Effects of the New Minimum Wage Law

Among the many topics discussed by U. S. policymakers continues to be the topic of minimum wage. There has been a call at federal, state, and local levels to increase the minimum wage. The idea behind this movement is to improve the economic well-being of low paid workers, enabling many of them to reach above the poverty threshold. While this initiative is intended to help tackle the problem of poverty, there are other issues to consider as well. Raising the minimum wage could impact the economy, businesses, and low wage workers in various ways.

Raising the minimum wage is intended to help low-paid workers improve their economic stability. For those employees who are paid the minimum wage, an increase would certainly be beneficial. They will be receiving a higher pay and increasing their family’s income, which in turn could help some families rise above the poverty threshold. In addition, many of the workers that would be impacted by a hike in the minimum wage would actually be workers who make slightly more. It is likely that many low-wage employees who currently make slightly more than minimum wage would also see an increase in pay.

While it may sound like a simple solution to help those who are low wage workers, raising the minimum wage could have adverse effects on the economy as well. Just like those low wage workers mentioned before, many of them could lose their jobs altogether as companies are forced to eliminate positions in order to pay higher wages. In turn, many employees who are currently making slightly above minimum wage are at an increased risk for sinking into poverty. Likewise, many restaurants and businesses will be forced to raise prices in order to cover their increased expenses. This could have a negative impact on the economy, as consumers are likely to avoid spending those extra dollars. Restaurants are among the top businesses that are most affected by the minimum wage increase. If forced to pay higher wages, they will likely be forced to cut jobs and raise prices in order to meet those demands.

Despite the concerns associated with the new minimum wage laws, there are things restaurants can do to prepare. For starters, they can work to increase efficiency in the restaurant. Rather than cut employees hours in order to meet the higher wage demands, they can encourage employees to work on increasing productivity for the restaurant. Restaurants should get the most out of their employees while they are at work. Another solution is to cut back on spending in other areas, rather than cutting out employees. By closely examining the restaurant to see what tools and techniques are most effective, owners can cut back on items that aren’t necessarily profitable. Finally, restaurants will need to be more selective about hiring. They should focus on hiring staff members that are likely to stick around, rather than college students or seasonal employees looking for temporary work. By preparing for these new minimum wage laws, restaurants can be ready to see profit increases along with minimum wage increases.