Business Ethics Assignment: Poverty, Minimum Wage, and Ethics

This assignment delves into two critical aspects of business ethics: the impact of minimum wage and the protection of whistleblowers. The first section examines the debate around increasing the minimum wage to $15/hr, arguing that it may not alleviate poverty due to potential job losses, reduced working hours, and the substitution of low-skilled labor with technology. The analysis cites research from the Foundation for Economic Education, labor statistics, and the Congressional Budget Office to support this viewpoint. The second section focuses on whistleblower protection programs, discussing potential abuses arising from inadequate legislation and suggesting that comprehensive legislation is crucial to protect whistleblowers from retaliation, legitimize disclosure mechanisms, and combat corruption in both the public and private sectors. The assignment emphasizes the importance of stand-alone legislation to ensure clarity and consistent application of procedures and rules.

Running head: BUSINESS ETHICS 1
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BUSINESS ETHICS 2
Minimum Wage: Poverty alleviation is one of the main arguments for increasing the minimum wage to
$15/hr. Do you think that by increasing minimum wages, poverty will be alleviated? Why or why not?
The increase in minimum wage to $15/hr will not alleviate overall poverty as many people believe.
According to research by the Foundation for Economic Education (2016), the increase in minimum wage reduces
the work available for low-skilled workers hence resulting in unemployment. Furthermore, many organisations
respond to the issue of increasing minimum wages by substituting low-skilled labour with other necessary inputs
in the organisation. For example, a medium supermarket may choose to substitute cashiers with the self-checkout
system and other highly- qualified and skilled employees. In addition, if low and semi-skilled employees have
their working hours cut or lose their jobs due to the increase in minimum wages, their incomes fall significantly
leading to a rise in poverty levels among these households.
A research produced by labour statistics also emphasizes that the estimation of employment elasticity in
regard to the minimum wage of low skilled individuals ranges from 0.1 to -0.3 per cent. The difference in ranges
indicates that when minimum wages increase by 10%, low-skilled employment is reduced by one to three per cent
(Labour Statistics, 2012). Further research by the Congressional Budget Office (CBO) showed that if the
minimum wage is increased by 10 percent, the total employment of 500,000 people is reduced (Congressional
Budget Office, 2018). Therefore, it is clear that the program of increasing the minimum wages has unintended
consequences disproportionally hurting people whom the policy was destined to help. For instance, the reduction
of available job in the market due to increased minimum wages restricts least skilled workers and fresh graduates
to access to an entry-level position that is essential for them to gain work experience and valuable knowledge.
Whistleblowers: Whistleblower protection programs can be very useful, but abuses can occur.
How might the programs be abused, and more importantly, how can these abuses be prevented?
Whistleblower protection programs might be abused through the exposure of whistleblowers to retaliation
risks brought about by the absence of appropriate legislation that would impede the fight against corruption.
According to Carr and Lewis (2010) the translation of the protection of whistleblowers into legislation would

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legitimize and structure the various mechanisms through which the whistleblower can be confident and safe while
disclosing wrongdoings in the private and public sector and also enhance their protection against reprisals. When
adequately implemented, legislation for the protection of whistleblowers can be an effective tool for the support of
initiatives against corruption, while at the same time combating and detecting acts of corruption, mismanagement
and fraud.
The enactment of a dedicated and comprehensive law for the provision of protection to whistleblowers is
generally considered an effective means of legislation of providing the protection to whistleblowers. Stand-alone
and comprehensive legislation could give heightened visibility, which would make its promotion easier for
employers and the government. The approach would also allow for the same procedures and rules to be applied to
private and public sector employees, rather than a more piecemeal approach through several laws which are
different and which only and often apply to select employees and to the disclosure of specific kinds of
wrongdoing. Enacting stand-alone legislation could also contribute to ensuring legal clarity and certainty.
References

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Carr, I., & Lewis, D. (2010). Combating corruption through employment law and whistleblower
protection. Industrial Law Journal, 39(1), 52-81.
Congressional Budget Office. (2018). The Effects of a Minimum-Wage Increase on Employment and
Family Income | Congressional Budget Office. Retrieved from
https://www.cbo.gov/publication/44995
Foundation for Economic Education. (2016). Why the Minimum Wage Is Bad at Reducing Poverty |
Chris Edwards. Retrieved from https://fee.org/articles/why-the-minimum-wage-is-bad-at-
reducing-poverty/
Labour Statistics. (2012). Tables 1 - 10; Characteristics of Minimum Wage Workers: 2012. Retrieved
from http://www.bls.gov/cps/minwage2012tbls.htm#1