Advantages and Disadvantages of higher minimum wage Research Paper

Advantages and Disadvantages of a Higher Minimum Wage
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Advantages and Disadvantages of a Higher Minimum Wage
Introduction
The minimum wage is a binding contract that specifies the minimum amount of remuneration that an individual can be paid for a specified activity over a set period (Stockhammer, 2013). Therefore, the minimum wage becomes a set standard that may be defined by law, statutes, or competent authority. Setting up a minimum wage thus protects workers from undue exploitation by employees by providing a basis for payment according to work done. Furthermore, the minimum wage also addresses poverty issues by ensuring that workers are paid enough to support their overall well-being and ultimately improve their living standards. Raising the minimum wage thus causes a ripple effect on the lives of workers, employers and the country as a whole since its impact can be felt across the board. However, workers are entitled to adequate remuneration for specified work value to prevent discrimination and protect their interests. While higher minimum wages are viewed to be beneficial, its impacts are widely felt both positively and negatively.
Advantages of a higher minimum wage
Firstly, an increased minimum wage increases the payments made to workers to offer their services in an organization. In turn, this increases their spending power, thus enabling them to buy items required to sustain themselves. An increased purchasing power can spur economic growth, with more people able to afford to sustain themselves (Cengiz, Dube, Lindner, & Zipperer, 2019). A significant portion of the population across the globe are low-income earners, hence playing an essential role in the overall wellness of their countries' economies. Therefore, with increased minimum wages, a large number of workers can support their economies to perform better. Low earning workers also benefit from higher minimum wages since they can receive better remuneration for their services. Higher wages thus improve the economy of a country since more people can afford goods and services offered. Improving the wages of individuals earning a minimum wage thus has positive effects since a significant proportion of a number of some country’s population earn a minimum wage.
Apart from that, higher minimum wages improve employees' motivation since they are well rewarded following their job descriptions (Dam, 2019). Motivation ensures increased productivity hence, employees that are well paid have higher productivity (Stockhammer, 2013). Financial gain is the leading factor that workers look at when assessing an employer hence, workers are likely to choose companies that pay higher wages. An adequately paid worker tends to have better mental and physical wellness, which contributes to their performance. Furthermore, better pay increases the retention rates, with more workers willing to stay at an organization. Higher wages increase the social and workplace comfortability of the employees, thus creating a sense of belonging, which further fosters motivation. Higher retention rates increase productivity since the company can retain their best performers, reducing the cost and time required to train new employees regularly....