The decision to increase usually spark debates on its advantages and disadvantages. Both arguments can be supported, so it becomes difficult to decide on what is best. Increasing the minimum wage may look beneficial and impressive to you, but it could also lead to arising in the rate of unemployment among the youth. A country should, therefore, know the pros and cons of increasing the minimum wage before deciding whether to do it or not. Below are the pros and cons of increasing the minimum wage.
Increases income and lifestyle improvement
With an increase minimum wage, there is always increased income for those coming to a company as entry-level workers. When the minimum wage is higher, workers can earn more amount of money that helps them to improve their lifestyle. An increase in minimum wage will, therefore, help employees to take good care of their families with much ease.
Help to overcome inflation
Another benefit that results from increased minimum wage is the fact that employees can overcome the increase in the cost of living caused by inflation. Also, most of the worker that benefit from this increase does not have educational qualifications hence have no chance of growth. Therefore a rise in minimum wage allows them to earn more and this helps to reduce the gap between the poor and the rich. This change may not be sudden, but slowly it will make a difference.
Benefits the economy
It can benefit the economy of a country since people with more money will spend more hence benefit the local businesses. Having part of the population struggle to get their daily needs is bad for society, and this situation can be improved by increasing the minimum wage.
When the minimum pay increases, companies start to carry out cost-cutting methods like downsizing their staff. In such cases, the bottom rung employees who have little or no experience are the first to suffer. This leads to a rise in the rate of unemployment among the youth.
Reduction of entry-level jobs
Despite increasing the income for entry-level jobs, increasing minimum wage can lead to reduced number of entry-level jobs. Workers that earn minimum pay are usually the least regarding qualification or the least experienced in the company. This means they are the ones who can be replaced easily. Employers will, therefore, prefer hiring those who are better qualified for the jobs if they have to pay more. This can lead to lack of jobs for the unskilled workers, and this is disastrous for them.
The minimum wage has both its advantages as well as disadvantages that you need to examine before implementing it carefully.