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Minimum wage argument

A lawful authorization for the smallest bound of wage has led to the emergence of

different instituting of what is perceived to be a minimum wage globally. Some countries have

gone a step further by identifying what minimum amount of wage that employers should pay.

However, many economists argue that authorizing minimal wages by the state can lead to

unemployment within these states. This is because imposing the minimum wage automatically

raises labor prices within a given economy, making people with the least skills in various

industries to jobs. This calls for imposing wages whose aim is to target to improve the

productivity level within these industries. Besides this, efficiency must also be considered in

formulating this wage threshold. In the formulation of what should be perceived as the minimum

wage, the policymakers must consider the industrial policies governing several industries that

helps in the creation of sectorial jobs within these industries that help in the moderation of high

wages within these sectors, thus making them grow economically thus increasing the demand for

work in them.

It is important to note that a reasonable, lawful authorization of minimal labor within the

economy reduces poverty, promotes equality, and promotes authentic development. Therefore,

the formulation of what can be perceived to be the minimum wage within the economy must be

guided by the productivity and the profitability of these industries to facilitate the balancing of
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the industries' profitability and the country's economic situation. Therefore, the policy makers

must consider creating a scenario where these policies help boost the economy, thus considering

the promotion of economic growth. Therefore, legislation on minimum wage is considered to be

helpful in boosting the economic situation of low-income countries within a given state.

A minimum wage should be put in place to benefit those with low skills. Thus, it is clear

that minimum wage cannot work as a determinant of what ought to be paid to other carriers

except low-skilled employees. As evident in Detroiter story, increasing the low skilled workers'

minimal wage can help improve their lives (Laitner, Bill). Analyzing the "Walking 21 Miles to

Work'" by Bill Laitne leads to the conclusion that minimum wage workers are hard workers, but

their job privileges have not changed for a long time. The working condition of these workers

makes it hard for them to beat the poverty line, as evident in the article where Detroiter cannot

afford a car or renting a house near his working site due to the high cost of living that his work

payment cannot afford thus forcing him to walk for a long distance to work. Low skilled workers

in many companies nowadays have been forced to rely on earned income tax credit. Therefore, it

is important to consider the prevailing economic situation and the company's financial status by

policymakers in order to formulate a minimal wage threshold that will not hurt both the

employer, employee, and the economy. However, I still believe that setting a minimum wage

legislature will affect the country's economy, affecting the companies' employment capabilities.

Arguing from an economic point of view, a rise in the minimum wage will lead to an increase in

labor cost, thus decreasing the profit of the industries in question. However, on the other hand,

liberal economists argue that increasing the wages of the employees will lead to the increment of

their productivity, thus increasing more revenues for the company.

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The minimum wage is embedded in the Fair Labor Standard Act of 1938. The minimal

wage is meant to create fairness in society (Huppke). The creation of a fair society will facilitate

technological advancement and economic growth, thus improving the people's living standrd of

the people and improving business activities in the country. People should work to the attainment

of economic growth, which will automatically translate to the increment of the minimum wage in

the economy. Today federal minimum wage in America is $7.25 per hour with a proposed

increment to $10.10 per hour (Huppke). The workers' weekly pay will increase, thus lifting them

from poverty, thus improving their living standards. The erosion of the minimum wage value has

significantly led to the increment of income distribution inequality because it is not tied to

inflation. Thus, there is a need to adjust these figures to match the current economic situation

brought about by inflation and other economic factors, thus making the value of the quoted

amount decrease. Therefore the minimum wage has to be increased while at the same time tied to

the rate of inflation in order to facilitate equal distribution of income within the country. This

will help pay the workers the right amount of wage as per the prevailing economic situation, thus

improving their living standards. Increasing the minimum wage bill will help people meet their

basic needs. Besides, this will help in the improvement of the working conditions. However, this

poses a threat of employing fewer people in society due to the increment of the labor cost, thus

decreasing the business entity's profitability. Besides, the occurrence of an increment in the

minimum wage bill can lead to an increase in price for services and goods in the economy, thus

affecting those without a reliable source of income.

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Works cited

Laitner, Bill. "Heart and sole: Detroiter walks 21 miles in work commute." Detroit Free Press (2015).

Huppke, Rex. "The argument for increasing the minimum wage." The Philadephia Inquirer

(2014).