The minimum wage is one of the many political-economic systems measures that work to redress the economic imbalance. It is the minor salary that an employer must provide to their workers at any given time. Many have strong feelings regarding the minimum wage principle, which is a contentious subject. It depends on a few aspects, including the living standards of the lower class and the influence on jobs that a labor surplus might cause. It can also affect the quality of an economy’s human capital whether or not this ongoing discussion occured. Although the minimum wage contributes to reducing income disparity, it should be eliminated because it worsens unemployment, violates the Constitution, and does not encourage healthy competition.
The lower class cannot live comfortably because of the minimum salary. The top class, middle class, and bottom class are the three classes that Americans believe in. Social class is the division of people into visible social classes supported by money, income, education, occupation, and social connections. Health, family life, and education may all be impacted by one’s place in the social hierarchy. It is evident that socioeconomic status (SES) is linked to specific opportunities and resources and describes a person’s position in order (Harasztosi & Lindner, 2019). The best socioeconomic group or layer is referred to as the upper class; members of this group typically possess exceptional wealth and influence. The lowest socioeconomic group, which includes persons with poor status, income, and education levels, is known as the lower class. The middle class, which sits between these two classes, is also mentioned.
Education and professional achievements determine one’s place in a particular social class. According to research, teenagers from low-SES families and communities develop their academic skills more slowly than those from higher-SES groups (Cengiz et al., 2019). Sometimes there needs to be more funding for school systems in low SES areas, negatively impacting the children’s academic growth and results. According to several studies, people from lower social classes often exhibited weaker career-related self-efficacy regarding their desires for employment (Manning, 2021). Children who grow up in an economic environment with better facilities have more money saved for employee training. The federal minimum wage (FMW) was established to stabilize working people’s wages by assisting them in making ends meet so they could afford to house (Gindling, 2018). The FMW no longer pays workers enough to cover the costs of housing and utilities for households making the minimum wage.
Due to the absence of affordable health care, many states have tried to overthrow the Affordable Care Act, which might cause a family’s savings to be destroyed and force them to live on the streets (Dustmann et al., 2022). A person on minimal pay cannot possibly win that war. The suggested increase would only slightly improve the minimum wage laborers’ life. The minimum wage can impact the level of human capital in an economy. Employees’ knowledge, skill sets, and experience in an economy are referred to as human capital. Because a skilled workforce will result in increased output, skills have economic worth. Realizing that only some have the same abilities or knowledge is what the concept of human capital is all about. Raising the employment standard by investing in people’s education is possible. There is a strong correlation between human capital and economic growth. Human capital impacts economic growth and can enhance a country’s economy by strengthening the knowledge and skills of its citizens. Economic growth is an increase in an economy’s capacity to generate goods and services compared to earlier periods.
In conclusion, the minimum wage debate is still important in our society because it has both positive and harmful effects on living standards, employment opportunities, and the economy. By encouraging consumption, the minimum wage promotes economic growth in a nation. Although it might improve the standard of living for low-income people, it still depends on the labor market’s structure. While a significant rise may result in employment, a modest increase does not affect a career. This demonstrates that the minimum wage is still an important topic.
References
Cengiz, D., Dube, A., Lindner, A., & Zipperer, B. (2019). The effect of minimum wages on low-wage jobs. The Quarterly Journal of Economics, 134(3), 1405-1454. Web.
Dustmann, C., Lindner, A., Schönberg, U., Umkehrer, M., & Vom Berge, P. (2022). Reallocation effects of the minimum wage. The Quarterly Journal of Economics, 137(1), 267-328. Web.
Gindling, T. H. (2018). Does increasing the minimum wage reduce poverty in developing countries? IZA World of Labor. Web.
Harasztosi, P., & Lindner, A. (2019). Who pays for the minimum wage? American Economic Review, 109(8), 2693-2727. Web.
Manning, A. (2021). The elusive employment effect of the minimum wage. Journal of Economic Perspectives, 35(1), 3–26. Web.