The Pros And Cons Of Minimum Wage

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Statutory minimum wage does more harm than good Whether the statutory minimum wage (SMW) protects employees’ rights and benefits has caused a comprehensive discussion in many cities. In Hong Kong, SMW has come into force since 2011 and have a general regulation every year. By legislating this policy, the government is aiming at preventing from exploiting labor, sustaining low-salaried jobs and maintaining steady economic growth. Although SMW might have its logic and merits to a certain extent, this essay argues that SMW does more harm than good for labor. This is because it would increase the unemployment rate, harm worker health and step up living expense.
Minimum wage law tends to have a worse effect on the employment rate. In fact, 90% of the company in Hong Kong is small and medium enterprises and their daily operation is already difficult. By setting up the SMW, those companies are required to follow the law but most of them are not able to afford the extra expenses from pay rise. According to Schmitt (2013), the minimum wage has slight or even no noticeable effect on the employment rate in that the cost generated by minimum wage is large relative to most of the firms. Therefore, dismissal might be a common resolution for reducing their financial commitment and causing the rise of the unemployment rate.
Apart from the employment aspect, SMW also affects workers’ health in certain extent. Business profits are the first priority in many businessman’s minds; however,

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