Question

please use your own words and be original

Analyze the pros and cons of raising the minimum wage. What position do you support for our economy and explain your reasoning?

Answer 1

Rising Minimum Wage
The minimum wages and its effect have various and negative results. A very less minimum wages will reduce the utility of the labor and could reduce the productivity per labor. Also, a high wage rate increases the demand for commodities but have increase in price not only because of the increased demand, but also of the increased cost for labor. Also, the reduction or increase has pros and cons depending up on how highly the minimum wage is increased or decreased.
A less minimum wage could help the firms to produce at lower cost of production. A slight increase in the minimum wage could help the economy to demand further since the purchasing power of labor increases. But it will also have a small effect on the price of output due to the change in wages, which is not high. But a higher increase in minimum wages will further increase the price of the commodity and leading to a reduction in the demand for commodities. Also a high minimum wage will leads to limiting the firms from reducing wages at the time of recession to manage the shock.
It is always good for an economy to keep an optimum level of minimum wage which could rectify the problems of both less and high minimum wages. An optimum level of minimum wages could help the producer not to incur high cost of production and also the labor to have a required minimum return for their contribution. This can manage the demand and supply of the economy better efficiently.