There is pressure from certain organizations (such as workers’ labor unions) to increase the minimum wages to $15 per hour.
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Why Is This an Issue?
Increasing the minimum hourly wages is an issue because there are numerous workers whose wages are lower than the proposed minimum level. This means that these people cannot make a living on their salaries. As a result, they have to either depend on their relatives or to economize on everything, including not only lodging but also food and medical services.
This problem has become an issue due to the pressure exerted by some organizations such as workers’ labor unions. The unions have launched a campaign of protests aimed at promoting the idea that minimum hourly wages have to be increased to enable all workers to earn their living. It is stated that there is no way in which workers would produce a value of less than $15/hour for their employers and still be working in their positions. It is stressed that workers generally produce much more value than that, so employers can afford to pay at least $15/hour, which, though still a small sum, might help some people make both ends meet, thus reducing the levels of poverty in the society. The unions have caught the attention of the media, making this problem a pressing issue these days.
Risks and Considerations
The newest research suggests that increasing the minimum hourly wages has a positive impact on the population’s health and the levels of poverty, whereas its negative effects on unemployment are doubtful (Belser & Rani, 2015; Lenhart, 2017). According to Lenhart (2017), greater minimum wages are associated with considerably lower overall mortality rates, as well as with fewer health problems that are often experienced by persons who have low socioeconomic status (such as cardiovascular diseases or diabetes). It is also concluded that better minimum wages may allow for reducing the levels of poverty and enhancing the access of the population to medical services (Lenhart, 2017).
The traditional point of view holds that minimum wages may hurt the overall levels of unemployment. It is often believed that introducing or increasing minimum wages may cause organizations to dismiss their workers due to the inability to pay them. However, Belser and Rani (2015) argue that, while sudden or too rapid increases in minimum wages may indeed hurt employment, raising the minimum wages more gradually and to a balanced level have no considerable impact on employment, but can be an effective tool in lowering the levels of poverty and reducing inequality (Belser & Rani, 2015). It is also quite clear that the reduced levels of poverty might have a bolstering effect on the economy because of the increased purchasing power of consumers.
On the whole, it is recommended to raise the minimum wages to $15/hour. This will not only satisfy the demands of the protesters, but also may reduce the levels of poverty, lower the inequality, and increase the health of the population. The proposed level of $15/hour is a reasonable level for the current situation; the existing minimum wages are too low, whereas the proposed $15/hour is not excessive. However, to reduce the impact on businesses, it is recommended to announce the increase in advance to give businesses several months to prepare for the new legislation. It is also paramount that new policies should be adequately enforced (Belser & Rani, 2015).
Annex: Other Options Considered
An alternative to increasing the minimum wages is offering social help to households whose income per capita is lower than the poverty threshold. The stated social help needs to allow these households to overcome the poverty threshold. However, implementing this policy might require significant additional spending from the budget of Nova Scotia.
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Belser, P., & Rani, U. (2015). Minimum wages and inequality. In J. Berg (Ed.), Labour Markets, institutions and inequality: Building just societies in the 21st century (pp. 123-146). Cheltenham, UK: Edward Elgar. Web.
Lenhart, O. (2017). The impact of minimum wages on population health: Evidence from 24 OECD countries. The European Journal of Health Economics, 18(8), 1031-1039.