Question

Opinions are divided when it comes to the evaluation of minimum wage laws. The issue of raising the minimum wage is always subject to political debates. Which side are you on when it comes to minimum wages? Should there be one or should we repeal it all together? List your arguments clearly.

Answer 1

Answer: Minimum wages are the lowest remuneration that is to be payed by employers to their employees,its like example of price floor as below that level employees can not sell their labour.

Issue of evaluation of minimum wages laws and issue of raising it always subject to be political debate.As according to political economist their are various pros and cons of fixing minimum wages:

Pros :are like

1.It helps in raising living standards of employees.

2.In times where inflation is rampant ,stagnation of wages ultimately hampere the social wellbeing of whole society.

3.By increased wages,it increases the purchasing power of consumers hence will ultimately leads to increased demand so supply will increase too.So firms are also gets its benefit.

4.People will spend more in education,health and hygiene of their children and this will in future produce good human capital for market.

5.Proliferation or generation of low wages jobs during Economic Turmoil conditions ultimately increase the Poverty base.

Cons :are like

1.Setting up minimum wages ,lowers the quantity of labour demanded.Hence it will lead to reduction in employment level.

2.It incraeses the level of inflation as with increase in wages ,demand in the market increases too.This will hurt the poorer section of society.

3.Quantity of labour reduce hence those who get jobs earn better and high,but who are not in labour earn nothing hence increases unemployment.

4.Reduce the skills in low level workers hence further lead to reduction in their future earning and ultimately decreament in standard of living.

Having said that although pros and cons have their own importance but some how as point of view of a sustainable future generation,pros outpour or we can say has edge over cons of fixing and increasing the minimum wages.

Hope it helps!

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