Discuss about the Low Wage Rate in Organization for Income Inequality.
Employees in the organization are faced with various issues which impact negatively on their effectiveness in delivering services. For employees to work effectively, they need to be paid well in order for them to be able to meet their needs. Most of the organization has failed to meet this; therefore they pay workers a low wage that cannot sustain them. The outcomes of these entail little efforts in their jobs as well as low quality in service delivery. If the organization cannot meet the requirement of the minimum wage to the employees, it gives an implication of high chances of such organization to fail. The case has seen in the US whereby nearly 40% of the workers in the United States earn less than $15 an hour as demanded by the low wage workers movement. They, therefore, experience low wage rate. It is the duty of the government to intervene and ensure that the minimum wage requirement is met in order to protect the welfare of the workers and put to an end the issues of low quality in services delivered in the organizations whether in public or private sectors (Piketty, 2014). The paper gives an analysis of low wage is as an employee issue, identifying its cause, mitigations, manifestations, and recommendations.
The issue comes as a result of organizations pay its employees poor wages that is of substandard to the requirement of the minimum wage. Most countries have failed to meet the minimum wage requirement of the hourly wage of $7.25 as the federal law stipulates (Rani et al. 2013). The overtime distorts need higher pay as well. Failing to meet this obligation as stipulated in the law unpunished, give employers an advantage to break the law as workers continue to suffer. It has given room for long-term abuses to be upheld in certain services industries for instance in restaurants, landscaping, and cleaning. Advocating for low pay of the employees by the organization is the main reason behind the increased cases of hunger and sufferings since they lack money that is owed to them. Also, states in failing to enforce wage laws are the reason as to why there is the problem of income inequality which in constant increase, therefore, needs prompt measures in order to stop this problem. Studies indicate that the failure of touching the requirement of the minimum wage touches every part of the society as well as the corner of the country (Rubery & Grimshaw, 2011).
In the United States, the six states in the south (Georgia, Alabama, Louisiana, Tennessee, South Carolina and Mississippi) have failed to adhere to the requirement of the minimum wage as well as Florida, being the seventh state. The concerned institutions propagate the issue of low wage rate due to the fact that cases are picked selectively by the organization, it also lacks resources as well as being slowed by the bureaucracy. The problem is still profound due to the fact that many politicians who could support the requirement of the minimum wage to be attained by the organizations are easily swayed especially when given bribes. It, therefore, makes it difficult to fight the issue in contemporary societies. Money is unavailable in the organization to pay employees well since it is stolen right at the start of the projects (Schäfer & Gottschall, 2015).
The economic conditions, the changes in the organization and the demand for the companies deliver best services and products to the clients affect the ability of the employer to compensate the workers through standard wages, therefore, leading to low pay. Low wages have negative effects on the employees of the organization, for instance, anger due to disappointment, stress, and low morale as well as contribute to unemployment. Regarding the aspect of anger, employees believe that they should be earning more pay in relation to the services they give to the organizations. They, therefore, exhibit the signs of dissatisfaction. This results in poor work relationships with their bosses, they end up wasting time thinking of their managers’ high wages as they languish in poverty. Employees in such instances develop anger that in turn affects their delivery of services (Sabadish & Mishel, 2012). The existence of conflicts in an organization leads to reduced employees productivity since nobody is ready or willing to help the other. Employees morale goes down in such instances, and this results in the resignation of the talented and experienced employees of a company.
Secondly, employees who don’t earn much that can take care of their welfare are prone to stress due to financial worries. Most employees have the agenda of working as they meet their monthly obligations. Salaries that cannot fit such are likely to stress employees on the way such needs will be met. The stress affects the families who in most cases spill to the workplaces as well fostering low morale and productivity. The irritability and frustration created due to inability to meet the needs of the families by the employees’ impact negatively on their self-esteem and overall well-being (Ehrenberg & Smith, 2013). Additionally, employees with low wage rate have low morale which affects the speed of delivery of services as well as the quality of services delivered. The low morale makes the employees feel worthlessness and despair which id dangerous at the place of work. Lastly, low wage rate results in increased cases of unemployment in the organizations since employees quit their jobs especially in the cases of not receiving the compensations they are entitled to. Low levels of motivations through well-paid salaries have an impact on performance whereby poor performance affects the organizations bottom-line (Schäfer & Gottschall, 2015). Financial hiccups and instability by employees affect them psychologically and create a feeling of stress to them. This act of being uncomfortable in the workplace impacts negatively on an organizations productivity and productivity.
Low wage rate is caused by a combination of various factors which entails increased cases of unemployment, low production per worker for instance due to the old and antiquated equipment of production, lack of market for the goods and services. Additionally, in the cases where the demand for highly skilled workers exceeds available supply of skilled workers, organizations following this aspect will be forced to skilled pirate labor from other companies through offering increased wages (Doucouliagos & Stanley, 2009). Low wage rate in many countries globally is as well attributed to the organizations being taxed heavily by the government; therefore, they end up with low revenue that cannot realize high wages to its employees. In addition, political ambitions attribute immensely to the poor wage rate to the employees since such people are easily bribed therefore ignoring the needs of the employees giving employers avenues to mistreat them. Another element is caused by the element of offering jobs to employees on the temporary basis without launching clear terms of payments. This ensures that at the end of the contact, employees do not have evidence to support their claims on the job done in institutions of justice. Forced arbitrations by the companies with its employees that advocate for discriminatory and unfair personnel practices by including the increased low wage payments are being utilized by companies (Engbom & Moser, 2016). The standards of labor are in a critical position which does not put into considerations the needs of the employees such as an increased wage to meet their obligations. Gender and race inequalities are the major propagator of low wages in organizations since many employees employ workers on the basis of their race and gender. It implies that these labor forces are not qualified therefore they pay them what they want. It is clear that there is no fare contracting whereby employees are contacted with the urge to meet their needs but only the organizational needs. There is the framework for paying the employees well, therefore, giving rise to a reduced minimum wage (D’Hombres, Elia, &Weber, 2013). Lack of Equality and diversity in the workplace creates poor wage rate payments to the employees, and this must be avoided by all organizations.
