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  • Essay / Negative Effects of Minimum Wage Laws - 943

    Small businesses operate with little capital and net profit margin. Opponents argue that raising the minimum wage affects small business owners the most because they struggle to pay their employees. Oppositions believe that increasing the minimum wage creates a market distortion (“federal minimum wage”). This means that government intervention in raising the minimum wage results in a higher price floor, defined as the minimum price for employee service. Due to a higher floor price, this reduces employment opportunities and corporate profits. For example, according to "The Negative Effects of Minimum Wage Laws," Mark Wilson writes about a study by Barry Hirsch and his co-authors on the methods employers use to adjust to the newly imposed minimum wage . In their study, employers mitigate the impact of the minimum wage increase by "requiring better attendance, insisting that tasks be completed more quickly, imposing additional tasks on workers, minimizing hours worked with better hours and quickly dismissing underperforming employees.” Additionally, businesses are trying to pass rising costs onto consumers, leading to increased competition from imported products. This makes them less competitive. The negative aspect of increasing the minimum wage affects employers, employees, and customers, as studies suggest that every minimum wage increase for workers comes from the pockets of business owners or customers; Additionally, employers are imposing more job responsibilities on