Essay Example: Is Minimum Wage Justified?

The issue of whether or not minimum wage is justified has been the subject of major debate for a long time. Minimum wage refers to the lowest wage approved by law or through a special agreement such as one with a labor union. Minimum wage is usually directed towards members of society who perform low-skill level jobs. These members include the youth minorities and single mothers. Proponents of minimum wage cite that increasing minimum wage boosts the economy since these workers receive more pay hence increasing their spending power. On the other hand, opponents suggest that minimum wage should be abolished altogether since its imposition reduces the number of available jobs. Therefore, they claim, is because employers tend to reduce the number of workers for them retain profit margins, hence maintaining their financial status.

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Despite there being oppositions to the approval of minimum wage, numerous benefits would arise from its existence. Take the case study of the Alaska Airlines saga of 2005 in which 500 union baggage handlers were sacked and replaced with contractors. These contractors earned much less than the union workers signifying an episode of inequality. In the years that followed average household income rose by a third yet the minimum wage flattened .this led to residents of the Seattle-Tacoma area in which Sea-Tac airport is located putting forward a balloting initiative aimed at increasing the minimum wage. Such efforts under such circumstances can be deemed valid since the minimum wage in question is too small if not exploitative. For instance, the federal minimum wage in the United States of $7.25 is considered to be too low and way below the poverty line.

In such instances raising the minimum wage would be a reasonable option since the aim of most employees is to improve their living standards. Studies have shown that there are no adverse effects of raising wages, rather there will be more income equality as the executive pay is reduced in order to cater for increased minimum wages. In addition, increasing minimum wage above the poverty line enables affected workers to lead somewhat decent lives without affecting chances of other job seekers gaining employment. These, according to Steve Coll, will enable many people to achieve relatively normal levels of economics security and disposable income.

However, Mark Wilson has illustrated the negative effects of introducing minimum wage laws. In other cases, businesses tend to employ loopholes in these policies. For example, the businesses may exempt certain benefits that the workers used to enjoy in order to cover for these added costs. They may hire less or charge higher prices for their products and services in an attempt to preserve their profit margins. Decades of economic research have shown that minimum wages usually end up harming workers and the broader economy. A relevant study is the current economic slump in the USA. It would easily be damaged by policies favoring wage increment.

Mark Wilson argues that minimum wages tend to stifle job opportunities for low-skill workers, youth, and minorities who are often the targeted beneficiaries of wage policies. These cases being considered, it would be wiser to focus on policies that would generate faster economic growth. This would, in turn, generate more income opportunities for all potential workers.

In, regards to these points there are a number of effects of minimum wage on society.

Firstly the raising minimum wages reduces the rate of employment by businesses as they strive to retain their profits. This, in turn, leads to unemployment and subsequent poverty within the society. On the other hand, minimum wages increases turnover rate of workers within their specified skills, hence bringing about better service and product delivery to the society

With all these arguments in place it is clear that the minimum wage debate is not to be put to bed anytime soon; thus the case remains open for further discussion.