There is overwhelming evidence that raising the minimum wage has significant benefits for society and the economy as a whole. In fact, every 1 euro increase in the minimum wage results in 85 eurocents in additional consumer spending. This is money that go directly to families, supporting them during times of financials uncertainty or hardship. The flip side is also true; studies have also shown that raising the minimum wage creates greater demand for workers, helping to reduce unemployment and create more opportunities for those who desperately need work. Therefore, increasing the minimum wage is a worthwhile and beneficial policy that can strengthen society and help those in need.
Minimum wage increase means advantages for workers, businesses and society
Raising minimum wage has a plenty of advantages for workers, businesses, society, and the state. From reducing the poverty and improving the standard of living to boosting economy, minimum wage is an effective mechanism that should be used in times of recession and instability.
It is not a secret that the minimum wage has failed to keep up with inflation, raising costs of living and pay gap between workers and executives. Low-wage workers are not benefiting much from their productivity and economic growth while the richest are the group that benefits most. It is not possible to justify such situation as economic growth shall mean that all people are benefiting from it, including minimum wage earners. By raising the minimum wage, the state can improve the overall standard of living for all minimum wage workers. This would help them due to fact of providing more appropriate income to handle the living costs that significantly increased, and this can lead to reducing poverty level through lifting out of poverty more individuals and families.
Higher wages mean higher morale and higher level of engagement. If employees are thriving, they are more engaged, productive, and satisfied. These are some of intangible benefits that could transform into tangible benefits for employees and companies as well as for the society. Higher wages combined with good working conditions and empathy would spur workers to be more engaged and work smarter. If jobs are not moving workers out of poverty, why they should put more efforts? Why should they maximize their efforts into their job duties? Workers are not lazy as some argues. They need good working conditions, an employee-friendly environment, and better wages. If their work will help them to keep them out of poverty, they will be more engaged and focused on it. Better worker morale can also translate into more benefits such as reduced hiring and training costs. Workers who are satisfied at their work and treated good are less favorably to leave the company. There is a huge hidden expense to companies that have problems with employees who are leaving companies: hiring expenses, training costs, relocation expenses. Such costs would be significantly reduced if current employees would be happy to stay at companies.
Minimum wage raises have positive implications for low-income households as well as the economy as a whole. By increasing wages and providing more economic security for low-income families, a higher minimum wage reduces poverty and allows individuals to spend more time and money on education, healthcare, and other necessities for themselves and their families. Increased spending also benefits the broader economy by increasing GDP and creating new jobs for low-wage workers.
Boosting the economic growth
Another advantage of raising the minimum wage is boost to economic growth. Raising wages means workers have better purchasing power and consumer spending increases along with wages. In fact, as increase of the minimum wage puts more money in pockets of workers, workers would increase their consumer spending. These money would flow to retailers, service companies and other businesses. As a results, the increased purchasing power would positively affect financial condition of companies and significantly boost the entire economy and boosting the economy would be beneficial to the whole society. It is important to acknowledge that raising the minimum wage wouldn’t impact the employment by compelling employers to cut jobs. For minimum wage increase there is no statistically significant negative effect on employment.
Additionally, with raising the minimum wage it is important to increase the basic exemption too to ensure that raising the minimum wage would result in more money in workers pockets.
Minimum wage earners are people that are the most affected by inflation and increasing costs of living. Low-wage workers deserve a pay raise to lift them and their families out of poverty, and it is impossible to move forward while leaving them behind.
Increasing the minimum wage improves employment opportunities for those at the bottom of the income scale while also reducing income inequality. These economic benefits are consistent across different populations and regions and are likely to continue for as long as the minimum wage is raised consistently over time.
A higher minimum wage provides families with a greater amount of disposable income that can be used for essentials such as food, housing, and healthcare. This increased purchasing power help boost the local economy by creating new jobs for workers who previously had to rely on public assistance to make ends meet. Additionally, higher wages enable workers to purchase goods and services from local businesses, thereby strengthening local economies and promoting community growth. Finally, an increase in the minimum wage increases educational attainment among low-income children by reducing household stress and improving parental mental health. Therefore, an increase in the minimum wage is not only beneficial to the individuals receiving the pay increase but to society as a whole as well.
Society, in return, benefits from higher minimum wage through improved access to high-quality public education and affordable health care programs for low-income residents. This shift will result in long-term benefits for these individuals as they will gain access to quality education and increased opportunities to become economically self-sufficient and successful member of society. Furthermore, studies have found that increased wages stimulate economic activity as consumer have more money to spend in the economy and new businesses are created as a result of increased consumer demand. Overall, a higher minimum wage not only benefits low-income families, but also has significant implications for the broader economy and the society.