Would a minimum wage trap people in poverty?

[Mellorando]

If the wage increase is large enough, poor people's incomes will rise, lifting them out of poverty. ... An increase in the minimum wage may cause some employers to lay off workers. If these workers live in low-income households, poverty may increase, at least in the short term. Most people believe that the economy aggregately benefits from increasing the minimum wage. Many studies do indeed show low-wage workers are pulled out of poverty. But others show that some workers, including the poor, lose their jobs from increases in the minimum wage, creating yet more poverty.
Nevertheless below and the advantages and the disadvantages of minimum wage:

Advantages:
1. It can be helpful depending on the type
of market.
2. It can help with reducing tax burden
3. It can help certain families.
4. It can help with setting small business
budgets.
5. It serves as an employment incentive.
6. It is a common reference when hiring.

Disadvantages
1. It can disrupt the economic system
2. It can hurt the poor.
3. It can create unemployment
4. It does not offer personal-growth
opportunities
5. It reduces other job benefits.

 

[goodmoneygoodlife]

I think min wage should be increased. But the rate of the increase should be gradual to minimize layoffs.

If someone gets fired due to min wage increase, they should be able to find another job soon enough. The reason's because if min wage is increased, then inflation comes with the wage increase (i.e. everything costs more). Businesses charge more money for their goods and now have enough money to pay a higher min wage, and they start hiring again.

Other words: layoffs / hiring are a cycle. The problem is that people in poverty might not necessarily be able to survive that cycle. Thus, while raising min wage is a great thing for the economy and the world in general, it needs to be eased into so that the economic shock for businesses is low enough to minimize layoffs.

 

[Alexandoy]

Poverty is defined as when the income falls way below the expenses in regularity. That means when you are earning the minimum wage of 500 pesos a day (that's $10) and your daily expenses on the average is $12 then you are in poverty because you do not have even a single dollar for your savings. In reality the people in such financial situation would be borrowing money until they are saddled with debts that later on they would be losing their assets such as the car or even the home.

But not all minimum wage earners here can be considered in poverty. A neighbor who has 2 kids have a better life than others because they live free of rent in their parent's house. They are also choosing with the spending that they have money in the bank no matter how little. They are saving for the education of their children which is wonderful. If you do not spend for things that you cannot afford then your income will help you get out of the poverty level.

 

[Mataracy]

Increment in wages is very good in the company or government parastatals because it will encourage workers to work very hard and always trying to achieve the goals and objectives of the organization.
Increase of wages also help poor worker yo raise their standard of loving at least little note than before.
And it will make life more easier for them because they will be able to meet up more expenses they usually incurred .
Though there are some company that it will affect mainly because there is no note on grand to pay their workers and by do so doing they will started laying off some if the workers.
In this case its only affect some company that do not generate good income because if they are able to generate good income in that company there is no need for them to be sacking their workers.
If they company employ competent hand there is no meaning of panic because of the increment in wages of their workers.

 

[arunima25]

There has to be a gradual organic raise in the minimum wage and that should keep a lot of factors in mind including the market and the current inflation rate. Also it should depend on the demand and supply in that particular field and skill. A steep raise is not pragmatic and ir might bring adverse effects and rather make the poverty condition worse.

 

[Caramelle]

Our government implements minimum wage which many workers decry as being too low considering the ever-increasing costs of living. While it is politically expedient for the government to simply give in to the workers' demands, it also has to strike a balance between the workers' needs and that of the employers as these are both crucial in the country's economy. Increases in minimum wage will benefit many workers but it could trigger layoffs and unemployment for some. It will likely encourage businesses to favor investing heavily in machines. It will lead to higher prices of goods and services as well, further reducing the purchasing power of all consumers.

