Recently, there was a debate about the minimum wage, whether it should be increased.
I am one to support the minimum wage, and believe that, when the cost of living rises, then the minimum wage should also rise. Now some say that raising the minimum wage increases unemployment but how true is that? According to economics, the unemployment rate is the percentage of the workforce actively looking for jobs. It doesn’t include those people who are not actively looking for work. When the minimum wage rises, some of those who previously weren’t looking for jobs also start actively seeking work, thus raising the unemployment rate. So it’s important to take this into consideration when deciding whether the minimum wage is good or bad for the economy. If the unemployment rate increases because some people lose their jobs due to the increase in minimum wage, then there is a disadvantage to raising the minimum wage. But if the unemployment rate has gone up because those individuals who previously weren’t looking for work, but due to the increase in minimum wage entered the workforce, then raising the minimum wage isn’t such a bad thing after all.
I believe every society should have a minimum wage at least for the lowest income individuals so that such people aren’t taken advantage of.
What are your thoughts? Do you agree or disagree? Why?