The Effects Of Higher Minimum Wage

Impact of raising minimum wage When I was eleven years old, my parents told me that in that year, I could not afford to wear a new uniform. So, I craved for some new school uniforms and I started to work. I did a strange job for my family, friends, and babysitters on the farm. I will work throughout the summer through grade 6, and I will continue to work every summer until I begin working full time at high school. When I was thirteen, I began helping my parents' house and bought the majority of food when I was young.

However, if the minimum wage is high, there is a possibility of adverse effects. Several SMEs hire minimum wage workers and have low profit margins. If the minimum wage is high, the operating costs will rise and companies may be unable to expand their business, so these companies may be forced to hire fewer workers. In addition, they may be forced to lay off employees to compensate for the increase in operating costs due to the rise in minimum wages. Likewise, as the minimum wage increases, some small and medium-sized enterprises become unprofitable and may be obliged to close the business. All of these conceivable impacts could adversely affect the employment situation of small and medium-sized enterprises and minimum wage workers.

SMEs are extremely important to the economy and employment opportunities of Ontario; therefore, the possibility of higher minimum wage impact on their business and employment creation must be properly emphasized. However, large companies hiring workers at or near the minimum wage do not have a negative impact on the business, as the minimum wage is high. Another negative impact from raising minimum wages is that companies can replace workers with automation. As the minimum wage is high, personnel expenses increase, so there is a possibility that the recruiters' economic profitability will decline as compared with automation. Several companies' machines are important competitors for human workers, especially computer prices. By introducing a self-service kiosk, the fast food industry is vulnerable to automation.

How can we achieve such a dramatic improvement in living standards without adversely affecting employment? The answer is that the growth in minimum wage is likely to result in negative and positive employment effects. Higher minimum wages lead to some automation, increased worker productivity, and slightly higher prices, but these are negative. Increasing the minimum wage also lowers the turnover rate of employees, which lowers the cost of employers, enhances the purchasing power of workers and stimulates consumer demand. These are positive effects. In California and Fresno County, these adverse effects on employment are in a positive relationship.