Minimum Wage

While considering a hypothetical situation, let's imagine that a bill is being proposed to increase the minimum wage to $15 per hour in a specific location. The proponents of this theory affirm that low-income workers will exit poverty, inequality will decrease, and economic activities will go up, inducing a multiplier effect. They believe that as a result of this policy, more people will be working and able to support themselves and their families, resulting in lower social benefit needs. Nevertheless, opponents voice objections linked to the prospect of job decrease, especially for businesses succeeding in the narrow profit margin model. They protest that it is possible that prices for goods and services can be increased due to labor costs, which makes it harder for consumers to realize benefits from the wage boost.

Example

Nationally, the minimum wage in a particular district was hiked to $15 an hour in a recent legal act. This shift aimed to reduce the gap between rich and poor workers and have a basic salary for the poor. If Jane were a single mother with a full-time job in a fast-food restaurant, this wage increase would mean she would have more ability to provide her family's basic needs and help them live healthier lives. Unfortunately, the restaurant owner was forced to tighten the belt as he had to reduce the employees' working hours or increase card prices. Regardless of the initial worries about job losses, Jane and many others realized an improvement in their financial stability that emphasized the possible benefits for the employees who were rather unwilling to exchange jobs with the machines, which had become an additional burden for businesses to adapt to the new economic environment.