![]() ![]() Employees may stop working at their side jobs, meaning they’ll be better prepared and focused when coming to work at your business. Performance: If employees are getting paid more than before, you may notice better performance from your staff, especially if they were once working two jobs to afford to pay their bills.They want to work hard to make sure they meet expectations and keep their jobs. Motivation: Getting paid more motivates employees.This helps the business because, with less employee turnover, costs for hiring and training new staff are reduced. Employee loyalty: Employees satisfied with their pay are more likely to be loyal to their current employer rather than looking for work elsewhere.Job satisfaction equates to higher levels of collaboration, creativity and communication among all employees. Job satisfaction: When they receive higher pay, employees may feel more satisfaction in their jobs.On top of the pros listed above, there are additional, more business-specific benefits from raising the minimum wage in your workplace, including: More outsourcing: If the cost of outsourcing work is less than the cost of hiring new employees, companies may gravitate toward outsourcing to keep overhead costs at a manageable amount for successful operations.This means that unemployed people or people who have just graduated from college may end up spending more time and effort looking for a job before getting hired. A stalled job market: Because of the increased cost of doing business, companies may go on a hiring freeze to keep costs as low as possible.Over time, this may translate to a higher cost of living and more minimum wage increases. Higher product costs: An increase in the minimum wage adds to the overhead costs of operating your business, which may result in a higher price point getting passed along to consumers.In contrast, there are also cons of a minimum wage change, including: Raising the minimum wage pulls a lot of families out of poverty. Helping employees and their families: Other than being able to purchase more items, employees and their families benefit from a minimum wage increase because it helps them weather price inflation and the inevitable increase in the cost of living.Companies then need to hire more workers so they can keep up. More jobs: As people continue to stimulate the economy with their new purchasing power, demand increases, which can lead to the creation of more jobs to keep up with demand.Increasing the minimum wage gives individuals more buying power, and the economy can experience an uptick because of increased spending. Boosting the economy: A great way to boost the economy is to give people the funds they need to purchase products, goods and services.Raising the minimum wage: the pros and consĪs with most things having to do with business, there are broad-based economic pros and cons to a minimum wage increase. Department of Labor has information about your state’s minimum wage and any other applicable laws as they pertain to employing staff, including how minimum wage works for employees who receive tips and earn a subminimum wage. Some states and territories have already been raising their wages as per voter mandates and may reach the new minimum before 2025. However, each state has the ability to set its minimum wage above the federal amount. The bill outlines the recommended annual rises to achieve that 2025 goal. The proposed Raise the Wage Act of 2021 says that all states must raise their minimum wage to the new minimum of $15 per hour by 2025. This has led many to infer that another minimum wage raise was well overdue. The dollar had an average inflation rate of 2.18% per year between 20, producing a cumulative price increase of 29.56%. The Fair Labor Standards Act of 2009 raised the federal minimum wage to $7.25 per hour, but since that time, the cost of living and inflation have outpaced that minimum. Minimum wage is the lowest salary an employer can legally pay to their nonexempt employees, either according to law or per a labor union contract if one exists for the company. ![]()
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