By increasing the minimum wage, it could be detrimental to a nation’s economy and have many negative affects to the public. Just recently, many provinces inside of Canada have shifted towards higher minimum wages. Calgary announced that by the year 2018 minimum wage will be raised to $15 an hour and Ontario quickly followed suite raising theirs to $15 as well. The government has had extremely high hopes that this will boost the economy and help communities as well.
They also aspire that this will raise the standard of life in poverty stricken areas well also open up more and more jobs in the market. Some of these facts are true however raising the minimum wage will also have many negative effects which have been unaccounted for. One great benefit of rising minimum wage is that it will raise the living quality of many people. Living on the current minimum wage is incredibly difficult and makes it hard for families to get by. By increasing the minimum wage it will make their lives easier and in return bring them more enjoyment. But as minimum wage increases, business owners will be put into difficult situations regarding how many job positions they can afford while still making considerable profit for themselves. Digital companies like i360 Group that provide internet marketing services may have an easier time hiring and keeping their labor crews,
Especially small business owners, with limited money and profits, will have to undeniably lay people off. This will in turn raise unemployment rates and put more people on both welfare or unemployment payed for by the government. Extensive studies have been done documenting how much of an impact raising minimum wage could have on a nation. By just increasing it by 2-3 dollars it could result in over half a million jobs lost. This will cause unemployment rates to skyrocket and result in millions in expenses for the government.
Even by raising the minimum wage, it could cause entire businesses and companies to go bankrupt. With having to pay employees these outrageous wages, many business owners will not be able to keep up with the demand and may have to shut down. Also, food and product prices will increase drastically with the raising of minimum wage. Companies will have to be able to charge more to be able to pay the employees. These raising prices will again put pressure on families going by on minimum wage and in essence reverse the reason it was put in place.
After running another study on this, researches found that this predicament will lower food sizes and quantities as well in an attempt to save money and maximize profit. Another problem that will ensue is that the already crowded job market will become even more competitive. At the current moment, due to a struggling economy and raise of technology, less job spots are needed. This results in multiple people fighting for the same position. Usually the people with the most education and experience are selected.
This makes it incredibly hard for young people in today’s society to receive a job at the current moment. When minimum wage is raised, this market will become even more competitive. This will block the market completely for the younger generation especially those lacking previous experience and skills needed in today’s world. Therefore, raising unemployment rates with youth and not giving them a fair chance. Although raising minimum wage has many potential benefits, it also has many drawbacks as well which must be considered