Argument opposing increasing minimum wage Although most experts argue that the minimum wage should be increased relative

Argument opposing increasing minimum wage

Although most experts argue that the minimum wage should be increased relatively, there are several reasons why the minimum wage should not be increased. Firstly, numerous small businesses in the US are struggling to break even and meet the increased costs of operations. When minimum wages rise, the labor costs will also increase relatively, making the companies unable to meet the operation costs. This will lead to the ultimate closure of such companies. (Levin-Waldman, 2018). 

There will be job losses, and then minimum wages will increase relatively since companies will have to cut down on operation costs or break even. The cheapest alternative will be freezing the hiring process or retrenching some employees. This could lead to low job availability, increasing the suffering of the American people. Additionally, there will be relative inflation when the minimum wage increases since the production costs will also increase, meaning that companies have to increase the prices of their final products to cater to the high production costs. (Zatz, 2009). Therefore, the costs of products will increase, which will have an adverse impact.

When the costs of labor increase, companies will have to look for a close substitute to labor that will be cheaper and more efficient. For example, companies are currently capitalizing on automation of services. For example, companies like Amazon and Apple use AI and robotic machines creatively to cut down operation costs while increasing efficiency. When more companies invest in technology, it means humans will have to look for other jobs that they are probably inexperienced in.

The unskilled workers, especially the youths, will suffer due to the increased minimum wage rate. Companies will only be interested in hiring a few very skilled professionals. Fewer companies will be willing to invest in new graduates and talents, making it difficult for the youths to secure good jobs. Finally, the customers will demand fewer products when prices increase, meaning that all companies will suffer equally.

References

Levin-Waldman, O. M. (2018). Restoring the middle class through wage policy: arguments for a minimum wage. Springer.

Zatz, N. D. (2009). The minimum wage as a civil rights protection: An alternative to antipoverty arguments. U. Chi. Legal F., 1.