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Market impact(s) on the proposed increase in the federal minimum wage to $10 per hour? Which...

Market impact(s) on the proposed increase in the federal minimum wage to $10 per hour? Which part(s) of the labor market will be helped? Which parts of the labor market will hurt? Discuss the effects of the minimum wage on employment.
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Answer #1

Increase in minimum wage to $ 10 suggests that there shall be rise in supply of labor. Many discouraged workers might jump into labor market again. Thus, number of people looking for job would rise. But demand for labor will decrease as higher minimum wage will inflate cost of production.

New and unskilled workers will be adversely affected most due to rise in minimum wage.

Eventually, unemployment rate in economy will witness sharp rise.

But few studies suggest that minimum wage does not give rise to unemployment, instead it nurture and groom skilled labor force.

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