Question

On a short essay, discuss the pros and cons of minimum wage .Your discussion should, at the minimum, include what a living wage is, the impact on the employer, employee, and society when a living wage is paid and when it is not, and your thoughts on the topic

Answer 1

LIVING WAGE 

Introduction

Living wage is the minimum wage that must be paid to all employees for continuing their daily living. The study will analysis the pros, and cons of living wage, along with a description of the concept. Moreover, its impact o employers, employees, and society will be explained followed by a conclusion.

Analysis

Pros of a living wage are as follows:

• Improves workers morale

• Encourages economic growth

• Improves employment opportunities

• Reduces employee turnover

Cons of a living wage are as follows:

• It is stressful for small business owners

• Increases labor cost

• Does not completely guarantee the reduction of the poverty level

• Possibility of the expansion of the underground economy

Living wage refers to the minimum income that can help to afford adequate food, shelter, and basic necessities to an individual or a family. A living wage should satisfy all the basic necessities of a person including his food, lodging, healthcare, and clothing.

The living wage has a positive impact on the employers. It has helped them improve efficiency in the recruitment and remuneration policies. Employers of more than 76% of the organizations have responded positively in favor of living wage.

Living wage also has a positive impact on employees. It increases employees’ morale, health, and service quality. Moreover, it reduces employee turnover because of a high employee satisfaction level. On the contrary, an unpaid living wage decreases the motivation level of employees. Unsatisfactory level of employees increases that result in huge employee turnover.

The living wage has also a positive impact on society. It establishes equity in the wage structure. Employees are paid according to their effort that helps to balance the social classes. On the contrary, an unpaid living wage creates workplace issues which leads to class issues and creates class distinction.

Conclusion

The study has explained about the importance of living wage. Unpaid living wage increases workplace dissatisfaction which leads to rapid employee turnover. Thus, it is important to pay living way to all employees for maintaining workplace equity, balance, and low employee turnover.