Business Administration and Controversial Issues in the Society
Business administration refers to how a business is manned; it is simply the way day to day activities in a profit making organization are handled. The phenomenon has many aspects surrounding it, these are basically all parts that compose any business organization (e.g. human resource and finance). The duty of business administration is now to monitor the progress of all the departments within the organization, mark the progress against its competitors, ass’s growth or reduction rates, mark decisions and implement them to the latter (Edel, 2017). For its role to stand out in an organization, the department must regularly have an updated check on the finance of the whole institution. Failure to that, the whole administration will lack efficiency thus end up being irrelevant. Business administration is the cog rotating the wheel of wage distribution and disruption; a controversial issue that has raised eyebrows locally and internationally. Relation between business administration and wage bill is mutual in the management knowledge but the general public view it as a symbiotic relationship; they presume the managements are often if not always inclined reduction of their wages so as to get more profit.
It is true management holds a bearing to wage bill and this point can be backed up the logic that no employer enjoys getting loses and still pay his employees a large salary. Wage can is defined as the amount of money an employer is required to give his employees for the work performed during a given period which cannot be deducted by a collective agreement or any individual contract (Edel, 2017). Minimum wage now refers to the minimum pay directed by the law; labor laws, which are universal. This definition refers to the binding forces around of minimum wages no matter the procedure used in fixing them. Minimum wages can be stipulated by the national governments decision reached from a discussion with competent authorities, wage boards, wage councils. Industrial courts, labor courts and economic related tribunals also influence these kind of laws (Edel, 2017).
The wages can also be set by giving the force of law to provisions of collective agreements. The major aim of the laws of minimum wages is to shield workers against unduly peanut pay. They ensure a just and equitable dividend of the profits to all and a minimum if not sustainable living wage to all who are legally employed. Laws on Minimum wages are also meant to act as smooth policies to reduce poverty and lower economic inequality rates including those between men and women. This will be achieved by promoting the right to equal remuneration for work done; the helps maintain the value chain for across the business sector. Minimum wage systems should not be seen or used in isolation but should be designed in a way to supplement and reinforce other social and employment policies (Dierksmeier ; Amann ; Von Kimakowitz ; Spitzeck ; Pirson ; Von Kimakowitz, (Eds.). 2016). There are several types of measures can be used to tackle income and labor market inequality including pro-employment policies social transfers and creating an enabling environment for sustainable business organizations. The aim of minimum wage laws is to lay a foundation for other labor and industrial laws and should also be distinguished from collective bargaining which can be used to set wages.
Economics states that too much emphasis to minimum wage is a detrimental idea to the general job market. Elementary economics suggests it to be treated like any other market that is naturally driven by supply and demand forces and not by other exclusive factors like government laws and bad policies. Just as the governments do not set minimum prices of basic commodities, they should not dictate the minimum pay employers give their workers. Standard economic theory states that; forcing minimum wage laws to work undermines the government; risks scaring away the employers and this will eventually hurt the workers as well degrade the economic growth. A recent study found out that a steep rise in the minimum wage in Seattle companies led to loss of jobs and few working hours (Dierksmeier ; Amann ; Von Kimakowitz ; Spitzeck ; Pirson ; Von Kimakowitz, (Eds.). 2016). This the exact outcome of what earlier economics scholars had said will happen if the forces of supply and demand would not be allowed to take course.
A heated debate within the economics circles, primary complaint was that workers who may have benefitted from the rise in wage were simply excluded from if not totally ignored in the analysis. The continuation of minimum wage debates and controversies in the modern times has taken new twists as economics dynamics are totally different along different geographic places. The heat intensifies as one faction wants the laws to be totally abolished while another wants them to be less stringent and local. Issues like the design of health insurance, tax policies and reform to entitlement are more vital policies than the stress applied on minimum wage (Guthrie ; Hart ; Ray ; Candoli ; Hack, 2017). For minimum wage laws to be standardized, all markets must be left to exist and operate freely. Only after all modern economic dynamics have studied and put into consideration is when the laws can be freshly formulated and implemented. If not, the cycle of industrial revolt will be a recurrent matter and the revolutions will be bigger and fiercer than the previous ones.
