The fixation of wages bind the company to pay the workers the minimum amount as the government has fixed. Such situations might contribute in increasing the costs of employers thus causing them to make adjustments otherwise. For instance, the employers can choose to adjust this cost by reducing the hiring of workers, reducing the working hours, minimising the benefits and allowances and charging higher prices in return to compensate the cost incurred. A number of policy makers are on the view that companies cope with the fixation of minimum wages and increase in the minimum wages by compromising on the profits but in most of the situations, this is not the case. In order to maintain their net earnings, the business look for a number of alternatives, that includes cutting employment and making other similar decisions.
A minimum wage is considered as the lowest compensation that employers may legally pay to employees. Similarly, employees may not sell their labor below the price floor. A price floor is a legal minimum in which the government does not facilitate the price of a good or service to decrease below the floor. The minimum wage has gained impetus among policy makers as a method to lessen rising wage as well as inequality of income. However, higher minimum wage or increasing price floor on the price of labor leads to job loss and probable magnitude of those losses.
However, in the long run, many employers will not be able to maintain to stay in business due to the significantly high wages. An increase in minimum wage would cause millions to lose their jobs and put them further in poverty. It would even make it harder for them to obtain jobs after the increase due to the increase of competition in the job market, and most importantly an increase in minimum wage would cause increase in the price level and it will reduce significantly consumption due to the lack of purchasing power that is cause by the higher inflation rate. The minimum wage should not increase because it is unsustainable economically. Another approach of help guide people out of poverty can be a push for an increase in education and knowledge capital instead of continuously increasing the minimum
At the turn of the 19th century riots and strikes played an essential role in increasing the amount of positive labor standards for workers, decreasing the profit of industry owners and the national economy, and the rise of consumerism and the middle class. The strikes were very violent; this scared the middle class, which led to their demand for labor laws. Along with this many of the strikes resulted in workers getting a raise in pay, which ultimately led to the growth of the middle class. Although the strikes had a positive effect on the workers the strikes weren’t good for everyone. The strikes played a major role in decreasing factory owner’s profits, and even slightly hampering the economy’s growth.
We have had numerous recessions which in turn makes matters worse as middle class working people lose their jobs or get paid less as a result of of this. When a group faces this kind of setback, it creates inequality in the country because not everyone suffers because of this, but not much is done to erase the issue. Most problems arise when the middle class is expected to pay a certain amount in taxes that could be beyondmeans while the 1% does not face the same issue. We saw this become a main concern in the 2016 election as some candidates wanted even lower taxes for the 1% in turn putting that burden on the middle class. When focussed more precisely, it becomes known of the wage gap between white workers and black or latin workers.
The creation of political machines are taking over the jobs that the people need. Industry hurts employment and trusts are hurting wages for poor workers. Many of American citizens and immigrants are living on the streets. A woman will have an equal or a higher job title than a man and still get paid less. Some men still believe women should get paid less.
These earnings gaps can be explained by lower education levels among immigrants for example. Regarding the effects of immigration on labor outcomes Immigration affects the wages of the host country in several ways. First of all, it increases the labor force of the receiving country and, this growth in labor supply, have a negative impact on the average wages if there aren’t factors of production that can adjust this change. Secondly, as immigrants could substitute native workers in their jobs, they are also expected to lower the wages accepting lower conditions and salaries. Generally, immigrants tend to concentrate in certain regions, often the major cities.
1. Introduction In the modest term, a minimum wage is a lawfully authorized minor bound for wages, but the term “lawfully authorised” is unclear, leading too many different kinds of minimum wages institutions (Cunningham et al, 2007:19). It further states that in the most straight forward cases, such as Brazil and Bolivia, the federal government identifies a wage level and all employers in the country must pay at that level or above it (2007:19). Economist have tended to oppose minimum wage on the grounds that they reduce employment , hurting many of those they are supposed to help (the economist:24/11/2012). The main “common sense” argument is that by imposing minimum wages, one artificially raises the price of labour way from its “market-clearing” level and higher unemployment results-and the first to lose their jobs will be the least-skilled workers (city press;2014/11/25).
Globalization is a key theme that has been discussed in almost all of the above articles. Aguilar and Herod’s (2006) article argues that cleaners in the contemporary economy continue to suffer low wages and poor working conditions because of neo-liberalization. Neo-liberalization has resulted in many companies embracing the outsourcing of employees to save up on wages and social security benefits. From Banerjee’s (2007) article, it is clear that neo-liberalization and globalization are the main reasons that have led to an increase in working hours. This has made many companies restructure job designations because they want to maintain the long working hours and low wages.
As our recommend above, the government should implement the better policies to help reduce the rates of unemployment, which can be done by ensuring that the economy is stabilized, reducing taxes on businesses and creating a conducive environment that promotes business in the country. This is because when people are long-term remain jobless, this will notice majority of these people engaging in illegal acts such as crimes, which will only worsen the current state of economy of the country. Therefore, it is the responsibility of both the government and the private sector to increase the employment levels in the country. And the citizens should also equip themselves with the skills and attitudes that will help them to fit into the job