Increasing the minimum wage

Question 1

Potential advantages

Answer 1

– May reduce relative poverty

– Address, labour shortages in low skilled work

– Higher wage rate and the same or enhance level employment

Question 2

Potential disadvantage

Answer 2

– will only benefit those in employment and on wages below the minimum wage

– May lead to greater unemployment

– Exactly where the wage should be set involved and normative judgement from the government