List of Pros and Cons of Increasing Minimum Wage
There’s no better feeling than being done with school and making your way into the real world. A lot of people look forward to this phase in their life which is often regarded as the transition into adulthood. With the stepping up from the academe and stepping into the work force, there are a whole bunch of things that might come into light that may not have been too obvious at the start. If you were thinking you were probably going to get six figures right from the get-go, you had your head in the clouds. The reality is that most workers will start at minimum wage – a salary set-up used by employers who hire first time workers and fresh graduates.
Every country has its own minimum wage rate and this is basically the lowest salary that employers are allowed to give their workers. Any employer who gives less than minimum wage is in violation of labor laws. A lot of people who work minimum wage employment have long been petitioning for an increase in this lowest salary rate, and while that might seem like a reasonable request, there are down sides to increasing minimum wage.
List of Pros of Increasing Minimum Wage
1. Better Motivation to Improve Productivity.
When people are promised more for their efforts, they are more likely to work harder. This is a basic principle proven by studies on reward systems and reinforcement. If workers are given higher compensation, they become more inclined to produce better quality work because of the motivation that a heftier salary provides. This could also become the reason for people to stay with their employers after several long years, as compared to paying much lower rates only to have good employees leave in search of greener pastures.
2. Enhanced Quality of Life.
When people have more to spend, they’re able to improve the quality of their lives. If minimum wage is increased, those at the lowest level of the workforce can gain the opportunity to improve their lives and move from where they are towards better living conditions. If and when this happens, you can expect those at higher ranks to have to move up as well, causing a chain reaction in society where everyone manages to make better living conditions for themselves.
3. Higher Wage for All.
You can’t expect to increase minimum wage and not have it affect the salary rates of the others in higher ranks. When you increase minimum wage, even those in higher offices and positions would be entitled to get better pay for their efforts. This means that every worker in the industry would greatly benefit in terms of compensation if and when the debate on increasing minimum wage ever does push through.
List of Cons of Increasing Minimum Wage
1. Increased Prices.
To run a business or a company, you have to make sure that the money you spend on your operating expenses and other costs does not exceed your profits. If an increase of minimum wage becomes the reality, business would therefore have to allot more funds towards paying employee salaries. This means they would have to take out more from their profits to make up for the increase, reducing the amount of revenue they make in a given period of time. The solution would be to increase the value or selling price of the products or services they offer, thus affecting the entire society that benefits from their brand.
2. Less Work Opportunities and Employee Benefits.
Taking the previous point into account, there are other ways an employer could save up on spendings. Another method they could put into action would be to cut out any unnecessary or non-vital employees all together, just retaining the ones that are essential to their operations. This means some employees could lose their jobs all together. One of the other potential cost cutting methods employers could utilize would be to reduce the quality of employee benefits, providing just the essential government required insurance coverage and other benefits instead of actually advantageous offers.
3. Decreased Longing for Career Improvement.
While increased motivation is seen as a potential outcome of increasing minimum wage, there is another direction it could take all together. If and when minimum wage workers have a much more decent monthly salary, they might stop striving to become better. Because they have more to spend and they feel comfortable with what they earn, they could very well give up on advancing their careers all together. Although this might not seem like a problem now, a population that doesn’t strive towards progress is doomed to lag behind the rest of its competition. It’s important to maintain the drive to move towards better situations in order to bring out the best of workers and employees.