On the surface, it always looks like making more money comes with only good things. There are however people that believe that with more money come more problems. This is what brings about the debate revolving around minimum wage laws. Governments seek to have a legal guarantee that workers are to be paid some minimum amount of money. From the perspective of workers, there are significant advantages to such regulations, with a number of drawbacks as well.
The biggest advantage is the fact that there will be more money for workers. The law allows workers to earn some minimum amount that is independent of what companies and other employers believe they need to be paid. Without this lowest amount, employers would take advantage. In areas with few jobs especially, they will pay wages that workers cannot use to survive, but people will be forced to take such jobs because they have no other options.
Inasmuch as there are no jobs that guarantee 100 percent security, employees are able to draw some security from these laws which guarantee them considerably higher earnings. As long as they hold such jobs, they will know how much they are supposed to earn. Any form of uncertainty is kept away as a result.
Proponents of these laws believe that if such regulations were not set, there is the probability of workers being exposed to anticipated and sudden drop in wages. In this way, they will find themselves out of their jobs after a while. Beyond that, they will not be able to live off just a single job- they will have to get several jobs.
Investments are an important aspect for the employed. However, the only way one would be able to do so is when they have an assured income and stable jobs. Thus from the perspective of the worker, investment becomes an achievable dream when jobs are stable and income considerable. As concerns businesses, they will invest more in productivity of workers. In other words, if businesses have to pay more for their employees, it will serve them more to train, insure and care for the employee.
From a macroeconomic level, minimum wage laws could be hurting to workers. When companies and businesses are made to abide by certain regulations bordering on wages, a number of them may be forced to pay more than they can actually afford. They will thus be forced to downsize on the number of employees as the only way to stay profitable. Some employees will be laid off and there will be fewer jobs eventually.
Another shortcoming is outsourcing. In the modern market, companies want skilled labor at the lowest costs possible. Therefore, companies that do not have deep pockets will tend to look to other nations for cheaper labor. Hiking of wages will be a threat to workers already employed as firms look to do compensation for the cost of keeping workers employed at minimum wages.
Therefore, it is evident that with minimum wage laws, workers are set to benefit a great deal. The shortcomings affect mainly people that are yet to get employed. Further, small businesses and companies are set to be the biggest opponents of the law because they will not benefit as much.
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