Poverty has been one of the world's major issues in all 195 countries. Even powerful countries such as the United States, China, Russia, and Japan are not immune to this challenge. One of the main causes of poverty is a lack of jobs in the country, and if they do have jobs, their pay is based on the minimum wage, which is comparatively lower than the cost of living in the country. Raising the minimum wage will seem to alleviate or even eradicate poverty, but it will primarily benefit employees rather than companies, perhaps reducing the number of jobs available and might just increase the number of people who are in the poverty area.
According to Prompt 3, the minimum hourly wage is around $5.50 and for a person working forty hours per week for an entire year would end up having an annual income of about $11,000. A suggestion of increasing it to six or seven dollars per hour was raised and one said that why not $45 or $450. This might be what every employee would be thinking as the solution to reduce poverty or eliminate it but it is not realistic as per Karl said in the prompt. I agree with him because if you increase the minimum wage, the rate of hiring or the number of hired workers would eventually decrease and the low-skilled employees would take the big hit since employers would rather hire a more skilled worker to multitask two to three responsibilities in a company. The claim that raising the minimum wage to $6 or $7 an hour won’t reduce low-skill employment is not consistent to the claim that a higher minimum wage, $450, would reduce low-skill employment because the former would not affect the employers’ income drastically compared with the latter that will extremely affect the income. The very low skilled workers are the ones to be mostly harmed by an increase in the minimum wage because instead of hiring for example five low-skilled employees for each job, the employer would just hire one to two higher-skilled workers to maximize the salary.
Raising the minimum wage would reduce on-the-job training for minimum wage workers and eventually slowing the growth in their wages is due to the fact that employers would rather hire experienced workers ate the increased minimum wage to maximize the salary they are giving to the worker rather than teaching a freshly graduate employee at the same price. This would eliminate the hassle of teaching a neophyte in the job and increasing the productivity of the company rather than lagging for a period of time because of the inexperienced worker. This phenomenon would slow the growth of fresh graduates and might affect their employment that would eventually increase the unemployment rate thus increasing the poverty rate of the country.
Lastly, higher-paid and more skilled workers would find a higher minimum wage rather than the low-skilled workers in the same field due to the fact about the disparity between their skills. Low-skilled workers would produce less rather than the higher-skilled workers thus employees would give a better compensation to the higher-skilled workers even though it is in the same field.
Works Cited
"Countries in the World:." How many countries are there in the world? (2017) - Worldometers. N.p., n.d. Web. 08 Apr. 2017.
