Minimum wage law essay
The issue of introducing a minimum wage law seems very welcoming and at the same time, very unwelcoming. If the law is introduced, there will be a surge in the quality of lifestyle of millions of workers who are on the border line of diverging to poverty. Some other positive factors include increase in motivation of workers and elimination of unequal wages. The unwelcoming part of the law can be the increase in unemployment, increase in market prices and can eventually lead to inflation.
This is a vital issue which not only concerns minimum wage workers, but also the general public.
Introducing a minimum wage law can have positive effects on the economy and the business growth in Canada. The raise in wages of millions of workers can lead to an increase in the quality of lifestyle. The current quality of life and the status of labour workers is very disturbing. Introduction of a new minimum wage law would reduce poverty and definitely increase the quality of work.
Earning more money is one way to increase a person’s motivation to work. Increase in minimum wage can also help reduce wage inequality. During a thriving economy, when most workers earn hundred dollars an hour, why should the lowest paid workers not be able to make enough money to support their family? Introducing the wage law can eliminate such type of inequality. If the wage law is introduced, Canadians can witness a major change in the lifestyle of low-wage earners and decrease in poverty rates.
The introduction of a minimum wage law can also have drastic effects on the economy. If the law is approved, Canadians will see a huge increase in unemployment rates and product prices. This can eventually lead to inflation. Evaluating the issue as an economic model, wage can be identified as a type of price. Considering the law of demand, when prices go up, buyers will buy less. If labour becomes more expensive, employers will hire fewer workers. As for the law of supply, higher price of supplies will result in a surplus in supply. The higher the wage, the higher the number of workers willing to work, however, the number of workers hired will be lower. This increase in unemployment can hamper the price of goods and services. Since businesses have to allocate more money for wages, they will charge more for their products and services. If $8.50 is needed to create a product, the product price will be much higher in order for businesses to make a profit. This can lead to inflation in the economy. Therefore, introducing the law can prove detrimental to the economy and business growth.
The minimum wage law should not be introduced since it leads to many severe consequences. Having a high unemployment rate will lead to the decrease in the economic potential of the country. Businesses will have a hard time coping up with paying high salaries which eventually lead to a cut in jobs or increase in sale price. Business growth is the source of economic opportunity and also advancement for the poor. A hike in wages is not an efficient way to reduce poverty. It has to be done through the introduction of more number of jobs and stable market prices.