Nowadays many companies and citizens are damaged by the financial crisis. Companies have troubles with keeping their employees employed. Currently a discussion is going on in Ireland to reduce minimum wages. This wage reduction may encourage small businesses to recruit new employees. This discussion was started by some senior government ministers. By reducing minimum wages the unemployment in Ireland is supposed to go down, which might solve partially the crisis in this country.
A discussion on the morality of this matter can be started. On the one hand you have the financial crisis, which causes companies to fire employees; when decreasing the minimum wages, this problem can be solved. But on the other hand, you have the hard working people who earn less because of this wage reduction, while the pressure at work may even increase because less people are employed at the moment.
A typical moral hard case is presented here. A government of a country has the duty to make sure that its citizen’s wealth is maintained. This is performed for example by trying to maintain a healthy economic climate, as well as providing social services. The government pleads for a decrease in minimum wages, so that small businesses are more likely to hire new employees. By doing so the unemployment will decrease and therefore the economic climate will be better. In my opinion the government should decrease the minimum wages in order to keep the economy going. Of course, people will earn less at this moment, but as soon as the crisis is over, the wages could be increased again. In times like these the government should do everything to avoid an economy to fail. This a possible temporary solution for the problem in my opinion. Should the government choose for the decrease in minimum wages, or should they seek other measures?
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6 comments:
I think it is morally wrong that the government of Ireland suggests such a reduction in minimum wage to stimulate the economy again in these hard times. I totally agree with the fact that you negatively affect the hard working people that work against the minimum wage. That is morally wrong. Ireland is the second richest country in the EU, but the system for social security belongs to one of the worst within the EU (Ministerie van Sociale Zaken). So the government should act responsible and morally right and change the social system, instead of lowering the minimum wage. This in the long run makes the social system even worse. They owe it to the next generations. People should have social securities. From the Utilitarian point of view, the most happiness is generated by making the situation better in the long run. Not by introducing a short run adjustment.
S760912
In my opinion it is morally permissable to reduce the minimum wages for a while as long as the employees who receive the minimum wage still can live a decent life. This means that the minimum wage should not be reduced to such an extent that the people receiving it cannot buy the basic products anymore (like food and clothes).
Furthermore, I think that stimulating the economy via a reduction in minimum wage eventually helps to overcome the economic crisis faster, and this of course benefits a lot of people. Or to say it otherwise: reducing the minimum wage on a temporary basis helps to eventually create a higher level of utility for a lot of people, and therefore it should be applied (of course under the condition that people still can live a decent life under the reduced minimum wage, as was mentioned earlier).
In my opinion it is wrong that the government of Ireland suggests to reduce the minimum wage. It is already said by Menno, this is maybe only a solution for the short term. But what happens when the economy is going up again? If you look to the Netherlands ex minister Kok decided to add excise on the petrol “kwartje van Kok”. But now many years later, the old problem is already solved, but still al the Dutch people are paying the same amount extra for petrol. Why? It is always fine to have some extra money as insurance. If we go back to Ireland, in my opinion it is better to do something to the asocial high wages in a company then get it from the hard working people. Minimum wage is made for people to ensure that everyone can have a decent life.
‘Poor people are workless people’
Like Menno said: ‘the Utilitarian point of view, the most happiness is generated by making the situation better in the long run. Not by introducing a short run adjustment’ And since Ireland has not known such high number of unemployed people (7.8% of the labor force in 2008) since 10 years, they need to lower minimum wages for a certain period. Due to the fact that the grow of the economy will be less if less persons work, this idea helps by creating more jobs and therefore more people can work and spend money. And the economy will be straightened earlier. Also, the decline in economy does not fall on 7.8%of the labor force, but on a higher percentage. So more persons notice this impact in their wallet, but less than when only 7.8% has to cover it, which is morally correct.
s244744said... “In my opinion it is morally permissable to reduce the minimum wages for a while as long as the employees who receive the minimum wage still can live a decent life...”The current minimum wage is not just some random number. It is based on the costs to cover people's basic needs and is barely enough for people to come by. In these times of economic crisis cost of living has only gone up and therefore reducing the minimum wages is not an option.
If it would indeed decrease unemployment, it would still lead to a situation where many people are living in poverty; bringing along all of the corresponding problems. I agree with s550209's comment that it is usually very hard to reverse these kinds of measures and so by reducing minimum wages you're creating a foundation for poverty in society. Putting so many people in this position while there are – in my opinion – other ways to deal with the problem, is morally wrong.
I do believe it is the government's task to do everything within its power to moderate the economy in times of crisis. However, there are other - more constructive ways – of doing so. For instance by investing in (re)education or by creating more employment by improving the country's infrastructure (like in the US.)
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