Will it trap people in poverty? Increases in the minimum wage may not have disastrous consequences in highly developed countries that can easily absorb such increases and in places where workers are actually receiving more than the mandated minimum salary. It will hit harder in developing and underdeveloped countries where formal jobs are already scarce. Foreign investments in these countries may slow down, leading to job losses. It may still not trap people in absolute poverty if the government has socio-economic programs that provide benefits and financial assistance to temporarily unemployed workers and to the marginalized sectors of the economy.​

 

[arunima25]

Our government implements minimum wage which many workers decry as being too low considering the ever-increasing costs of living. While it is politically expedient for the government to simply give in to the workers' demands, it also has to strike a balance between the workers' needs and that of the employers as these are both crucial in the country's economy. Increases in minimum wage will benefit many workers but it could trigger layoffs and unemployment for some. It will likely encourage businesses to favor investing heavily in machines. It will lead to higher prices of goods and services as well, further reducing the purchasing power of all consumers.

Will it trap people in poverty? Increases in the minimum wage may not have disastrous consequences in highly developed countries that can easily absorb such increases and in places where workers are actually receiving more than the mandated minimum salary. It will hit harder in developing and underdeveloped countries where formal jobs are already scarce. Foreign investments in these countries may slow down, leading to job losses. It may still not trap people in absolute poverty if the government has socio-economic programs that provide benefits and financial assistance to temporarily unemployed workers and to the marginalized sectors of the economy.​

You have rightly said that striking a balance is the key. And it does vary from country to country depending on their socioeconomic status. But every government has the responsibility to make a law around minimum wage so that the people are not exploited by the employees and they have a law protecting their rights.
Now managing that balance is the trick and government have to play it safely. Modt oe these minimum wage earners work for unorganised sectors especially in a developing and underdeveloped country. And that makes the job even more tricky.

 

[moonchild]

Yes, minimum wage has already trapped people into poverty since because your income will always supersede your expenses, in my country minimum wage is just below 66$ per month, just imagine, how can a human being live with this amount comfortably In a month, I'm talking about an individual here not a household but you'll see people with two kids or four kids living with this tyee of income monthly how can we achieve stability this way.

The problem of this is, people will be raised in perpetual failure and they will continue to wallow in it and before you know it a generation is gone down the drain in poverty.

I'm not even asking the government to increase the minimum wage no, what should be done is an industrial revolution, we should make the country attractive to investors all around the world especially the Asian market to invest in our human resources and if they do all manual jobs will be outsourced to us and people will no longer have to leave on minimum wage and they would be able to take care of themselves and their responsibilities.

But if we continue pressurizing the government to increase minimum wage then the economy will suffer big time

 

[Richee84]

Minimum wage for the Labour force in a country with stable economy and good standard of living will affect the life of the worker in the country positively. For a country with a bad or unstable economy and and also experience high inflation, the minimum wage will become meaningless as the minimum wage will not have any purchasing power in the market. Minimum wage is usually meant to better the life of workers in the country or improve their standard of living, but when a minimum wage is been implemented in a country where the level of inflation is very high and standard of living is very high then the minimum wage will not be able to achieve it core objectives to better the life of it labour force.. For a minimum wage to be effective in a country that is not economically stable and also battling with high inflation then the government of that country must be ready to do upward review of it labour law to increase the minimum wage base on the situation of things in the country or else the life of the worker will not be meaningful as the aim of the minimum wage to better their life will not be achieve.

 

[arunima25]

Minimum wage law is implemented by the government to prevent the people from getting exploited by the employer. The law is implemented in many countries but the effectiveness of the law is still questionable. It might serve a purpose in the employments that are structured and transparent with their payments to the employees. But in countryes that are developing or underdeveloped, this law might have been implemented but not so effective. There is poverty and so many end up doing menial jobs in unstructured sectors. Poor people can be exploited to work at lower wages and they have to accept that as they struggle with poverty and having a decent square meals. And many of them are not aware of their rights about minimum wage and don't fight for it. Unstructured sectors don't face a strict scrutiny when it comes to such laws. And even when these poor know that they have a right to ask for minimum wagr, they don't. Their time and effort goes to earn livelihood and put a decent meal for their family. Only when the basic needs are fulfilled,one can have the energy to fight for rights.
So, just having a law is not enough.

 

[Ithedicious]

This advantage can only be observed in a situation in which there is no employment and people are just struggling for the available employment for survival.

There is how the government can increase the minimum wage of people and at the same time also increased the the establishment of industries for people to work in , that is how the economy of a nation can be boosted.