The Effects of Major Corporations Paying Low Wages (Essay Sample)

The Effects of Major Corporations Paying Low Wages
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The Effects of Major Corporations Paying Low Wages
When employees provide services to a company, they expect to be compensated through salaries, bonuses, pension savings, or other fringe benefits. Ordinarily, large corporations frequently pay low wages relative to their operations, production policies, and other balance-sheet affecting policies. On the plus side, their tax liability is reduced as a result of their low wages. However, this practice disadvantages the affected employees, condemning them to low quality of life, low living standards, and, in extreme cases, poverty. Although large corporations remit low wages to bump their profit margins, this practice negatively affects employee morale, increases production and staffing costs, and leads to high worker turnover rates.
One of the primary reasons large corporations pay low wages to their employees is to increase their profit margins. According to Arulampalam et al. (2012), paying low wages lowers production costs. These businesses use the free labor market to outsource or subcontract jobs to people willing to work for the minimum wage. In addition, as Hellebrandt et al. (2015) note, low wages boost profits by lowering the amount of tax