Question

Discuss the economic impact of minimum wage legislation on the Tanzanian economy.

Answer 1

---> Minimum wages have been defined as the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.

--->Just like any other country, Tanzania also faces similar impact due to minimum wage law. Although minimum wage laws are in effect in many jurisdictions including Tanzania, differences of opinion exist about the benefits and drawbacks of a minimum wage. Supporters of the minimum wage say it increases the standard of living of workers, reduces poverty, reduces inequality, and boosts morale. In contrast, opponents of the minimum wage say it increases poverty, increases unemployment because some low-wage workers will be unable to find work and will be pushed into the ranks of the unemployed and is damaging to businesses, because excessively high minimum wages require businesses to raise the prices of their product or service to accommodate the extra expense of paying a higher wage.