What Is The Federal Minimum Wage Harm?

The question is raising the federal minimum wage, can harm? How and who? When looking at the size and the budget of small enterprises, we notice that they have limited flexibility. They have to manage carefully their exploitation charges so they can guaranty workers' salaries. The number of workers needs for a job are function of the job description and the market supply and demand. Because of limited flexibilities and the instable market condition, small enterprises have to control well employees' wage if they wanted to exist. Consequently, employers might limit the number of offers especially for low – skilled jobs. According to Dorn and Cooper,'' increase the minimum wage would reduce job opportunities for low – skilled workers, incentivize employers to switch to labor saving methods of production like shift to automated equipment, self- service tablets and new software to save on higher-priced low-skilled workers.''
Another concern is that the legal minimum wage might affect negatively both economic and individual freedom. While it could be illegal for workers to consent to be paid less than the minimum wage, employers also, are not allow to hire for less. This situation could favorize the development of black market, bad for the economy. Dorn and James 2 claim that ''high unemployment rates for teenage workers, especially blacks, are a direct consequence of the legally mandated minimum wage. The minimum wage also leads to lower participation rates for low-skilled workers as they become discouraged and drop out of the