Tracing the beginning of workers revolt in the 19th century that led to formulation minimum wage laws would be tedious but among issues that led to it were; long work hours, low wages and lack of proper insurance. Workers unions were nonexistent and social reformers to advocate for a variety of laws to protect factory workers were inefficient. This led to the formulation of first minimum wage laws between 1890 in New Zealand and Australia and the in the United Kingdom I 1905. The laws were not as bid and effective as they are currently as they were med for certain industries like mining and farming (Guthrie ; Hart ; Ray ; Candoli ; Hack, 2017). 1910 is the year when minimum wage laws were introduced in the United States of America. That time they only worked in some particular states where for women and children used to fall victim of underserved payment of wages. That time men were assumed to fall outside paternal protection. Back in 1940s the United States of America stipulated a minimum wage in of twenty five cents per hour but it had to be raised as years went by due to inflation and ever changing economic times.
Since the onset of was minimum wage debates it was clear that it would be a fire baptism for economic theory. It got so intense that the impact of the minimum wage bills worldwide had to be critically analyzed statistically by examining what would eventually happen to jobs if the minimum wage was inconsiderably increased. The research generally noted that a wage minimum law would alter if not totally remove some job types from the vast economy. Let us say the overlooked the numbers as they did not see the need of breaking down the numbers. On that they agreed though they were unsure of the exact jobs that would be affected directed (Junqing ; Zuhui ; Yongxiang, 2003). Mathematical analysis started to be of interested as a curve was drawn from the figures of 1970, 1980 through early 1990s.By late 1980s it was universally agreed that the minimum wage laws had a negative and detrimental impact on employment and the economy at large.
A poll of done by graduate students of the top economics programs in the across all universities in the United States of America in the year 1987 revealed that more than 70% of economists, business men and national leaders agreed that the minimum wage eventually lead to unemployment mostly in youths and unskilled workers. Only 18% of the population that took part in the poll disagreed and a further 9% did not have any opinion on the topic. The secondly turning point in the minimum wage debate was in the year 1993 when David Card and Allan Krueger; first class economists at Princeton university published the controversial paper minimum wages and employment: this was a case study on the fast food industry located in New Jersey and Pennsylvania (Junqing ; Zuhui ; Yongxiang, 2003). It was examining the impact of minimum wage increase in New Jersey that was from $4.25 to $5.05. The information was matched against the labor market effects for New Jerseys fast food workers with other fast-food workers from eastern Pennsylvania where the minimum wage had not been raised. They noticed no difference between them the two sets. Card and Krueger proceeded to publish the seminal titled myth and measurement. The book was like the new revelation to the minimum wage discussions in which they courageously staged a broad defense from their statistics. They found that the results from natural experiments like ones in their New Jersey report did not match steep increase to the minimum wage leading to a fall in employment; in fact they said that the minimum wage had a positive effect on employment. Research taken in earlier years said that the argument was flawed because it relied on poorly collected data and statistical techniques that largely isolated the effect of the minimum wage in contrast to other factors.
“As no physicist would claim that water runs uphill no proclaimed and respected economist would claim that increases in the minimum wage increase employment. Such a misleading claim if seriously followed to the later becomes leads to an assumption that there is no scientific content in economics and that in result economists can do nothing else but write as advocates for ideological interests.” The invalidation of a long-held economic theory is explained under the phenomenon called monopsony where the market of labor functions differently from the market of other goods (Junqing ; Zuhui ; Yongxiang, 2003). Companies are therefore forced to pay for labor at the same rate of buying stocks but to some extent they control the prevailing labor price because there is only one seller who sets the pace price for the labor and to have more workers, the seller sets the labor price a bit higher by a dollar or two. This makes the company continue being profitable and retain most of their workers while the companies that remain at the labor price become a bit no-profitable. The increase in wage should be a universal thing as the workers being paid will have a high living standards which can beat inflation. However, the imbalance is shown through gender and race based inequality (Junqing ; Zuhui ; Yongxiang, 2003). The minimum wage especially for companies with set compensation budget should be raised and this way the workers would have enough to invest and be productive. The companies will also be more profitable and invest in technology which will increase productivity and in return wages for the workers will be increased in the long-run.
Edel, A. (2017). The theory of business enterprise. Routledge.
Dierksmeier, C., Amann, W., Von Kimakowitz, E., Spitzeck, H., Pirson, M., ; Von Kimakowitz, E. (Eds.). (2016). Humanistic ethics in the age of globality. Springer.
Guthrie, J. W., Hart, C. C., Ray, J. R., Candoli, I. C., ; Hack, W. G. (2017). Modern School Business Administration: A Planning Approach (Peabody College Education Leadership Series). Pearson.
Junqing, L., Zuhui, H., ; Yongxiang, S. (2003). TMT Pay Gap, Firm Performance and Corporate Governance J. Economic Research Journal, 4, 31-40.