Minimum Wages Do Not Help

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Minimum wage is the minimum amount of money that a worker should be paid according to given labor laws. These laws define the floor to which workers through collective agreements should be compensated, with prohibition to any reduction but subject to increase. The minimum law is an Act of the Fair Labor Standards Act under the federal minimum wage laws meant to help workers by raising wages and shielding them from employer exploitations (Lee & Saez, 2012). In response to the continued debate concerning whether the laws and proposals have succeeded in helping workers, the paper will analyze the benefits of the laws in relation to workers’ economic well-being.

Minimum wages do not help any concern parties in any way, as they present various negative effects. The setting of minimum wage was meant to make it possible for workers to earn wages that are consistent with the economic living standards and cost of living and accounting for the effects of inflation (Zatz, 2009). However, the regulations have not been effective because they have been raised utmost 3 times in the past three decades, while inflation rises every year. In addition to that, there are numerous unintended consequences of the minimum wages especially when they are raised (Lee & Saez, 2012). When minimum wages are raised, employers face a tight compensation budget because it is expensive to compensate same numbers of employees at higher rates, which eventually leads to layoffs, hence many workers will remain unemployed.

Minimum wage will also affect businesses and employers and employees on equal terms because as a result, the required number of workers will decrease. This means that there is fewer hirings or even hiring from other countries that are willing to work for less (Kaufman, 2010). The regulations will also increase competition because very qualified individuals will be considered therefore leaving out on majority of workers. The laws also present inconsistencies that arise from the varying State to State rates, which creates variances and unnecessary competition between States and between employers.

The minimum wages are not helpful to the poor because of the price increase. As wage rates rise, employers are forced to raise prices of basic products in order to produce enough income to support the high minimum wages (Kaufman, 2010). This could also create a ripple effect to other industries forcing them to also increase prices due to higher cost of living, hence pushing for another raise in minimum wage creating a vicious circle. This means that the minimum wage rates are not effectively helping workers because economically, it pushes prices and the general cost of living higher demanding for more wage increase.

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Minimum Wages Do Not Help. (2021, Mar 10). Retrieved from https://samploon.com/minimum-wages-do-not-help/

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