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Minimum Wage Pros And Cons Essay

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Cannot ignore the issue of humane working conditions
• Wage gap, class issues, race issues, gender issues will inevitably be brought up
• Government vs private institutions

Raising the minimum wage would increase economic activity and spur job growth
Increasing minimum wage would reduce poverty

Increasing minimum wage would force businesses to lay off employees and raise unemployment levels
Would increase poverty

Higher minimum wage would reduce government welfare spending
Would hurt businesses and force companies to close
The minimum wage has not kept up with inflation
Would increase price of consumer goods
Improvements in productivity and economic growth have outpaced increases in minimum wage
Teenagers and young adults may be shut out of the workforce if minimum wage is increased
Increasing minimum wage would reduce income inequality
Would disadvantage low-skilled workers
Minimum wage increase would help to reduce race and gender inequality …show more content…
The expected response of employers to a minimum wage increase is not to lay off workers but to search for ways to absorb the cost impact by expanding sales, improving service, and general economic expansion. It is also believed that costs from the minimum wage are partially offset by reducing organizational slack and improved productivity. That is achieved through tighter human resource practices (such as better scheduling), increased performance standards, increased work effort, and enhanced customer service. Costs that cannot be absorbed are passed on to customers through higher prices. The institutional model also predicts that a higher minimum wage leads to a “ripple effect” in the internal wage structure as firms raise the pay of above-minimum wage employees to maintain morale while still allowing for some internal wage compression among employees with higher

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