Minimum Wage Minimum wage is topic that is affected by so much subjective arguments that it is hard for some people to really make sense of what minimum wage even is. The biggest proponent of minimum wage increases are of course people who work minimum wage. Those who oppose often do not work minimum wage for a living or did not work minimum wage for very long. However; because minimum wage is taken personally and not viewed in an objective environment of principles and logic it has given way to coercive laws and regulations that do not help the workers and harms economic prosperity within many different sectors, minimum wage feels nice to have, but is harmful to everyone. Since 1896 when New Zealand established the first minimum wage laws …show more content…
Layoffs ensue as the firm also just cut 1,000 jobs and when the corporate motto is “everyday low prices”, passing on cost to the consumers is not at the top of the list when it comes to options. So Wal-Mart suppliers are currently operating on the lowest margins ever. A recent Forbes survey found that firms that derive less than 10% of profits from Wal-Mart, margins have dropped from 39.1% to 36.2% since 2006. Smaller companies that are not as diversified are hit hardest as firms that derived 20% and higher profits from Wal-Mart margins have dropped from 48.7% to 28.7%. These businesses have to cut production costs in any way possible in order to continue to compete with outsourced suppliers and when overhead, raw materials, and energy are not an option labor becomes the first thing to be adjusted. Small businesses suffer the most under a minimum wage increase as their capital base and cash flow tend to be smaller causing layoffs of workers, reduced profit margins, greater operating costs, and overall less productivity. Some say that increasing wages overall increases the prosperity of all, but that prosperity must come from somewhere and it is small businesses that pay the