Question

What are the costs of increasing the minimum wage?

What are the costs of increasing the minimum wage?

Homework Answers

Answer #1
  • Minimum wage refers to the minimum amount that an Employer is required to pay to his Employees for the work performed.
  • These minimum wages are aimed at rising the standards of living.
  • It increases the demand and the wages.
  • But raising the minimum wages can lead to various disadvantages.
  • Due to higher minimum wage set by the government, the Employers who have lower budgets are forced to lay off some of their Employees to remain competent.
  • This will create unemployment for those people as they find it difficult to seek new jobs.
  • The companies incur increased cost due to higher minimum wages.
  • They try to pass these costs to consumers by increasing the prices.
  • This reduces the demand and the standards of living because cost of living increases.
  • Due to higher minimum wages there are no new job opportunities for the freshers in the business markets.
Answer #1

Increasing the minimum wage is expected to lift individuals out of poverty and improve work ethic, however, it also comes with many possible negative implications, such as inflation and a loss of jobs.

answered by: Jack Hum
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