Pros and Cons of Minimum Wage

The argument for minimum wage has remained remake consistent over the years. Some people are against minimum wage and the other think minimum wage can help you in a certain way. In the midst of the Great Depression, the Unites States federal government passed the Fair Labor Standards Act. The law has been amended almost every year to expand coverage of the wage floor and to increase the wage itself. Many of the fifty states have enacted their own minimum wage laws, some of them set even higher than the federal level.

Minimum wage jobs don’t only help adults at hard times it help teenagers and college students. I learned that the proponents for minimum wage believe the raw value of one’s labor to a business shouldn’t be the primary factor in determining that workers wage. They consider a wage to be something not only owed to someone on the basis of their labor value, but also in light of their needs. In the labor pool there are people who are new to the market, young and unskilled. In order for their jobs to have significant consequence for them those jobs need to pay an amount that matters to them.

Employees earning low wage are likely to apply for and receive welfare benefits there by increasing the cost society must pay in order to keep them afloat. Therefore we should consider high minimum wage as an important part of a comprehensive government assistance package. On the other hand the standard free market economic complaint that minimum wage causes unemployment and has become a significant attack in the last decade. The basic practical argument against minimum wages is that they don’t accomplish what they set out to do and actually crate more problems than they set out to solve.

Minimum wage laws causes unemployment a lifelong depressing effect on the earning of many of those forced into unemployment and harm in particular the least-skilled most disadvantaged members of society. There is evidence that the very people targeted with these laws are likely to benefit from them. Since there is a given amount of labor willing to do work at the certain wage and there is a given amount of work employers are willing to hire people to do at the certain wage, involuntarily forcing the law end of those wages up will disemploy some workers.

It was mentioned the standard capitalist argument against a minimum wage has come under empirical attack lately and it must be said there is no consensus on the matter. The law of minimum wage interferes with the law of comparative advantage and monopolizes the affected labor markets in favor of the higher-skilled laborers whose labor is worth the higher wage. Some argue that the effect that the minimum wage is merely a huge, hidden tax paid by small minority. On other hand employers chose other methods than simple layoffs to offset the added cost of more expensive workforce.

The theoretically include hiring fewer employees in the future not replacing all employees who resign, retire or are fired not making capital expenditures to improve their business raising price on the goods and services they offer and decreasing the number of hours worked per employee. The moral argument against minimum wage is based on the ideas of self-ownership and freedom, grounded in the ethical concrete of self-interest. One of the most interesting things I discovered while researching this topic was the historical nature of the argument.

Some empirical studies appear to lend weight to the claim that these laws don’t cause unemployment, but they aren’t comprehensive enough to fully gauge the extent of the negative economic effects of such mandates. It cannot escape that the government causes unnecessary economic negative side effects by outlawing wages below a certain level. It easy to give in to the emotional argument proposing any variation on the minimum wage, but if it was up to me I will keep the minimum wage jobs for teenagers, college students , interns and part-time workers.