Table of Contents
Minimum wage laws can be outlined as an initiative which seeks to pass a proposed law saying that a minimum amount of money is fixed for remuneration purposes, that is to say, government’s edge on setting up the least amount of wages that can be paid to any worker. This is a positive motive especially in scenarios where qualified workers are paid less than their equivalent in the market value, more so, in cases where the firms operate markets which are not faced with competitive skills. In their quest to come up with the minimum wages suitable to the common man, this effort has overlooked many factors that should be considered critically when setting up favorable wages to be paid to any worker based on the type of work under consideration.
The law enforcers might have assumed that the burden of increasing wages will be pushed down to the final customer. In real sense, this move cannot easily be put into place. In addition, the consequences to deal with may be too complex to evade. For example, increasing the price of the commodity in order to counteract the increased price of wages will automatically result in either the consumers shifting to the substitute goods or the consumers purchasing less of the goods as opposed to their earlier ordered quantities.
Likewise, some workers will be retrenched in some industries due to the industry's inability to contain all the workers. This can give rise to the retrenched workers being employed in similar competing firms. In the same way, if the price of the commodity remained constant, with the increase in the price of wages, manufacturers who deal with marginally produced good will find it difficult to cope and hence it will cause the closure of their businesses thus leading to unemployment and reduced output. In a bid to counter the negative impact of setting up minimum low wages, many have thought that “work relief” should be exercised in place of “home relief”. However, the difference is only found on the nature of the repercussions. “Work relief” refers to offering a remuneration that is higher than the market value in relation to the contribution of each worker.
Fixing a minimum amount of wage will result in employment of only those qualified for the job thus creating unemployment. Therefore, the unskilled will not be employed to attend to a job they can afford at a price less than the least amount fixed by the law even though the remuneration is worth the work they would have done. Consequently, this has a serious impact on the community at large: it denies them the little contribution that the unskilled people would have offered to the community. There has also been a proposal of setting up relief programs. Despite the fact that relief packages have been designed to deal with unemployment, this has caused more harm as it totally denies many people a chance to contribute to the development of the community. As if that is not enough, a man’s pride is lowered due to the lack of individual respect and independence brought about by self-reliance. Further, a person is hindered from doing what he does best. He is also unable to leap from his own hard work.
Emotional and political interference has emerged as many politicians have taken advantage of this proposed bill to gain a competitive advantage over their opponents. In addition, during open debates, the fundamental rules that govern the manner in which wages should be created are ignored. Alternatively, students have resolved to study substitute courses in a bid to counter unemployment problem, they have opted to settle for average courses which are not their first choice. Consequently, the increased competition for the available slots has led to lower remuneration being offered in this substitute jobs.
Creating unions is the most appropriate and civilized way of fighting for workers’ right to proper remunerations. Work efficiency can also help to achieve workers’ productivity through various ways. For example, ensuring that adequate facilities are made available to the workers, quality education should be made available and also proper training should be carried out occasionally to keep the workers get updated on how to increase their competence. This does not only have a positive impact on an individual but the society as well. It also benefits in wealth distribution. Increased output will be beneficial to the worker, the employer, and the consumer. In relation to the worker, his value to the society will be improved. Speaking about the employers, the end result of increased output is more profits which will enable them to pay their workers favorable remuneration. Finally, to the consumer, increased output will help deal with the increased demand. The suggestion that the government partly supports payment of wages (especially on work done apart from the normal work) is a move that has been viewed as applicable and better in a variety of ways.
In conclusion, the penalties and complications of relief packages should be highly emphasized on before deciding to adopt the minimum wage laws or before raising wages to be paid to any worker. It is therefore important to note that the satisfactory wages relate to productivity rather than government judgments. The harmful aftermaths of setting up minimum wage laws can be compared to the harmful outcomes brought about by government’s illogical action of increasing the price of commodities (which are most preferred by many consumers). To sum it up, it is evident that one cannot run away from the fact that implementing the minimum wage laws will automatically lead to lose of jobs.