business men increase the prices of goods and services which they provide to the customers.
- Economist thinks that minimum wages are an obstacle in the way of establishing perfect wage system. The equilibrium rate can only be reached when the number of workers is equal to the job opportunities.
- It is a big reason for job opportunities. With minimum wage increase employees are spending more, employers are earning more and their need to hire more people increases due to increase in the sales.
- If the employers have a tight budget and the minimum wage is increased, it means he will have to pay the current employees more. Moreover, he would be unable to compensate new employees. This will raise the unemployment rate.
- Minimum wage increase will give rise to a fierce competition. More experienced people will qualify for the wages, leaving behind the newcomers. This may also cause a big turnover in the organization.
Apart from these pros and cons of minimum wage increase, we still see a contradictory view about minimum wage increase. It also depends upon the government and state laws. Let’s see what the future and trend of wages is in coming years.