Overthe years, various governments have improved and legislated enhancedearnings for their lowest-skilled laborers. Minimum wage laws arebinding by law and require that employers pay their workers at leastmore than a certain minimum amount. From local governments, states,and federal governments, minimum wages are relatively legislatedpolicies that have been so much on the rise over the last threedecades. Over 140 American municipalities have a minimum wage law.This paper will look to discuss the effects of the wage bill onvarious aspects.
Ithas however been argued that wherever a government issues a wage overthe prevailing economic rate, this results in fewer jobs and lessworking hours for the people with fewer skills. Therefore, this couldbring an imbalance between the few available employment opportunitiesand fewer working hours to reduce the recurring expenditure of theirbusinesses. The congressional budget office 2014 identified that anincrease in minimum wage could slightly reduce employmentopportunities for the less skilled laborers. In addition to that, anincrease of federal minimum wage by approximately $10.10 from theexisting market levels could increase unemployment by 0.3 percent [ CITATION Con14 l 1033 ].It is also evident that employers’ response to higher wage bills isby hiring more skilled personnel at the expense of unskilled persons.Hence, this means that there are limited opportunities for lessskilled workers to participate in the labor market. Therefore, ifemployers seek the services of higher skilled workers for the paymentof higher wages due to their better productivity the purpose ofimproving wage bill loses its meaning.
Onthe impact of nutrition and relative health, increased minimum wagebills affect the purchasing power of the lowest skilled laborers inthe market. Those who are lucky to retain their jobs have the edgeover those unskilled laborers who tentatively lose their occupations.The employed ones have the ability to maintain a balanced nutritionfor their low scale families. The comparison between the ratios ofunskilled laborers on minimum wage and those unemployed may remainsevere. This is because for those who lose their jobs they find ithard to maintain balanced nutrition and adequate health care fortheir families [ CITATION Dan12 l 1033 ].
Otherthan that, employers would rather have full-time employees than thepart-time workers, thereby reducing the working hours which relatedirectly to reduced earnings and ability to maintain theirlivelihood. As such, their diet diminishes rapidly. This is becausemost employers would downscale the unskilled labor to maximize theirprofits. This would, therefore, push the unskilled laborers to reducetheir meal intake by avoiding snacks and focusing on energy givingfoods because of their pocket-friendly prices. Therefore, it means animbalanced diet and inadequate medical care and insurance due tofinancial constraints [ CITATION Dou14 l 1033 ].
Anotherimpact concerns the prices of meals at restaurants and food stores. Astructured model of the food industry could tell that an increase inminimum wage will heighten the food prices. This is due to highproduction costs in the farms and increased purchasing costs. Theseincreased costs are consequently transferred to the consumers whoseabilities are now off the board. Research by Meltzer and Chen (2011)based on the effect of the minimum wage over the periods between 1968and 2007 compared to basic metabolic index (BMI) showed that increasein minimum wage led to a slight decrease in BMI. Greater income mayalso result in the consumption of unhealthy products like alcohol andcigarettes, especially for the lowest income earners. This is becausetheir earnings will not allow them to spend a lot on leisure.Therefore, they end up spending on the cheapest and lowest quality ofthe same [ CITATION Geo16 l 1033 ].
Sometimesthe increased minimum wage laws could be too small to affect theprices of foods and commodities. In that respect, it empowers thelowest earning workers with extra income to flourish their diet andsave some money for health insurance. Increase in the minimum wagewill lead to self-dependency hence, reduced overreliance on food aidssuch as (SNAP). Evidence shows that reduced enrollment of SupplementNutrition Assistance Program upon a significant increase in theminimum wage. This is because the increased earnings empower them toachieve what they need. In other occasions, the changes in wage billcould be substantial and superior enough to cause significant changesin prices of commodities. However, it is prevented by the fact thatthe employed people have the comfort and ability to counter therising prices. As such, it gives the economy a boost both fromskilled personnel to unskilled laborers [ CITATION Cha14 l 1033 ].
Increasingthe minimum wage bill also protects the entry-level workers and theirlivelihoods and health. Evidently, an increase in the minimum wagecould be associated with an improved health care of the involvedfamilies driven by enhanced nutrition living environment andinsurance. Evidence also suggests that a rise in prenatal care causesa decline in smoking during pregnancy. These are some channelsthrough which minimum wage can affect infant health. Labor marketpolicies that enhance wages can thus affect well-being in obviousmeans, and such health effects should enter into any cost-benefitcalculus of such policies [ CITATION Dou14 l 1033 ].
Anotherresearch by Lenhart (2015a) shows that with improved national minimumwage in the UK, relevant improvements in nutrition health andreduction of financial stress was evident. In addition to thatStrully, Rehkopf, and Xuan (2010) study stated that addition ofminimum wage bill by one dollar led to significant 3-gram increase inbirthweight and 7 percent decline in the habits of smoking among theemployed individuals. Greater income leads to increased quality ofnutrition intake and improved medical health care particularly tothose in minimal paying jobs. Therefore, it means great financialsecurity, better insurance, and reduced stress [ CITATION Cha14 l 1033 ].
Inmy own perspectives, the minimum wage bill should be improved slowlyand significantly as per the existing market rates and the futureeconomic projections. Increasing the wage bill has significantpositives as well as considerable downfalls. However, increasing thewage bills by the smallest percentages would not adversely affect theeconomy as a whole. Additionally, it relatively affects the nutritiondiets and healthcare of both the unemployed and employed people.
Minimumwage laws, like any other policy seeking to better life of lowestearning employees, has consequences. If the lowest expected income isput above existing market rates, they could lead to unexpectedconsequences. Employers could respond by hiring more qualifiedworkers at the expense of those who have fewer skills to offset someof the higher wage costs. Improving the minimum wage bill is a goodidea but the reality has its consequences. While some workers benefitfrom a higher wage and hence improved nutrition and standards, thiscould come with an effect on the unskilled laborers who may losetheir jobs. As such, they would lose their financial power and end upindulging in an unbalanced diet, uncalled for health livingconditions and over-reliance on food aids and supplements.
Chen, D. O. (2011). The Impact of Minimum Wage Rates on Body Weight in the United States. 17-34.
Congressional Budget Office. (2014, February 18). The Effects of a Minimum-Wage Increase on Employment and Family Income. Retrieved from https://www.cbo.gov/publication/44995
Daniel Aaronson, S. A. (2012). The Spending and Debt Response to Minimum Wage Hikes. Journal of American Economic Review, 3111-3139.
Elmendorf, D. W. (2014). The Effects of a Minimum-Wage Increase on Employment and Family Income. 1-43.
George Wehby, D. D. (2016). Effects of the Minimum Wage on Infant Health. 1-49.
Lammam, C. (2014). The Economic Effects of Living Wage Laws. 1-44.