What Is Minimum Wage? PDF  | Print |  E-mail

What is minimum wage? Minimum wage is defined as the lowest hourly, daily or monthly wage that employers are allowed by law to pay their employees. It may also be considered the lowest wage workers may request in exchange for their labour. Although minimum wage laws have been adopted in many regions throughout the globe, there are many disparate views concerning the benefits and drawbacks of a minimum wage system. Proponents of the minimum wage argue that it increases the standard of living of workers and lessens the prevalence of poverty. Counter positions held by opponents of the wage state that if it is high enough to be effective, it also directly increases unemployment, especially among workers with very low productivity as result of inexperience or handicap. Subsequently, they believe it is detrimental to  lesser skilled workers while benefiting better skilled workers.

Minimum wages came about at a time where sweat shops were expanding and effectively exploiting the human resource. These sweat shops employed  a great number of women and young workers, paying them at a rate that was considerably below par. It was believed that the sweatshop owners had an unfair advantage, therefore incorporating the minimum wage system ensured the workers would  not be subject to this form of employer exploitation. Soon the minimum wage was broaden to focus on how it could help family life and society in general. In present times, minimum wage laws are extended to workers in the lowest paying fields.

Despite the widely accepted fact that the principal aim of the minimum wage laws are indeed laudable, debates about its general effectiveness and possible repercussions are often argued vehemently. Since the  inception of the minimum wage laws it has been plagued with much controversy politically. While it has gained support from the general public it is seen less favorably by many economists . Its integration into the society over the past few decades has not lessened the intellectually debates that still currently ensue.

Several groups have pronounced ideological, political, financial, and emotional interests regarding the controversy related to the minimum wage laws. An example of this are the agencies that administer the laws which have a clear interest in demonstrating that their laws do not create any form of unemployment. Likewise labor unions whose member base is protected by minimum wage laws. Because of these factors many arguments and findings on the feasibility of these laws may be somewhat skewed to serve a particular interest. Additionally the effects of minimum wage are hard to discern when other variables that affect unemployment and considered.

What is Minimum Wage