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What are the positions on a minimum wage?
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Minimum wages reduce employee turnover

Employers save money on training due to higher employee retention.

The Argument

Professors of economics, Dube, Lester, and Reich’s 2012 study found substantial income increases and employee turnover falls after minimum wage rises. [1]. Proponents argue that paying minimum wage reduces employee turnover because workers are able to earn a decent living and are satisfied with their income. With a minimum wage, employees are provided with a stable monthly income around which they can plan their living expenses. Low turnover rates are especially evident when the economy stagnates or is struggling because the security provided by minimum wage regulations creates a degree of stability to the employee, and incentivises them to remain at the job. High turnover rates are most commonly attributed to low wages and lack of benefits [2]. Without a minimum wage, employers can take advantage of the competitive labour market to find the cheapest labour and make it easy for employers to exploit employees under the guide of market competition. Minimum wages prevent this kind of employee exploitation and creates a healthier working environment. The minimum wage reduces work exploitation, creating greater satisfaction, and thus reduces employee turnover rates. The reduced turnover rates associated with minimum wages also makes business sense, as employers save money which would otherwise be spent on finding, hiring, and training new employees. As the saying goes, time is money, and high turnover rates waste a lot of time and money for both the employer and employee. Research by the Center for American Progress [2] finds that business will spend approximately one-fifth of an employee's salary to replace a worker, and may lose more money due to slower productivity of new workers in training. Paying a minimum wage therefore saves both employer and employee money by lowering turnover rates.

Counter arguments

Employees earning minimum wage are not incentivised to stay in the job unless there is a clear path to wage increase.



The minimum wage reduces employee turnover only where the wage rate reflects the real cost of the living in the area and thus ensures that a minimum wage job will cover basic expenses.


[P1] If people are paid a minimum wage which meets their needs, they will have little reason to change jobs. [P2] Having a set minimum wage decreases turnover rates.

Rejecting the premises

Further Reading

For more information on employer, employee and consumer effects of the minimum wage, see [3]


This page was last edited on Sunday, 7 Jun 2020 at 20:18 UTC

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