This essay consists of the valuable information related to the Minimum wages and several areas related to this topic are covered. This essay contains the information that does increasing wages help to reduce the poverty, how these wages law hurt America as well as consequences of $15 minimum wage.
Minimum wage is known as government fixed such amount for the workers on hourly basis that employer should have to pay that amount to the employee regardless of considering the workers qualification, capability. It is the hot topic that increasing the minimum wage would help in alleviate poverty or not. Minimum wages can help in reducing poverty, but it is not used in an effective manner. In under developing or developing countries, the wages can apply to the minority of poor employees only. Most of the time it does not apply on the workers who are self-employed nor in the informal sector where there is large number of poor workers.
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They commonly earn below the legal minimum wage. When there is rise in the minimum wage, it may affect the formal sector that they stop hiring new workers because of the rise in wage (Badger). If they did not hire those people who belongs to the poor households and do not give the job opportunities there must be significant increase in the poverty. It does not help to reduce poverty; however, the labor supply incentives have been playing a significant role to reduce poverty in US and also improve the heath an education of the lower income families in the long run.
American government can implement the wage policy of $15 on hourly basis for the employees, but it cannot order or force companies to hire the employees too. When there is increase in minimum wages, cashiers are wiped out from the drug stores as well as restaurant have taken the place of food trucks (Atkinson, 303). The laws of increasing wages have hurt the Americans because when there is a rise in wages, people take interest in doing most of the thing automatically and they reduced the work force by firing them or o not hire new people in order to save money. When the wages rose from $7.25 to $15, the organizations taken the step to firing the people who have least skills. (Glider, 447) Organizations do not hire fresh people in order to save the extra training cost.
In this fastest growing economy world, where there is experienced and well-trained employees. America hurt itself by saving the money of training cost and keeping the fresh and young people unskilled. David Nuemark, (The professor in University of California), given the strongest evidence that unemployment increases when there is increase in minimum wages. In his study he explained that if the wages increase the firms will not hire the people who have low skills nor teenagers without any regard to an industry (Edelman).
The higher minimum wage laws are responsible to increase the poverty in New York and California, because the job opportunities will ruin if there is an increase in wages. Firms will hire only those who are capable of working more efficiently and who are worthy of taking $15 per hour. The labor with $8.50 per hour skills will remained unemployed and it will hurt the economy too (O’Neill, 71).
On the other hand, the supporters of increase in minimum wages argue that government can increase the wages without pushing the labor cost high enough that will result in stop hiring new people it will increase the companys profit and people will get money as well as they will spent in order to fulfill their needs it will increase economic activity of country.
Another consequence that should be ruminated over is either the employs will comply with this or not. Will they avoid higher labor cost or if workers will be replaced by machines. According to sensory experience, the capital labor substitution will not work (Franklin, 757). Preliminary research suggest that higher level of routine manual work is improbable to be substituted by technology in response to low wage hikes. This suggests that before the labors are replaced by technology, the workers will first consider to some other way to adjust to $15 wage. The firms, there are many other ways to adjust this minimum $15 wage, but it sounds unlikely that employers will seek the workers with robots.
Entry level, minimum wage jobs are meant to be the first step towards the career. Minimum $15 wage will be the best for workers economically but on the other hand people who are in search of a good jobs will remain blank handed and it will be difficult for them to start their career.
To conclude, a few studies are in favor to increase the wages, rest of the studies prove that increasing wages results in increasing poverty too, because if there is an increase in poverty, firms do not hire new people to save money as well as training cost. They could also go for automation rather than the manual work in order to stop hiring.
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