What Is Minimum Wage?
Minimum Wage Laws
“Minimum wage” is the lowest minimum wage that an employer may pay to a worker in montly, daily and especially hourly wages. Theoretically, workers are not allowed to legally sell their services for less than the minimum wage, either.
The idea behind a legal minimum wage is to establish a standard of living so that less skilled workers do not live in poverty in the United States.
Opponents of minimum wage dispute whether this is what happens with the minimum wage, claiming a legal minimum wage leads to unemployment of younger, inexperienced, handicapped or less skilled workers, since a company or employer doesn’t want to pay these workers less than they’re worth.
Therefore, they claim that the minimum wage helps more skilled workers, while actually harming less skilled workers.
Those against this line of argument would claim that people cannot live if they earn below a certain wage. These people would argue that the people who benefit the most is management or “business interests”, as they benefit from cheap labor at an exploitative rate.
Since there is evidence to support either side of the argument, it might be that the minimum wage laws are not an either/or proposition, but help many, while hurting others.
All “western” civilized nation and 90% of worldwide nations have minimum wage laws, in an attempt to prevent a class of “working poor” or poverty-stricken workers. Australia and New Zealand were the first nations to enact minimum wage legislation, in the late 19th century.
What Is the Current Minimum Wage?
Currently, the national minimum wage in the United States is $7.25 per hour. In the United Kingdom, the current minimum wage is £5.80, which is actually higher than the U.S. minimum wage, due to the strength of the U.K. pound. The state of Washington in the U.S. has its own minimum wage law of $8.55.
Even in regions that have no fixed minimum wage, other pressures establish an unofficial minimum wage. Public opinion about extortionate wages may force a corporation to set their wages at what are considered acceptable levels. The appearance of labor union or workers union might exert an upward pressure on wages in that area, while even the threat of unionizing workers might pressure an employer to keep wages high enough to maintain a contented workforce.
Multinational corporations located in so-called Third World countries might be pressured to pay wages more in line with what they would pay workers in more developed countries by governments or media coverage.
Do Minimum Wage Laws Work?
There have been endless arguments and debates about whether the minimum wage laws do what they are supposed to do. The fact that 90% of the governments in the world mandate some kind of minimum wage indicates that a vast majority of the world’s leaders at least think the minimum wage laws help and not hurt a society.
Opponents of minimum wage laws would argue that the acceptance of minimum wage in the most economically powerful countries in those countries to pressure governments in the less developed nations to accept minimum wage laws.
Studies have shown that a minimum wage law generally does not increase unemployement, as it is claimed to do. Minimum wage laws also put more money into the hands of those with the least money, so they spend their entire paycheck.
This, in turn, helps drive the economy, since all this wage money is put back into the consumer economy. Also, it’s mentioned that a minimum wage law tends to help a government’s budget, since the government doesn’t have to use as many funds to pay for services for the less fortunate.
Most of us know that a person would have a hard time living in America making two dollars an hour or four dollars an hour, so it’s probably a good idea to have a certain minimum wage in effect. Raising the minimum wage might be inflationary in an of itself, but raising the minimum wage helps some of the poorest among us to keep up with the price of inflation.
This entry was posted on Thursday, November 5th, 2009 at 12:54 am and is filed under Career, Money, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.