Question

What do you think the likely outcome will be with a higher minimum wage? Why do people work for minimum wage?

Answer 1

According to my own perspective i believe the likely outcome of the raise in minimum wages could be as follows:

Stimulates businesses growth:

Although it has been a common argument that if there will be a raise in the minimum wages the small business will not be able to flourish due to increase in its operating cost which usually outweighs the benefits of these small scale businesses.
However i believe that increase in minimum wage will now attract the top talents (who previously didn't preferred to work in small orgns) towards the small organisations also as the compensation now paid is more which results in increase in business activities , efficiency , and thus resulting in increased revenue and profits , eventually stimulating the business growth.

Increases Productivity

Due to the raise in minimum wages now more workers will prefer to enter in the labour market. Moreover now when the skilled workers will be available with better compensation policy the efficiency in utlization of resources will be more and output will considerably increase. Further the increased pay will motivate the previously discouraged employees to now work better and perform tasks effectively to accomplish set targets.

Price Increase:

The another important outcome that i believe will occur due to raise in minimum wages will obviously be the price increase as due to increase in pay the ultimaye burden of increase in production cost will be transfered on the shoulders of customers in the form of higher product price .

Decreased sales

When prices of products will increase the product might no be afforded by many customers which will result in decreased sales and decreased revenue.

Some reasons that i have personally identified to be the reason of working for minimum wages are:

To support the college fee or pay the education loan , the students who cannot otherwise afford it , and not so skilled and demanded might work for part time in small orgn's for minimum wages

The trainee's who want to gain some practical experience at business or learn some operational activity , for attaining some skill set might work in small scale organisations for minimum wage .

The workers who belong to backward community , having no particular skill , and have got no education might work in factories for their living.

People who have made some bad choices in life and don't have any other option left or are risk averse and don't have room to take a risk on a new job.

The individuals having low esteem , don't believe they can do anything else .

Dear student hope i explained well...good luck

And sorry for typing mistakes ..

:)