Is there any reason why increasing the minimum wage could potentially be beneficial for the working...

Is there any reason why increasing the minimum wage could potentially be beneficial for the working class and the economy as a whole?

Expert Solution

Explanation:

Increasing minimum wage rate has the significant effect on the economy as whole. When the minimum wage rate get increased the spending power of the working class get increased and they will spend more on consumable goods and services. This does overall good for economy as more money get injected in market.

Example: If a XYZ employer raise its employee’s minimum wage rate from 90 to 100 this will overall be good for economy as the employee will spend more because he has seen increase in his income, thus more spending power will see other business get boost from that increased spending power and tax revenue will get increase, that eventually help decreasing budget deficit for government. Overall this will boost business in economy and because of that more employment chances will get created reducing employment rate.

Increasing minimum wage will lead to lower the poverty rate in country. Increasing minimum wage rate will affect postively on economy as the government will have more tax revenue through income tax and that will reduce the budget deficit of government profiting economy as a whole.

Rahul Sunny answered 2 years ago

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