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MINIMUM WAGE IN SUPPORTING THE POOR

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Minimum Wage in Supporting the Poor

Over the years, there have been debates on whether the minimum wage is effective or

ineffective in supporting the poor in society. Some economists have argued that minimum wage

has solved many issues concerning society's poor and vulnerable groups. On the other hand,

other economists have argued from an angle that the minimum wage has not helped the poor in

any way, but it has led to an increase in unemployment rates. The federal minimum wage was set

a long time ago, and its primary purpose was to reduce the way some workers were

overexploited, and that is, they did a lot of work, but the wages were low (Burkhauser, 2014,

p.412). Additionally, it ensured that there was economic fairness all through in different states. I

strongly agree that the minimum wage has and is effective in ensuring that the poverty levels in

the states are reduced. Additionally, the vulnerable people in society, such as the elderly and

children, are not exploited, as discussed below.

Minimum wage laws protect the rights of the employees and ensure they can get a higher

wage. For instance, low-wage workers do a lot of work in a particular state and end up getting

low pay. According to the minimum wage laws, the amount they receive per hour increases

which is the first case that motivates the worker, willing to do the work. Additionally, the

employee remains satisfied (Cengiz et al., 2019, p.1425). The outcome is that there are reduced

conflicts and through all these instances of higher wage rates, especially for the people from poor

backgrounds, the living standards are improved hence reducing the poverty levels. In addition,

the vulnerable individuals in the society who get a way to receive a higher wage rate have an

opportunity to reduce the rate at which they are dissatisfied.

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Unfortunately, the issues of income inequality and wage differences have also been

among the factors increasing poverty rates. The mentioned is where the employers decide the

payment, and obviously, some employers can be fair to the payments they make. In contrast,

others remain unfair and overexploit their employees. Also, different states have got their rates of

compensation. The states with high-income flowing have to pay their workers higher wages,

while those whose income flowing rates are still low have to pay low wages. Therefore, setting

up minimum wage law helps reduce income inequality and wage differences (Godøy et al., 2021,

p.1119). The employers must ensure they pay their employees the required amounts and ensure

that all the states are almost at the same level and no state overexploits the labor force. By

considering all these, the low pay households are considered, which improves their living

standards, leading to reduced poverty levels.

Besides, minimum wage ensures equality and fairness. Hence it aids in reducing the rate

of discrimination of minorities in society. For example, in the UK, minorities are the poor, the

children, the elderly, and those individuals below the poverty line. The minimum wage in the UK

will aid the minorities in that it will ensure they have a say in society. Research has shown that

not individuals in the UK exploit the minorities in the society by giving them unworthy works

and not paying them. However, a law has been set in the UK regarding the minimum wage that

ensures that any employer who ends up risking employing any individual will ensure they have

paid them accordingly (Leigh, 2007, p.438). The law has decreased the rate at which minorities

are discriminated against and unconsidered. Furthermore, with the law above, low-income

families in the UK are in a position to earn from the work they do at any capacity. The

mentioned will ensure that minorities in the UK improve their living standards and move them

from extreme poverty conditions. Moreover, the number of individuals above the poverty line
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will increase. The minimum wage in the UK has ensured that minorities are treated with fairness

and equity.

Furthermore, the minimum wage will also help the government in general, reducing the

rates it spends to cater to the welfare of the poor and the vulnerable. Additionally, it will lead to

increased wage rates. In most cases, the government aids to support the poor by providing

affordable housing rates, sometimes food and other services that might be essential to the poor.

When there is a set minimum wage for the semi-skilled and, in most cases, the unskilled in

society, it is vital because the average wage per hour is significantly increased. By all these

instances, it is evident that most people can provide all they need concerning the poor (Cengiz et

al., 2019, p.1431). Therefore, the government is left with a small percentage of whom it caters

for, and this reduces its spending rate and, on the other side, reduces the poverty rates and makes

many people stay comfortably with no strain at all.

Even though minimum wages laws effectively reduce poverty, some cons make it hard

even to sustain the vulnerable people. For example, some companies might offer high wages

above the minimum wage, so many laborers get attracted, and they flood in the market, and all

need jobs. On the other hand, employers or companies willing to pay high wages will be

significantly reduced (Burkhauser, 2014, p.414). Therefore, this comes out with an outcome that

many people who had jobs in the different sections or companies can lose their jobs since

companies try to maintain few workers. The above leads to total unemployment, and most people

stay helpless and cannot maintain their living standards, leading to increased poverty levels. The

vulnerable groups in society tend to suffer.

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Additionally, some states have a low minimum wage, which becomes a disadvantage,

and in most cases, some groups, such as the unskilled, may not secure a job. The number of

people who secure the jobs will be low since the states with low minimum wages cannot employ

many people looking for such jobs. Even if the government comes up with an initiative of

catering to all the welfare needs of the poor, it cannot satisfy all of them (Yu, Mankad, and

Shunko, 2021). Therefore, most members cannot sustain themselves in the states with low

minimum wage, and even their families face high poverty rates. Additionally, they cannot

maintain the living standards and the outcome, in this case, increases unemployment rates. The

aforementioned becomes a significant factor that leads to increased poverty levels among the

different states and the vulnerable people in society.

Conclusively, the minimum wage has both pros and cons, and it depends on which states

and the cost of living of the people in the particular states. Despite all the pros and cons, the

minimum wage has aided a lot in ensuring equality has been reduced in all states, especially

those with people living with low living standards. Again the rates of discrimination against

minorities have been significantly reduced. Most semi-skilled and unskilled workers have been

considered, and they tend to receive an income that sustains them with their families.

Additionally, through the minimum wages, most employers have learned about equity, ensuring

there is no exploitation of the workers. It has made most workers work while motivated,

satisfied, and with no discrimination, improving living standards and reducing poverty levels in

the different states.

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References List

Burkhauser, R.V., 2014. Another Look at the Economics of Minimum Wage

Legislation. Australian Economic Review, 47(3), pp.409-415. Available

at: https://onlinelibrary.wiley.com/doi/epdf/10.1111/1467-8462.12077?saml_referrer

Cengiz, D., Dube, A., Lindner, A. and Zipperer, B., 2019. The effect of minimum wages on low-

wage jobs. The Quarterly Journal of Economics, 134(3), pp.1405-1454. Retrieved from

https://academic.oup.com/qje/article/134/3/1405/5484905

Godøy, A., Reich, M., Wursten, J. and Allegretto, S., 2021. Parental labor supply: Evidence from

minimum wage changes. Journal of Human Resources, pp.1119-10540R2. Retrieved

from: http://jhr.uwpress.org/content/early/2021/11/03/jhr.1119-10540R2.abstract

Leigh, A., 2007. Does raising the minimum wage help the poor?. Economic Record, 83(263),

pp.432-445. Available at: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-

4932.2007.00432.x

Yu, Q., Mankad, S. and Shunko, M. (2021). Research: When a Higher Minimum Wage Leads to

Lower Compensation. [online] Harvard Business Review. Available

at: https://hbr.org/2021/06/researchwhen-a-higher-minimum-wage-leads-to-lower-

compensation.
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