Government Intervention to Help the Working Poor: There is a Better Option than Raising Minimum Wage

SMEs are affected by the rise in minimum wages. This assumption situation explains how the killing of the minimum wage works. Let's consider a small community clothing store that has 50 customers per day, consuming 20 dollars a day and spending 20 dollars per customer. The company's total annual income is 360,000 dollars. This looks like a lot of money. How can a slight rise in minimum wage hurt when a company earns this money? Still, we need to deduct the cost of doing business. There are 10 employees in the clothing shop and they work 2,000 hours a year with minimum wages (for example, $ 8 per hour).

Under the Minimum Wage Act, all employers are obligated to pay employees the minimum wage set by the government. The idea behind the Minimum Wage Act is to support the working poor without directly increasing government expenditure. Trade unions are part of the most influential minimum wage supporters. They frequently try to determine the minimum wage of their members. However, the Minimum Wage Act is very controversial. Critics believe that they basically hurt the economy, not helping them. This argument is based on the law of supply and demand. If the minimum wage rises above the equilibrium wage, the employer will no longer be able to hire the same number of workers. As a result, the unemployment rate has risen. As a result, people who are still employed are certainly better because they are profiting from higher wages. But at the same time, the rise in the unemployment rate will put more people at risk of poverty.

For decades, many Americans think that the minimum wage should be raised. Will it help or will it be injured? Many Americans want this because they believe it will help them to live better lives. In addition, they believe this will help the poor from poverty. In addition, Harkin believes that raising the minimum wage implies more US gross domestic product ("boost ..."). - In theory, when the minimum wage goes up, the cost of low-wage workers should hire less workers, but in practice this basic theory may be wrong, Plumer B (2013 ) Says. Like most recent UC newspapers using Berkeley which is the difference of the border, many other people such as high minimum wage and high unemployment rate did not find an association between high minimum wage and high unemployment rate .