Minimum wages usually plays a vital role in increasing the number of employees willing to and able to work. Altering these wages to achieve income equality has it’s pros and cons.
There has been a lot of hue and cry about the news of increasing the minimum wages in BC and a fellow Sauder student Dhiraj Narang has focused on the very same in his recent blog post “Raising the minimum wage can have a negative impact too you know !“. In his blog post, he has talked about how the increase in the minimum wage is not as good as it may appear. He commented on the effects it may have on businesses and also how this minimum wage may seem appealing for the employee at first. But in reality, that’s not what is happening.
I completely agree with Dhiraj’s point of view. I feel that an initial increase in the wages would look extremely attractive to the employees and they would be inclined to work but this in turn would lead to inflation in the long run. As vividly illustrated by Dhiraj, eventually the employees become a “consumer” and with the increase in the prices, everything becomes more expensive for them. Hence, it defeats the purpose of increasing the wage, but in reality it just increases the inflation. Hence, it would be advisable to increase the minimum wages as it has a lot of adverse effects on the economy as a whole.
