In: Mechanical Engineering
Raising the minimum wage to $15/hr , can affect so many industries, how will this affect the design opportunites for mechanical, electrical,computer engineers.
Focus on a particular industry that you think will be most affected.
according to me manufacturing industries would me more
effected.
In a globalized and very competitive world companies try their best
to survive while they try to create value for their partners or/and
investors. For this you either will increase the sales without
increasing the cost at the same rate or you will cut the costs and
preferable you will do both. Employee wages have very significant
effect on the costs and any increase in wages or minimum wages
without productivity will damage the company's financial
performance. To survive in this kind of condiditon companies in
most cases will either downsize the employment by replacing them
with machines or will cut the salaries or delaying increase in the
salaries but by doing so workers' job satisfaction will decrese
resulting unhappy workers and unproductive organization.
There are also some countries that governments employ people for
certain jobs and pay them minimum wages. Increase in minimum wages
create resource allocation problems. Governments are forced to
allocate new reources to pay the increase but to fund that it
either has to give up some other spendings or has to borrow.
Borrowings some times can have some adverse effects on the economy
as a whole.
And finally, once you increase the minimum wage, all the companies
and institutions in the country face claims wage increases for all
sectors and for all jobs. Therefore, increase in minimum wages may
even affect the inflation rates of countries since increase in
wages ignite increase in consumption.
Minimum wage increase must be accompanied by increase in the
productivity , otherwise several and criticial problems may
arise.