Minimum wage is unfair

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Subject Area:Media

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The agenda for these minimum wages was to reduce poverty. But, the minimum wage has created harm instead of good. Minimum wage protects employees from exploitation by employers, but, raising minimum wage is unfair as it increases inflation, unemployment and affects organization’s performance. According to a research article published by Research Gate (2016) entitled “what are the negative effects of raising the minimum wage” author Donna Deo minimum wage affects an organization performance because the cost of production increases while productivity is constant. When an organization increases the cost of production but, does not increase productivity, then this will affect the organization financial performance. According to an article published by IZA World of Labor (2018) entitled “Employment effects of minimum wage” authored by David Neumark, he says that minimum wage creates unemployment.

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Many organizations may not have the finances to pay all the low-skilled laborers the high minimum wage so they will hire a few of them who will have to be overworked. The lack of employment for these people will result in poverty. Thus, the minimum wage that is meant to help the low-skilled workers will not help them. The high rate of unemployment will push people to the black markets where they will work illegally and they will not be paid the high minimum wage. As pointed out, raising minimum wage is unfair as it has reduced organizations’ performance which have been forced to pay their worker more yet productivity remains the same. Two, the high minimum wage has caused a high rate of unemployment as organizations are unable to pay low-skilled workers the high minimum wage.

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