Discussion Module 1
Hello. I'm Jon from New Hampshire. I currently work for ADP. I am working toward my Masters in Human Resource Management.
The subject of minimum wage is a tough conversation to have. I have always been for increased minimum wages as I feel it's only fair to pay people a fair wage. That is, people are struggling every day and living paycheck to paycheck as what they earn as a wage is barely enough for the necessities. Costs keep rising on everything we need for a productive life, yet wages do not increase at the same rate. I also get that it's a lot more gray than black and white. There are many factors to consider. I think in general, companies are going to pay more than what is minimally required.
Fair Labor Standards Act of 1938 (FLSA) covers minimum wage, overtime pay,
recordkeeping, etc. This affects the private sector as well as the government at the local, state, and federal levels (Martocchio, 2020). Most people know that there is a state minimum wage and a federal minimum wage. Whichever is to the employee's benefit is the one that applies. This is part of why I think it is important for both to be addressed.
The states will know better what the wage history is, the unemployment rate, and cost of living details that will affect wage decisions and dictate what is fair for the average worker. Of course, there most certainly should be exceptions in place as not all jobs are created equal. For example, there are employees just entering the workforce who have less experience and jobs that require less effort and skills than others or jobs that require little effort and/or skill.
Many employers will keep wages higher than the required minimum to attract quality
performance and reduce turnover, ultimately saving the company money (Klassen, 2021). To be profitable a company has to be paying out less than they are receiving. The trick is paying employees enough to encourage a high level of participation while adding value to the company (Martocchio, 2020). Small businesses, however, do not always have the same resources and options as larger companies so a minimum wage increase can drastically affect costs to a small business and, in turn, the unemployment rate.
According to Congressional Budget Office (2019), increasing the federal minimum
wage would affect the economy in varying degrees, depending on how much it was increased. They looked at an increase to $15 per hour would increase the pay of several million workers while decreasing those below the poverty threshold by over a million. For $12 and $10, the numbers change proportionately where the lower of the three having the least impact on, not only those employees who would benefit but also decreasing the effect on poverty drastically (Congressional Budget Office, 2019).
Perhaps the most frustrating aspect of changing the minimum wage is the effects it could have. For example, increases can boost the income of employees and, i