In: Economics
there is a fear that adjusting minimum wages upwards will lead to a general decline in the level of training firms offer their employees. is there any legitimate cause of worry?
The increase in minimum wage tends to decrease the training
provided by the firms. The increase in minimum wage will compel
more workers to find a job, and hence there will be an increase in
the level of competition. Increased competition will also force the
firms to pay higher wages, that will thus increase the cost of
training. The increased cost of training will compel the firms to
reduce the level of training provided to the employees.
The reduced level of training will definitely create a legitimate
cause of worry. The reduction in the level of training will lead to
less skill development among the employees. The reduced level of
skill development will also reduce the productivity of the
employees. Hence, the production process of the firms will get
negatively affected. With a reduced level of training, the
employees will not be able to work efficiently and thus will lead
to their termination.