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Tuesday, November 29, 2005

 

The Minimum Wage Debate

The debate about the minimum wage is nothing new, but is it really worth it? I don't think so. While the minimum wage may seem like a great idea, it actually creates more problems than it fixes. Many supporters of the minimum wage say that it is needed because people must make a certain amount of money a month in order to survive; however, the minimum wage actually excludes people from the work force because employers can afford less workers. So while the minimum wage may be helping the employees that have jobs, it makes it so some can't even get a job. Is this what we want? If the minimum wage didn't exist, employers could pay their employees less and actually hire more employees, so more jobs would actually exist without it.

With more jobs comes greater efficiency. More employees means that things will generally get done faster, hence greater efficiency. With greater efficiency, the businesses will be maximizing their production and labor force. With minimum wage laws, this does not happen. Minimum wage creates less efficiency because employers can afford less workers. From an economic efficiency point, this makes no sense.

Many people complain about outsourcing jobs, but what do you expect to happen when companies know they can pay cheaper wages in another country? If minimum wage laws are dissolved, companies would have fewer incentives to outsource which would create even more jobs with those companies opening in the U.S.

It seems to me that no matter how you look at minimum wage laws from an economic stand point, you come to the same conclusion: minimum wage laws don't make sense. To maximize our workforce efficiency we need to eliminate the laws that prevent it from happening.

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