Minimum wages entail the wage or remuneration that an employer can give to an employee as permitted by the law. It explains the least payment that workers can sell their labor to a company or agency. It is meant to protect workers, stabilize the economy and facilitate fair distribution of resources (Neumark & Shirley, 2021). It determines the least standards of living of workers and their well-being. It is applied to avoid the exploitation of workers, particularly where they have poor bargaining powers. The minimum wage is beneficial in eradicating poverty and eliminating unfair treatment of women and minority groups. Nebraska values of caring for each other and working hard can be achieved by raising the minimum wage. This paper argues that Nebraska should progressively raise the minimum wage by $1 annually to achieve $12 an hour by the year 2024.
Raising Minimum Wages Would Boost the Economy
Raising the minimum wage in Nebraska can come with many benefits that would add value to the quality of life of every citizen. One advantage is that it can boost the economy and promote consumer spending. Every $1.00 rise in the minimum wage would help provide an additional $3,500 in consumer spending over the next year (Nebraska Appleseed, 2014). Every household would have an improved ability to meet the financial obligation and realize an improved quality of life. This would play a significant role in reducing poverty levels and eliminating common issues affecting individual families.
Economic Benefits to Business Owners
Raising the minimum wage would be associated with intangible benefits to both the employer and employee. Improved compensation is an effective method of motivating workers implying that companies would eliminate the cost of encouraging and monitoring employees. Workers would feel motivated to work hard and remain committed to the achievement of organizational goals (Agarwal, 2019). Companies could benefit from quality services and the high productivity of workers. This is because employees would develop a positive attitude towards the work and the environment, and focus on the achievement of the set targets.
The company can benefit when workers understand that their job efforts can enable them to come out of poverty since that would be a sufficient motivational drive to accomplish assignments in the best way possible. Business owners would gain a better economy by reducing the cost of training and hiring workers (Fishback & Seltzer, 2021). Improved compensation would reduce the workers’ turnover rate creating many benefits to employers and business owners. Job-related relocations would reduce since most workers are likely to be satisfied and willing to remain with their employers.
Many companies miss development opportunities upon losing skilled and competent workers to their competitors. This means that a poor-paying company could be spending heavily on training workers only for them to leave for other companies once they gain desirable skills. Raising minimum wages would help address the problem and ensure that the company pays considerable compensation (Bailey et al., 2021). This would facilitate consistent development and economic benefits to business owners.
Economic Benefits to Employees
Well-paid workers usually attain improved physical and mental health translating into reduced cost of medical care. Workers become happier when financial issues challenging them are eliminated. They feel more encouraged to pursue career advancement while working in the same company rather than seeking a different employer (Shirley, 2018). Receiving higher compensation would encourage workers to gain improved skills and stand higher chances of earning more money. Eliminating the cost of looking for new employment would come with many economic benefits to workers. Staff settled to a given company are more likely to make a long-term investment that would boost their wealth and improve their quality of life.
Raising the Minimum Wage by $1 Annually Would Benefit the Working Class in Nebraska
A boost in the minimum wage would support poverty reduction and influence a moderate increase in incomes. Nebraska Appleseed (2014) explains that a 10% rise in the minimum wage would influence a 2.4% poverty reduction. Many educated adults are serving low-paying jobs in Nebraska due to a lack of well-paying jobs and employers are not willing to pay more. In 2011, statistics indicated that about 88% of working Americans were above 20 years and they were receiving the lowest wage. At least 40% of them had college or higher education.
Raising Minimum Wage Would Promote the Value of Education
Many educated people are serving in low-waged jobs making their education irrelevant or less important. This can frustrate many young people since most of them may fail to realize the need of spending many years in school only to earn a similar wage to those who are uneducated (Clemens, 2021). Raising the minimum wage is a way of appreciating work hard and recognizing efforts made by people when learning. It is important to reward skills earned in school and ensure that learned workers are given considerable compensation (Bailey et al., 2021). This would play a role in motivating teenagers and encouraging them to make an effort to achieve higher grades in school. Moreover, students would gain interest in working beyond the assignments provided by their instructors to achieve the most marketable skills. This means that increasing the minimum wages would have an indirect beneficial impact on the learning process resulting in the generation of competent graduates.
