Why do people support the minimum wage? Watch

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Maker
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#21
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#21
(Original post by jake4198)
Over the last decade or so, the minimum wage in Britain has been increasing as a measure to try and combat the cost of living crisis for Britain's most vulnerable workers. Of course, getting by on a minimum wage is still a very difficult task and the resurgence of food banks only reiterates the current state of affairs in this country. However, there is absolutely no evidence to suggest raising the minimum wage - or indeed having a minimum wage - will provide a springboard for people to escape poverty and the cost of living crisis. Let me explain:

1) It is a basic economic principle that workers and their pay are deduced by supply and demand. If there is a demand for workers, employers will have to offer a higher salary to fill the vacancy out of necessity. Similarly, if there is a shortage of supply for workers, employers will have to offer a higher salary to attract workers to the profession. In the case for jobs pertinent to the minimum wage, there is often a lack of demand and a surplus of supply; so to artificially increase the wages for these workers, you are distorting the mechanisms of market economics which in itself has immediate and long-term consequences.

2) If you increase the minimum wage, it is employers who will have to bear the burden of government intervention. Consequently, profit margins will decrease and this will force employers to invest in alternative technologies to reduce overall operating costs, such as automated checkout machines to replace checkout assistants or robotised computer algorithms to replace call-centre operatives. Employees are often the largest expense for businesses, and that expense increases, employers will look for alternatives which will result in unemployment and redundancy.

3) Even if workers are not replaced by robotics, employers might be forced to reduce bureaucracy or cut down on employees' hours. This might include changing workers from full-time to part-time contracts, abolishing middle-management positions or outright sacking employees because their services are no longer need as the business is forced to rework its business-model.

Before I go on and on, I think this video perfectly summarises the points made:



Let me know your thoughts!
You are assuming workers on the MW are a big percentage of a company's workforce to make a significant difference. But in most companies, workers on the MW are only a small percentage of the overall work force so the effect of increasing it on the company's cost is quite small. Thats why when the MW was first put into law, the effect was small and did not affect most companies.
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yudothis
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#22
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#22
(Original post by jake4198)
However, there is absolutely no evidence to suggest raising the minimum wage - or indeed having a minimum wage - will provide a springboard for people to escape poverty and the cost of living crisis. Let me explain:

Let me know your thoughts!
My thoughts are that who the **** are you to explain minimum wage in three paragraphs on TSR when there are renowned economists that have studied it for years. Your answer sounds textbook A Level.

Btw you are wrong, the general consensus is that a certain level of minimum wage is not detrimental to the economy at all. Google Professor Alan Manning for example, one of the leading labor market economists.
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yudothis
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#23
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#23
(Original post by jake4198)
The video touches upon the conceptual contradiction of the minimum wage, in that it purports to help people escape poverty and exploitation, but actually results in more unemployment and less opportunity for the people whom it is supposed to benefit.

Of course the minimum wage hurts businesses, perhaps not the Tescos or the Amazons, but definitely small businesses which are often the backbone of Britain's economy. The Guardian has reported on "drastic steps" being taken by some businesses to cope to with new 'living wage' initiative: "Increased wages mean higher costs and this may be affecting the ability of some small businesses to grow." [1]

The rationale behind the minimum wage is not driven by ideological purity, but hard evidence.
The "hard evidence" concerning the minimum wage is that it has had positive effects overall. While of course those enjoying it and thus a higher wage than otherwise see, relatively, great improvements.

Your entire concept of "escape poverty" is completely nonsensical. No one ever claimed you will suddenly escape poverty. If you earn minimum wage, by definition you are poor - there is no one earning less than you. The point is to make people able to live in the first place. To reduce absolute poverty, not relative poverty.
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username334839
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#24
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#24
Getting rid of zero hour contracts is a bad idea. There are less that 900 thousand people on them according to the Office for National Statisticsand a significant proportion of those are university students who like the extra cash and flexibility. Better to be in a 0 hour contract job and build some capital and experience than no job at all.
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yudothis
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#25
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#25
Disagree.

Internships sometimes not even paid at all, and 0 hour contracts are exploitation. Pure and simple.
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Emma:-)
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#26
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#26
(Original post by King Leonidas)
I think the minimum wage is a necessity to uphold the structure of employment. However, zero hour contracts should be abolished indefinitely.
I agree.
If you get rid of the NMW- you will get a few employers will try and pay people less than that. So it needs to stay.
0 hours contracts need to go though.
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Nalk1573
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#27
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#27
I am totally against the minimum wage

It leaves less money for the people who deserve it,

and it gives more money to people who do not deserve it, therefore decreasing the wages of people who deserve higher - Yes, the minimum wage makes some workers poorer.

This has nothing to do with immigration, the problem is the fact the minumum wage exists

If you want to earn more money, start a business, learn a language, learn a new skill. Raising your wages is not the answer.
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Libtardian
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#28
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#28
Greed.
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