Raising Minimum Wage Negatively Affects Business Growth
How Raising Minimum Wage Negatively Effects Business Growth
Can raising minimum wage destroy a business?Minimum wage is pay covered for nonexempt employees. In Illinois, that rate is currently $8.25 per hour. There are both pros and cons within the minimum wage system, however, I believe the raising the minimum wage would do more harm than to to our economic system. Some negative effects include; revenue loss, a decrease in customers, loss of production, and decreasing stocks. Additionally, raising the minimum wage can drastically effect small business owners in negative ways.
A business can lose money by raising minimum wage. A small business with at least 20 workers at or close to the exact minimum wage will have its labor costs increase by $45,000 next year alone. A business will have to raise prices to pay their employees more. If a store had extremely high prices, would you go there to buy products? Most people avoid high prices so they go to another business, which causes the small business owners profits to fall. Businesses that raise minimum wage every year lose money with each increase.
By raising minimum wage, a business can lose production by the loss of their workers. Raising the minimum wage means, you then have to lay …show more content…
However, I believe positive aspects are minimal. For example, increasing the minimum wage does not reduce employment, and it does not run counter to dozens of credible studies by economists that show a negative (though modest) effect. There are also a few recent studies showing no effect at all, generating some doubt about exactly what will happen.
The risk of employment loss for several hundred thousand low-wage workers, in an already soft job market, should not be dismissed. The very large minimum wage increases now occurring in many states and localities will almost certainly drive some employers across their borders toward lower-wage
Can raising minimum wage destroy a business?Minimum wage is pay covered for nonexempt employees. In Illinois, that rate is currently $8.25 per hour. There are both pros and cons within the minimum wage system, however, I believe the raising the minimum wage would do more harm than to to our economic system. Some negative effects include; revenue loss, a decrease in customers, loss of production, and decreasing stocks. Additionally, raising the minimum wage can drastically effect small business owners in negative ways.
A business can lose money by raising minimum wage. A small business with at least 20 workers at or close to the exact minimum wage will have its labor costs increase by $45,000 next year alone. A business will have to raise prices to pay their employees more. If a store had extremely high prices, would you go there to buy products? Most people avoid high prices so they go to another business, which causes the small business owners profits to fall. Businesses that raise minimum wage every year lose money with each increase.
By raising minimum wage, a business can lose production by the loss of their workers. Raising the minimum wage means, you then have to lay …show more content…
However, I believe positive aspects are minimal. For example, increasing the minimum wage does not reduce employment, and it does not run counter to dozens of credible studies by economists that show a negative (though modest) effect. There are also a few recent studies showing no effect at all, generating some doubt about exactly what will happen.
The risk of employment loss for several hundred thousand low-wage workers, in an already soft job market, should not be dismissed. The very large minimum wage increases now occurring in many states and localities will almost certainly drive some employers across their borders toward lower-wage