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Minimum wage laws have always had a high price to pay. Essentially, there are a number of costs associated with governments implementing minimum wages on an otherwise free labor market. First, there is the issue of reconciling increased labor costs with static production profits. According to the research, "Minimum wage increases make unskilled workers more expensive relative to all other factors of production," (Gorman 2008). The increase in wages can have the negative ramification of costing more to businesses. Unfortunately, the minimum wage law often creates situations where there are less employment opportunities for the lowest socio-economic classes of mostly unskilled workers. Here, the research suggests that "Employers typically are not willing to pay a worker more than the value of the additional product that he produces," (Gorman 2008). When products cost less to make than an hourly minimum wage, this creates a situation where employers do not want...
Research over several decades has shown that increases in the minimum wage has decreased employment in low-skill labor markets by 1-2% (Gorman 2008) Additionally, when minimum wages increase, they can threaten workers' benefits packages (Gorman). In an age where private healthcare is simply unaffordable for most Americans, low skilled workers depend on their fringe benefits, like insurance and subsidized childcare. Yet, minimum wage laws tend to threaten those benefits. In this regard, many economists believe that minimum wage laws actually do little to rid the nation of the poverty it is plagued by.
However, there are still a number of benefits which makes minimum wage laws practical in an otherwise troubled society, plagued with rampant poverty due to excessive implementation of extreme forms of capitalism. Even though minimum wage laws will always have…
References
Gorman, Linda. (2008). Minimum wages. The Concise Encyclopedia of Economics. Library of Economics. Web. http://www.econlib.org/library/Enc/MinimumWages.html
myIndependent. (2004). The undisputed benefits of a minimum wage. The Independent. Web. http://www.independent.co.uk/opinion/leading-articles/the-undisputed-benefits-of-a-minimum-wage-549600.html
Minimum Wage Even though minimum wage has been around for many years, and was established to make sure that working people could survive and pay their bills, there are still many problems with it. This paper address both the pros and cons to raising the minimum wage, discussing not only how people can be helped by the increase in pay, but also how they are ultimately hurt by it to a
Beginning wage increases in industry sectors and on a smaller scale in businesses and organizations can have a beneficial effect on various parties. Businesses believe minimum wage increases may hurt them regarding profit, local economy, and potential health effects. While assumptions exist regarding these key issues, research suggests wage increases provide upticks in profit for companies, promote a positive work environment and less stress for employees, and there is minimal
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