Establishment of businesses in the United States is based on a company’s model but it is subject to numerous regulations. Indeed, businesses and workers are continually impacted by the existence of federal and state regulations. Particularly, minimum wages and safety and health rules determine production and affect business performance in the long run. The existence of minimum wage requirements is quite unnecessary as skills level among employees and market forces should be sufficient to determine wages. The implementation of minimum wage rules affects businesses through lower productivity as they cannot afford to hire many workers. Worse still is in small and start up businesses that cannot afford to pay the minimum wages for the number of workers required. In the end, the existence of minimum wage rules compels businesses to increase their operating costs while minimizing the working capital available.
In the last decade, workers have suffered more from the existence of such business regulations as minimum wages. When such regulations are effected, companies downsize their operations in a bid to reduce cost thus leading to freezing of hiring and retrenchment exercises. However, the implementation of health and safety rules has the benefit of providing more protection to vulnerable worker. In particular, more exposed workers such as those working in the construction industry accrue more benefits as their lives are more secure. A large proportion of casual laborers are entitled to minimal benefits including health insurance and it is therefore important that their safety and health is guaranteed. However, the implementation of these regulations has a negative effect on businesses operating in the United States. For instance, companies with limited protective equipment are forced to work with fewer workers as they increase the cost of production.
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