Question

You may have heard of the recent implementation of increase in minimum wage law in New York State.

1. Explain the meaning of “minimum wage” law.
2. Who is affected by this law? List all affected groups.
3. What would impact of rise in minimum wage on businesses?
4. Should there be a law regarding minimum wage or should wage decisions be left to market forces? Discuss the degree to which wages should be determined by the government.

Answer 1

Meaning of minimum wage law

Minimum wages refers to the minimum amount of income paid by employers to their employees or workers for their performed duties and work during given period. Which cannot by reduced by any means so that they feel motivated or able to support their family. The main purpose of minimum wages law is to protect workers from low wages.

Minimum wage laws affect

Two groups are affected by minimum wages law as given below:-

Mostly the workers as it secure or protect them from low earning in various area as some industries provide very low wages to their workers. Due to minimum wages system workers get fix wages which cannot be reduce by any means.

Minimum wage laws receive less support from Economists reformer than from the general public.

How minimum wages law impact businesses

As increase in minimum wages leads to small businesses to cut down their profit margins or on other hand businesses have to increase their sales volume or to increase prices of their product in order to maintain their stability.

Yes, there should be a law regarding minimum wages as it helps low income group people to increase employment reduce poverty and maintain economy status or increase gross domestic product ultimately creates more jobs.

So it would be good if government maintain this minimum wage law it will help in increase of employment, reduce poverty and raise economy.