Like any other commodity, labor is determined by supply and demand in the market, and any artificial intervention disrupts the market balance, leading to shortages and gray employment. Some economists argue that any restrictions on working conditions are harmful. Employees who are unsatisfied with their work can always change employers and conditions in the free market. In fact, in almost all developed countries, the labor market is highly regulated, and there are several important reasons for that.
At the same time, it is worth noting labor is a particular commodity, and its low cost can have serious social and political consequences. In reality, it is not always possible to change the place of work or occupation due to the asymmetry of the employer-employee relationship. The simplest example is when there are more applicants than jobs, and the employer dictates his conditions to applicants.
Available statistics provide another argument in favor of minimum wages. Worst of all, Low salaries grow the worst, and this is despite the tremendous growth in the incomes of highly paid top managers (Gould). This disease of developed and developing economies is known as economic inequality, and the primary way to combat it is the redistribution of income, which is carried out, among other things, through the establishment and indexation of minimum wages.
Certainly, the living wage, in this sense, is an essential factor in determining the minimum wage level. Just because one works full time does not necessarily mean they are not a beggar in today’s world. Therefore, since the cost of living is estimated based on accurate prices for food, shelter, and transport, and relying on this indicator, it is possible to control poverty. Moreover, the living wage provision is argued to make workers happier and increase morale since they feel safer (Smith). However, the universal living age does not seem to reflect the regional differences and, thus, is irrelevant for the purposes mentioned above.
Works Cited
Gould, Elise. “State of Working America Wages 2019: A Story of Slow, Uneven, and Unequal Wage Growth Over the Last 40 Years.” Economic Policy Institute, Web.
Smith, Kelly Anne. “What You Need to Know About the Minimum Wage Debate.” Forbes Advisor, Web.