The Impact of Minimum Wage for Employers

In January 2007, the government raised the federal minimum wage. This is old news in some countries where the minimum wage goes up months before the Congress to act. No matter how you look at the increase in labor costs affect the business climate and how companies can make important decisions in 2007 and moving forward.

Theoretically should increase the minimum wage a nonevent economically. It should be simple to adjust for inflation, the company that has changed. In fact, inflation increases the cost price of goods and business expenses, and one can expect from the wages of employees to increase physical match that upward slope caused by inflation.

How do you see a good or a bad increase in the minimum wave may depend on which side of the fence, which lives on the part of employers or workers. For employers to increase labor costs make business more expensive, and affect the outcome. Employees, employers are only able to compete and pay him to pay staff in which to live. In many cases, probably from both sides of this issue, if you own or manage a business, but there is someone in your family tries to live on minimum wage.

Companies most affected by the upward pressure on wages low. Companies that employ large numbers of unskilled workers and low wage workers can see a big jump in the cost of maintenance workers for a wage increase federal, state or jurisdiction for the workers. Many times small businesses that operate on thin margins, and that any changes in cost structure can be a fatal blow to their budgets. In addition, because the model of small business is very competitive, and there is enough room to raise prices to customers or clients, without the expense of losing business from the biggest competitor is able to absorb this increase in minimum wage, increase in prices.

These concerns are the reason for this is partly the government’s position to the point, Congress is slow to raise the minimum wage. Already there is hatred of people for companies that move their production facilities or support overseas to take advantage of low wage earners to maintain the bottom line on the right track. You should know that the cost of labor is a major issue when the company was ready to transfer most of the work in foreign countries, and to take all these costs only to determine that the basis of employees who would work under minimum wage.

From the perspective of workers, it is difficult to understand how this trend to lower paid jobs abroad can change. We are too late to stop the company from taking measures necessary to compete in a market that is the cause of a law to stop the export of jobs is not a popular idea. While it can be helpful in this case, workers in this country, and this applies to reverse our priorities to let the free market and capitalism play out. Unfortunately, when the free market does not govern, and to get people is sometimes treated well by the program.

The best way for American workers to compete with unskilled workers abroad is to stop the unskilled labor. By taking advantage of educational opportunities and gain valuable skills, they can enter new markets, where the ability to earn wages and good jobs, you may not go abroad because of the special skills of workers are given to entrepreneurs. So the best way to fight the government to export jobs because of high labor costs are not artificially depressed the market to block free trade. The best step is to make employees more skilled, more value for workers to barricade just foreign competition. This is capitalism at work, at best, and if the next line of attack, and as a result of all this is the most powerful labor force, and keeping jobs inAmerica, and a stronger national economy as well.

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