Question

What are the costs of increasing the minimum wage?

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 2

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