MINIMUM WAGE

The Benefits of Lower Minimum Wage



The Benefits of Lower Minimum Wage

Introduction

Minimum wage is a way of enhancing and improving the incomes of a worker who are below the poverty line. There are two argumentative groups of minimum wage; first group describes the minimum wage, as an approach of enhancing the incomes of workers who are below the poverty line, and the second group, explains it as a tool which result to be opposed to the people by reducing workers well-being (Boushey, 2001).

The basic aim of the minimum wage was to provide, and uplift the take-home pay of a low-wage labor, through stopping the market influential's from pouring down the wages of the least education, and skilled workers in the labor force. If the minimum wage would rise, it will undoubtedly help lifting some of the working families who are above the poverty line, but it eventually unsuccessful to remain in a track with price increases and the increase in the cost of living (Boushey, 2001) (Boushey, 2001).

Argument statement and evidence

Lowering the minimum wage is more in support by the group of people than raising it because it is more of a fact that key industries covered or uncovered hurts badly in terms of getting financial crises. They either shut down or move to other location where they could find cheap labor. This paradigm shifts moves to a result where the unemployment rate increases eventually. It has been emphasize the efficiency losses of the minimum wage that can result in unemployment and other adverse effects. Minimum wage regulations distort the labor market, creating negative effects on the economy. The evidence supports this notion that occurred to American Samoa and the Commonwealth of the Northern Mariana Islands. In 2007, the United States enacted a law to gradually raise the minimum wages of both territories until they equal the US minimum wage. The result concluded in this regard lead towards shutting down of tuna cannery in and emphasized a garment factory CNML to shift its location (GAO Report, 2011) (Forth, 2003).

It is also possible that the minimum wage provide high wages to the low-skilled workers. It is an unemployment effect that also results to receive zilch salaries by other workers. Adding to the fact that, if the minimum wages are lower for younger employees, organizations tend to hire those low-skilled young workers to switch with high waged high skilled workers. This will decrease school enrollment and disrupt overall income distribution without changing the employment level (Forth, 2003) (Forth, 2003).

It is supposed that minimum wages decrease the element of total and partial poverty; both cases are different from each other. There are advantages also attached to it that refers to with the job performance, accuracy and transparency. In short-term, it might burden the employer, as the cost of them employee has increased, but in the long-run the high-minimum wage would rather disapprove additional job expansions and could lead towards unemployment.

The relevancy of targeting minimum wages for truly poor workers households ...