Minimum Wage: Stakeholder Perspectives, Impacts, and Sustainability

This report delves into the complexities of minimum wage, examining its impact on various stakeholders and the labor market. It explores the perspectives of employers, employees, and economists, highlighting the differing views on the economic effects of minimum wage laws. The report analyzes how minimum wage affects low-skilled labor, skilled labor, and small businesses, and discusses issues through a sustainability lens, considering the triple bottom line (people, environment, and economics). The report critiques the impact of minimum wage, particularly on small businesses, and evaluates the potential for increased wages and its effect on investment opportunities. It provides a comprehensive overview of the current debates surrounding minimum wage and its implications for businesses, employees, and the overall economy, drawing on various research studies and sources.

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Minimum Wage
Stakeholder issues
Minimum wage is the most undiscussed topic in the subject of economics. When it comes
to the discussion of minimum wage laws and regulations, it is very important to understand the
nature of the labor market. One needs to understand the labor market to draw a clear line
between the employed and unemployed individuals in an economy. Labor markets can be of
many types. There are several labor markets that are operating in a particular economy. For
instance, the labor market for healthcare includes doctors’ nurses, administrations staff, clerks
and other staff members. This particular labor market represents high degr5ee of substitutability.
This because nurses can perform the job of doctors, doctors can perform work activities of
specialists, doctors and nurses might even assume administrative roles as well. Thus, there is a
high degree of substitutability in the labor market for healthcare. Every labor market has its own
level and degree of substitutability. Each labor market has its own ways of determining demand
and supply (Ryan, 2016).
Research studies indicate that the labor markets with a high degree of substitutability are
more responsive to the changes in the relative wages. The demand for labor in a narrowly
defined labor market is highly responsive to changes in relative wages. In the same way, the
lower the skills of the labor the more responsive is the demand for labor with respect to the
changes in the relative wage. Supply of labor is affected in the same way. Supply of labor is also
highly responsive to the changes in wage rates for narrowly defined and lower skilled labor
markets with a high degree of substitutability (Karp, 2019)
The effect of the minimum wage is different in different labor markets. Labor markets
with low skilled workers and possessing a low degree of substitutability, are affected the most
due to changes in the minimum wage (Newman, 2018). This is because these workers are poor.
They cannot perform the jobs of other position. The rigid job structure with limited or no
substitutability makes the labor market being impacted the most due to changes in the minimum
wage levels (Bishop, 2018). However, labor markets with high skilled jobs possess a high degree
of substitutability. Labor is capable of performing the jobs of others. Such labor is paid more
than the minimum wage. Thus changes in the minimum wage affect this particular market the
least. This is because the labor in this market is already earning way to high then the minimum

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wage set forth by the state. The minimum wage changes affect the low skilled labor the most as
they are earning either equal or little high than the minimum wage (Clemens, 2015).
Stakeholder View
Different stakeholders will view the minimum wage in a different way. The minimum
wage is the lowest amount of earning that must be paid to employees by the employers as
determined by the government of the state. Economist of the demand side sees minimum wages
as a burden on employers particularly those belonging to small and medium-sized businesses.
The economist supporting the supply side feel that minimum wages will only adverse the
situations of poor workers.
Stakeholder Impact
Minimum wages will increase poverty and adversity for low skilled labor. Increase in the
minimum wages will cause skilled labor to demand the increase in their pay. Thus, burdening
employers with greater salary expense. Increase in the minimum wage will cause employers of
unskilled labor to pay more to its labor. This will reap away the profits of the small and medium-
sized businesses. However, the skilled labor will be benefited the most with the increase in
minimum wages than the unskilled labor. The skilled labor will get more increments on their
salaries than on the wages of low skilled labor (Richardson, n.d.).
Issues Faced by Stakeholders through Lens of Sustainability
Minimum wages are always viewed through the motives of the politicians. For instance,
an increase in the minimum wage will benefit the unskilled workers, benefit the economy by
abolishing poverty and it will benefit the unskilled labor with the minimum earnings. Such
benefits represent political objectives. However, the minimum wage has a different impact on
employers. Employers view minimum wage as a burden that must be paid to get the job done.
Employers, particularly those ruining small and medium business have limited earnings and
revenues. Keeping in view the limited profits they are able to earn, they still have to pay the
minimum wage specified by the state that completely ignores the financial conditions of the
employers. Thus, minimum wage, most of the time ignores the issues faced by employers, and
are set based on political gains. Employers of small businesses might have to pay a huge amount
out of their revenues to get their businesses going. Such huge amount might hamper the ability of