Regarding the issue of the low wage rate, classical theory based on the labor markets posits that wages are determined by the elasticity of the supplied labor and the demand for the labor (marginal revenue product). It is therefore clear that highly skilled labor is in a position to command high wage rate since the marginal revenue product is high and inelastic supply. Workers with the low level of skills will attain low wages. In real-world low wage rate is magnified by the imperfection of labor market for instance monopsony substandard information as well as geographical immobility (Betcherman, 2015).
The contingent theory also explains this issue in that every activity of an organization is depended on the others. No activity can be a success alone. Employees’ performance success depends on the company’s ability to offer fair compensation in terms of wages and salaries to them. This is in relation to the contingent theory.
Battles of the minimum wage requirements need to be fought along with ideological lines whereby the liberals insist that higher minimums prevent exploitation and support those families that otherwise the government would be forced to offer financial assistance to them. The government, therefore, needs to ensure that every organization meets the requirement of the minimum wage (Bengtsson & Waldenström, 2015). The government should be used as a model to solve the problem. There is the need for the countries to understand that stagnation of the wage is the key component resulting in the failure of the economy. Due to the fact that wage has been suppressed by the international policy choices, the problem can be reversed through the making of different policy choices (Belman & Wolfson, 2014).
Researchers show that one set of the policies which have led to the growth of the problem of the minimum wage requirement has aggregated to excessive jobless cases over the past decades. To end the problem, there is the need for the policymakers to deliver broadly the shared growth through budgetary and monetary policies that give priorities to advocating for the full employment which will tighten the labor market in order to ignite the employers to increase the wage of the employees as well as meeting their welfares. In order to attain this aspect, the government needs to launch policies such as keeping the rates of the interests unchanged until the wage rate reaches 4% (Bryson, Davis, & Freeman, 2016).
The government needs to enact the employment programs as well which targets the hard-hit communities. To facilitate an enabling environment, there is the need to encourage public investment in transportation, broadband, and education. Policymakers are in a position to boost the growth of the minimum wage through updating the rules of overtime, regularizing the workers who are not documented, strengthening the rights that ensure that the collective bargaining agreement is reached (Barth et al. 2014). There is the need for the organizations to secure leave for the workers who are unwell and pay them as well. Companies with the help of their management need to ensure that gender and race inequalities are addressed. The government should only be giving contracts to the organizations that adhere to the requirements of the minimum wages as well as the firms need to tackle workplace abuses such as wage theft and misclassification (Azevedo, Nchaust, & Viviane, 2013).
In order to ascertain that indeed the efforts have been made by various states in fighting the low wage rate problem, 246,000 new jobs were created in the US in 2014. The jobs growth lowered the unemployment cases by 5.6 %. The United States is as well striving in order to realize the attainment of the full employment goal. Ending forced arbitration is another approach to mitigating the problem. Following this aspect, employees will be in a position to challenge the unfair and discriminatory practices of the personnel conducted by the companies (Arpaia, Prez, & Pichelmann, 2009). Companies sway the employees to give up on the access to court as well as government agency remedies, therefore, agreeing to settle such disputes through forced arbitrations whose main objective is subject them to suffering. This is a problem that needs to be fought collectively by the employees as well as the concerned institutions. Lastly, organizations need to embrace a modernized labor standard that ensures that the welfare of the employees is well put into considerations for instance through taking care of their personal needs for instance by meeting the health requirements (Andrews, Gill, & Schank, 2008).
The concerned institution as well as the employees should to work collaboratively in order to ensure that the issue of inequality and low wages is put to an end through close observations on the requirements of the minimum wage that will establish the pay floor to be implemented by the institutions globally, therefore, putting to an end the problem of low wage. Consequently, when putting the above measure in place, I recommend the organizations to take a cognizance regarding the level of the minimum wage in relation to the median pay (Alvarez, et al. 2016). The approach will ensure that the organizations do not realize cases of inequality in paying the employees. Companies in taking account the increment of the wages of its employees, they need to consider the element of incremental basis in order to avoid the negative impacts on the job and remain competitive as well.
Furthermore, it’s important for the concerned parties to ensure that there is a clear evidence base should any decisions to be made regarding the minimum wage in order to attain full adherence to such obligations. I recommend the organizations to utilize modern approaches to meeting the labor standards requirement which regards the issue of paying the employees well at the forefront. The organizations need to establish clear employment terms with the employees whereby full employment should be part of the requirement to be made as well as meeting the minimum wage requirement (Ahn, 2010). A conducive environment needs to be created by the government as well through reducing the charges it subjects to the organizations for instance through overtaxing them. This will help organizations to save money spent in meeting this obligation and therefore will be utilized to pay workers well (Adler & Schmid, 2012).
Conclusion
To sum up, the minimum wage is a critical requirement that ensures that workers whether private or public receive a reasonable pay that will take care of their needs. It is the duty of the government, the companies, the institutions of justice such as courts and the employees at large to work collaboratively in order to ensure that they fight the issue of low wage rate. Companies need to employ workers fully as well as the government to reduce the charges subjected to the organizations in order to put to an end the problem of low wage rate. Poor pay facilitates stress to employees leading to poor performance hence organizations cannot realize the set goals.
References
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