by Sage Doak

Created on: October 01, 2007

Raising the minimal wage. This topic engages large amounts of debates from both sides, and it is a debate where both sides are right.

Any optimistic views of decreasing the amount of homeless are just as invalid as the arguments that the ripple effect will be the end of many small businesses. In reality, raising the minimal wage has little ultimate effect.

Recently the minimal wage in New Zealand increased from (values converted to US dollars under conversion rate at time of writing) $8.09 an hour to $8.55. This has had little effect on the economy, and that was expected to a degree since the raise was a 20% rise compared to the 54% increase in business profit. Ultimately now is a good time to be in business and profits are high.

Before the wage increase I was above minimal wage, now I am on minimal wage. This is a weird situation as now many people whom where above minimal have had a pay rise but now sit on minimal wage. This can cause problems as this may create a demand for employers to increase wages more than that set by government policy.

It has been almost a year since the increase and nobody can really argue and major effect from minimal wageworkers to high-level employers. Minimal wage increases may make things slightly easier for minimal wageworkers, but those with financial problems are still in the same boat, as extra money does not mean extra retention of that money, or it does not mean that money will go to better uses.

It is worth the risk since the ultimate impacts across the board are so minimal, that the slight improvement in minimal wageworkers makes things easier for individuals whilst not affecting anybody on a group scale.

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