Pros And Cons Of Minimum Wage

In this assignment, I will be discussing the pros and cons of raising the minimum wage to $15 per hour in Ontario for the 3 major stakeholders: individuals, businesses and the government. Firstly, individuals make their own choices on what to spend their money on. They must choose between necessities like food, water and shelter, or even between more luxurious goods, since money is a limited resource. Individuals experience opportunity cost in some cases – the best alternative forgone. For example, some may choose to spend their money on education. Their opportunity cost is joining the workforce. They could have earned a salary earlier, but they chose to pursue an education to possibly obtain a better paying job later on. Though,

They would most likely lay off the younger and inexperienced employees. Nevertheless, there would most likely be less hiring done as well. Prices for certain goods may increase in order for employers to make the necessary profit to sustain their business. Ultimately, the rise of the minimum wage may result in the rise of the price of living, which would eventually lead to another push to increase the minimum wage. Secondly, businesses also play a part in the economic environment. Managers are responsible for ensuring that the proper inputs are made to result in profit, to lead to efficient productivity and overall growth. As the minimum wage rises, consumers are more able to purchase goods, resulting in an increase of sales and profit for businesses. There is also a reduced turnover rate. Employees will feel a bit more comfortable with the $15 minimum wage, so they would be less likely to quit their job. This leads to fewer expenses spent on hiring and training employees. As mentioned in the article, employees currently paid at $15 will expect a raise in their wage. Nonetheless, particularly small businesses, will not be able to afford to keep as many employees. They would either need to fire employees, shut down, or