Question

HOW INCREASING THE MINIMUM WAGE MAY (OR MAY NOT) BE THE SOLUTION TO PREVENT LIVING IN PRECARIOUS FINANCIAL SITUATIONS. (100-300 words)

Answer 1

I believe increasing the minimum wages will definitely be a solution to prevent living in precarious financial situations.

Minimum wage refers to the government mandated wage rate which is set above the market clearing wage rate, with an aim to increase worker standard of living by offering them higher wages.

Although opponents of this policy believe that increasing minimum wage leads to greater unemployment as employers try to fire employees in order to keep their cost of production low.

However, what needs to be looked at, is that higher wages to one section of workers will help them have a better financial situation, and their children and families would be more educated and thus capable to getting themselves better jobs, thereby coming out of the poverty trap.

Coming to the unemployed workers, those who are laid off due to minimum wage would try to upskill themselves in order to get better quality jobs as compared to before, thereby making themselves better off in the long run, as they are able to find themselves better quality jobs.

Thus, one can strongly say that minimum wage is a good solution to help workers by preventing them to live in precarious financial situations.