by Owen E. Richason IV, Demand Media http://smallbusiness.chron.com/impact-minimum-wage-economy-2772.html
Minimum wage has been defined as ‘the smallest hourly wage that an employee may be paid as mandated by Federal law’. The minimum hourly wage of a country has a very deep effect on the economy of the country and its influences many aspects of a country’s economy. These minimum wages have been implemented to pull individuals out of poverty and hence decrease the poverty level and increase employment level. These wages usually for unskilled people or those who are not working full time. These wages act as incentives for people on subsidy or welfare to increase their income and work for a better living. These minimum wages have their benefits as well as disadvantages. Just like the two sides of a coin. A person who is earning a wage daily will be able to preserve his dignity too by becoming a contributing member of the society. Not only this, but the minimum wage law prevents companies from exploiting those people who have few employment alternatives.
Advantages of minimum Wages:
One vital advantage of this minimum wage law is that it helps families. A family who has at least one individual fully employed can have a proper living above the poverty line and support his/her family in a dignified way. Had there not been this law, then many people would be forced to live a life of poverty. Current census concluded that almost 40% of Ontarians are working in minimum wage jobs. This is a large portion of the population and these people are forced to live from paycheck to paycheck. With the rate of inflation the gas and oil prices have skyrocketed putting more burde...
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... loss in jobs will result if the minimum rate exceeds and if the wage is too low it might not be enough to keep above the poverty line. There is abundant evidence
that a 10 percent increase in the minimum wage leads to a 1 to 3 percent decrease in employment of low-skilled workers (using teens as a proxy) in the short run, and to a larger decrease in the long run, along with rising unemployment. It is believed that the minimum wage law can cause unnecessary hardship for the very people they are supposed to help. It should be at a balance with the person’s basic needs and for the business to thrive. It has also been witnessed that in order to overcome this situation big companies hire people, but then they are not given enough hours to cope up with their needs. This is not the solution to the problem as the people have to look for other jobs to fulfill their needs.
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