The topic I decided to discuss is why employee pay is low. Not
everyone in America gets a small paycheck, but the difference
between how much lower-end workers make compared to higher-
end workers is staggering. Some of the major reasons for lower-end
workers making so little is “supply and demand, scalability, and power
differential.” (Ingraham, 2020). America is all about paying more for
advanced specialized work. This leaves essential workers with jobs
that take little skill, to struggle financially. “The enormous discretion
American bosses have to dictate take-it-or-leave-it terms to
dependent workers is the core reason our ‘essential’ workforce is in
such dire straits.” (Ingraham, 2020).
All of these and more can lead to some negative repercussions for
the parties involved. For example, it can lead to lower morale for
employees, higher turnover rate, lower-quality workers hired for the
business, and the community can be worsened. “Low wages are
associated with increased stress, low self-esteem, and a greater
tendency to engage in unhealthy behaviors like smoking. The health
effects of low wages become a vicious cycle, in which poor health
hinders employment and income growth.” (Yarrow, 2018). Businesses
are willing to deal with these negative repercussions because they
would rather pursue higher profits than make their employees
happier with higher wages.
However, there are some positive repercussions for businesses that
incorporate a people-friendly practice. For example, they boost
morale for employees, give employees more reasonable pay, bring in
higher quality employees, lower turnover rate, and give a brighter
outlook on the community. “A minimum wage increase can improve
the productivity of a given firm’s workforce because higher wages
reduce turnover. In fact, there is strong empirical evidence that
higher minimum wages lead to more stable and experienced
workforces.” (Helper, 2021). In conclusion, there are different
positive and negative repercussions that businesses have to consider
when deciding what wages they should pay their employees. Lower
wages entail lower morale for employees and potentially higher
profit for the company, but higher wages entail higher morale for
employees and potentially lower profit for the company.
Citations
Helper, S. (2021, April 1). Businesses can thrive with a higher minimum
wage, and government can help. Economic Policy Institute. Retrieved
from https://www.epi.org/blog/businesses-can-thrive-with-a-higher-
minimum-wage-and-government-can-help/
Ingraham, C. (2020, April 6). Analysis | why many 'essential' workers get
paid so little, according to experts. The Washington Post. Retrieved
from https://www.washingtonpost.com/business/2020/04/06/why-
do-so-many-essential-workers-get-paid-so-little-heres-what-
economists-have-say/
Yarrow, A. (2018, July 20). How low wages hurt families and
perpetuate poverty. Coalition on Human Needs. Retrieved
from https://www.chn.org/voices/how-low-wages-hurt-families-
and-perpetuate-poverty/
