The Advantages of Minimum Wage

by George N. Root III, studioD
There are advantages to having a minimum wage.

There are advantages to having a minimum wage.

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The minimum wage is the lowest wage an employer is allowed to pay. Although a federal minimum wage is set, the individual states can choose to use the federal wage or make their own laws. States such as Washington and Illinois choose to go above the federal minimum, and states such as Alabama and Louisiana choose not to have a minimum wage at all. As of 2010, the minimum wage in Texas is $7.25 per hour. There are advantages to offering a minimum wage.

Helps Families

The Economic Policy Institute is an economic research group located in Washington, D.C., and it concluded in a 1999 study that nearly 40 percent of the minimum wage earners in the United States are working parents. To go even further, nearly 33 percent of the minimum wage earners are married couple raising children. Without a minimum wage, these workers may be forced to work for less money.

Reduces Tax Burden

A person making at least minimum wage is not using as many public services as someone on unemployment, according to economics expert Professor Brock Haussamen. An unemployed worker is given welfare, rent assistance and food stamps in many states. With minimum wage, the need for public assistance is lowered and this reduces the tax burden on the community and the state.

Employment Incentive

A minimum wage gives an unemployed person incentive to take a job because he knows what his minimum pay will be, according to economics website Economics Help. An unemployed person can compare the money he gets from public assistance and compare it to the minimum wage to determine the financial incentive to taking a job.

Business Budgets

Without a minimum wage, it can be difficult for small businesses to budget their money. With a minimum wage in place, a small business owner knows what he will be expected to pay per hour and he can create new jobs with his company based on this budgeting information.

Common Reference

The minimum wage makes the hiring process easier for young or unskilled workers and employers. The worker knows upfront what kind of wage she can expect, and the employer does not have to go through the process of negotiating a wage with a new employee.

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