The debate on behalf of raising minimum wage has more reasons to support. As per the latest address made by President Obama, he is reluctant to increase the minimum wage scale of $7.25 to $10.10 in hourly basis. It is a big leap in terms of raising wage and the increase this time is about 40%. While president is hopeful and ascertain that this raise would benefit workers and directly benefit US economy, the options have something else to say against this raise. Let’s get a clear idea looking at some of the major benefits of raising minimum wage.
1. The Raise Would Act as an Economic Stimulus
If everything goes right and US Government implement this new policy, the economy will get the benefits as the workers will then have more money to spend. The workers’ ability to spend more has a direct impact to the nation’s economy. The concurrent economy will get a healthy boost of dynamism with the policy of raising minimum wage.
2. Lower Expenditure in Social Programs
Workers who run their families at a minimum wage needs more financial help from government. They rely on government organized social programs in order to support monthly expenses of their families. Raising the workers’ minimum wage would make them more self-reliant in supporting their families. They will less likely require any additional government help in form of social programs. So, government can save a hefty sum that they spend on various social rehabilitation programs.
3. Substituting Economic Inflation
The existing crisis of inflation needs to be substituted by raising minimum wage. Every year, people face an increase in economic inflation whereas wage has been increased only 3 times during the last three decades. It is an alarming fact as per the current economic condition. Raising wage would benefit stabilizing the market with the underlying inflation and instability.
4. More job opportunities
Paying an increased wage to the employees, business houses will automatically earn more in order to stabilize income and expenditure ratio. This will result in opening new job opportunities for the unemployed. People with an increased minimum wage will buy more resulting to more sales. Now, in order to handle the increased sales, companies will be bound to hire more people in order to make their sales process smooth and free from any interruption due to the lack of manpower.
5. Reduced Rate of Turnover
Employees and workers alike who are earning increased minimum wage, will eventually feel more reluctant in continuing their jobs. There will be less incidence of employees quitting due to dissatisfaction and lower income. This will effect in spending less in training new employees to fill up the position. When companies are spending less in training the employees, they will certainly earn more profit. Therefore, it is a mutually beneficial for both companies and employees together.
There are many counter statement against the raising of minimum wage. However, the reasons supporting the issue is more logical and direct the current economy to a more stable state. All these benefits will help you clear your doubts about the issue and you will certainly support this new government policy which is made for the development of the society and the economy.
