Labour Markets Flashcards
1
Q
ADV of NMW?
A
o Prevents exploitation
o Reduces in-work poverty and inequality
o Incentivises firms to invest in labour productivity-enhancing capital
o Boosts motivation amongst workers leading to enhanced productivity
o Can remove discrimination
2
Q
DSVNT of NMW?
A
o Can create unemployment
o Unemployment may be concentrated amongst low-skilled workers/ reinforcing existing inequality
o Certain sectors affected more than others (e.g. careworkers, hospitality, retail). Higher wage
costs may lead to falling profits and business failure
o Where firms pass on higher labour costs to consumers via product prices, this may be regressive.
o Administrative costs/ along with policing and prosecuting firms that break the rules