Raising Minimum Wage Would Reduce Poverty Levels
Giving low-income earners more money would boost their ability to purchase goods and services necessary for their well-being and survival. Increasing their wages means that they would have enough to spend on their daily expenditure and improve their wellbeing (Agarwal, 2019). Providing decent jobs that pay above the poverty line is an effective way of eradicating poverty. This can help create a roadmap to economic security as more people become financially empowered. Minimum wages should be the main factor when setting policies such as medical leave, paid sick days, the Affordable Care Act, and the Earned Income Tax.
Raising the minimum wages would boost the ability of family providers to meet their financial obligations. It would present benefits beyond reducing the poverty rate through creating a multiplier economic effect. Supporting providers would make it possible for them to educate their children in quality schools (Marchingiglio & Poyker, 2019). This would ensure that they gain desirable skills and knowledge to acquire highly ranked positions that are well paying.
Educated children can improve the wellbeing of their families upon earning considerable wages. Improving the minimum wage would benefit everyone and promote equality in the distribution of national wealth. It would boost the ability of poor families to come out of poverty progressively. The ever-widening gap between the rich and poor can only be addressed by increasing the flow of money to those who are disadvantaged in society (Agarwal, 2019). This means that the government has a role to play in ensuring those who are at the bottom are promoted and assisted to enhance their wellbeing. Paying reduced wages to low-earners hinders their ability to save money for investment or start a business that transforms their economic positions.
Counter Argument
Raising the Minimum Wage Would Influence Loss of Jobs and Increase the Rate of Unemployment
Raising the minimum wage to $15 per hour would influence the loss of about 1.3 million jobs by 2025 (Congressional Budget Office, 2019). Increasing the minimum wage would encourage companies to seek labor from other countries where the cost is low. Investors would consider relocating their business resulting in massive loss of jobs. Stiff competition in the labor market would emerge as employers focus on outsourcing workers from cheaper markets.
Requiring business owners to pay their employees higher salaries would translate to increased cost of operations and limit their profitability. Companies that are struggling to survive the negative implication of the harsh environment created by the COVID-19 pandemic are likely to fail. This would encourage them to downsize resulting in the loss of jobs to millions of people in America. Closure of businesses would create a devastating impact on the economy in terms of loss of revenue taxes. A high rate of unemployment would increase the burden to the government since more people would start relying on relief food and national social support (Emory et al., 2020). Moreover, the problem would increase the rate of homelessness since many would be unable to pay their house rents.
Response to Counterargument
Modest raise in the minimum wage would have no or limited impact on the rate of unemployment. Chen (2019) argued that boosting wages would improve the quality of lives particularly for the low-income earners with little or no adverse effect. Historical events confirm that raising minimum wages does not cause an increase in the rate of unemployment. The rate was increased during the 1990-1991 recession, the 2008-2010 financial crisis, and 2001, and jobs were not lost.
Improved wages would promote the position of poor people and enable them to climb their economic ladder. This would boost their ability to start a small business that would create more jobs and reduce the pressure on the job market. This means that it will be easier for unemployed people to find jobs and help address the problem (Fishback & Seltzer, 2021). Moreover, the benefits created to those who receive better wages would outweigh the shortcoming of the few who would lose jobs. Pulling millions of people out of poverty would be a great achievement for the government and its positive implication cannot be ignored.
Conclusion
It is important to raise the minimum wages by $1 annually to attain $12 per hour by the year 2024 to support economic development, eradicate poverty and promote education value. Boosting compensation is one of the reliable methods of improving the quality of life and enhancing the economy of poor people in Nebraska. It would motivate workers and encourage them to make an extra effort to support business owners achieve their economic objectives. Workers would have more money to support their families and meet financial obligations. Moreover, increasing minimum wages would mean that workers are paid based on their educational qualifications and experience. This would give value to education and ensure that earned skills are recognized.
References
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Bailey, M. J., DiNardo, J., & Stuart, B. A. (2021). The economic impact of a high national minimum wage: Evidence from the 1966 Fair Labor Standards Act. Journal of Labor Economics, 39(S2), S329-S367. https://doi.org/10.1086/712554?
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Nebraska Appleseed. (2014) The benefits to Nebraska of raising the minimum wage. Nebraska. Retrieved April 20, 2021, from https://neappleseed.org/wp-content/uploads/downloads/2014/02/NE-Appleseed-Minimum-Wage-Fact-Sheet.pdf
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