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these employers to find other investment opportunities to progress and grow (Ahlfeldt, et al.,
2018).
Increasing the minimum wages might worsen the situation of employers. This might
result in intentional layoff and terminations to keep the budget and wage expenses in control.
Thus, minimum wages do not help in abolishing poverty and adversity of the low skilled labor,
in fact, it adds to the difficulties of such labor (Gordon S. Lang School of Business and
Economics, 2018).
Impact on the Triple Bottom Line
Organizations are now trying to be more sustainable than before. Employers used the
term sustainability to monitor the progress and the success of the companies based on their
contribution to society and the environment they live in. Organizations are making sure that they
contribute and return to the society they live in. many organizations are looking over their daily
activities to see if these activities are sustainable and do not harm the community, environment
and the society they operate it. Every employer has his own ways of ensuring sustainability.
Controlling emission of harmful gasses to air, controlling pollution, minimizing water usage,
reducing the emission of waste and making sure that the society is positively be affected by the
efforts of the employers and companies are some way of ensuring sustainability (Spiliakos,
2018).
Triple bottom line framework is used to monitor or determine the success and
sustainability of the company through three components i.e. people, environment, and economic
factors. Minimum wage requirements can affect the sustainability of the company. Increase in
minimum wages may result is layoff thus affecting the people (employees of the company).
Increase in minimum wages might restrict the availability of cash in the company, thus the
company might not be able to invest in environmental protection activities. Profits (economics)
might decline if wages are increased due to increased salary expense. The wage requirement may
affect the ability of the employers and business to remain sustainable (Slaper & Hall, n.d.).

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Critiques
For employer of a small company, the small increase in wages of the labor will be much
more acceptable by the company keeping in mind the limited resource available. Small
organizations have limited cash available to meet the salary and wage expenses. The work is
limited to the size and the number of employees, employees are never burdened with overwork.
Little increase in the minimum wage will allow the company to set aside more cash for
sustainable purposes. Reducing wage expenses will also allow the company to discover more
investment opportunities. Thus, kindly consider this proposal for an increase in minimum wage
for the year of 2019/20.
References
Ahlfeldt, G., Roth, D. & Seidel, T., 2018. What are the spacial implications of minimum wages?.
[Online]
Available at: https://www.weforum.org/agenda/2018/09/what-are-the-spacial-
implications-of-minimum-wage
[Accessed 4 April 2019].
Bishop, J., 2018. The Effect of Minimum Wage Increases on Wages, Hours Worked and Job
Loss. [Online]
Available at: https://www.rba.gov.au/publications/bulletin/2018/sep/the-effect-of-
minimum-wage-increases-on-wages-hours-worked-and-job-loss.html
[Accessed 6 April 2019].
Clemens, J., 2015. How does the minimum wage affect employment?. [Online]
Available at: https://www.weforum.org/agenda/2015/01/how-does-the-minimum-wage-
affect-employment/
[Accessed 6 April 2019].
Gordon S. Lang School of Business and Economics, 2018. How does the minimum wage
increase affect employers and employees?. [Online]
Available at: https://www.uoguelph.ca/lang/news/2018/02/how-does-minimum-wage-
increase-affect-employers-and-employees
[Accessed 6 April 2019].
Karp, P., 2019. https://www.theguardian.com/australia-news/2019/mar/15/significant-increase-
in-minimum-wage-wont-cost-jobs-labor-says. [Online]
Available at: https://www.theguardian.com/australia-news/2019/mar/15/significant-
increase-in-minimum-wage-wont-cost-jobs-labor-says
[Accessed 6 April 2019].

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Newman, A., 2018. Australia pays fast-food workers $20 an hour and the sky hasn’t fallen.
[Online]
Available at: https://www.theglobeandmail.com/report-on-business/small-business/
talent/australia-pays-fast-food-workers-20-an-hour-and-the-sky-hasnt-fallen/
article38026876/
[Accessed 4 April 2019].
Richason, O. E., n.d. The Economic Effects of Minimum Wage. [Online]
Available at: https://smallbusiness.chron.com/economic-effects-minimum-wage-
2690.html
[Accessed 6 April 2019].
Ryan, L., 2016. Australia shows why raising the minimum wage doesn’t always fix poverty.
[Online]
Available at: https://qz.com/747814/other-countries-have-sorted-out-their-minimum-
wage-woes-why-not-america/
[Accessed 6 April 2019].
Slaper, T. F. & Hall, T. J., n.d. The Triple Bottom Line: What Is It and How Does It Work?.
[Online]
Available at: http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html
[Accessed 6 April 2019].
Spiliakos, A., 2018. What Does "Sustainability" Mean In Business?. [Online]
Available at: https://online.hbs.edu/blog/post/what-is-sustainability-in-business
[Accessed 6 April 2019].