Living Wage Pros and Cons List
The idea of a living wage is that everyone should receive enough resources to ensure that they and their families can survive. Sometimes this policy refers to a minimum wage, while it may also refer to a base wage given to everyone. Here are the living wage pros and cons to review.
List of the Pros of a Living Wage
1. A living wage benefits the local economy.
The requirement of a living wage reduces poverty rates and income inequality. It minimizes the minority and gender gaps that are found in today’s salaries. This structure makes it possible for fewer families to rely on social services to make ends meet.
2. It offers numerous business benefits.
People earning a living wage through their employment have lower absenteeism rates. Companies have lower training and administrative costs because there is a lower turnover rate as well.
3. It makes workers more productive.
People who must work 2+ jobs to make ends meet are not fully productive during their time on the job, especially near the end of their day. Not only does a living wage increase job satisfaction and morale, but it also encourages higher productivity levels.
4. It encourages additional spending.
Consumption is what drives the typical market economy forward. If there is more money available to spend on items, then companies have more opportunities to earn profits. Although prices may go up some under this structure, smart spending habits can help families save more than they can without a living wage.
List of the Cons of a Living Wage
1. It discourages personal advancement.
Requiring a living wage to be paid prevents employers and employees from entering into an exchange that is mutually beneficial. They hinder the proper functioning of a market unless a guaranteed minimum income is offered to each person to cover their basic needs.
2. It might encourage some people to stop working.
Some people would consider retirement from the workforce if they received a living wage without the need for employment. Although they would only accept what was necessary for their basic essentials, that would still be enough to get by – even in the modern economy.
These living wage pros and cons suggest that this structure benefits the majority of people in a society, although there are always some households that seem to fall through the cracks. What do you think about this idea?