Th3.5: Arguments for the National Minimum Wage

Question 1

What are the first three arguments for the national minimum wage?

Answer 1

reduce poverty
reduce male/female wage differentials
loyal to the business

Question 2

What are the final three arguments for the national minimum wage?

Answer 2

more content workforce
‘unemployment trap’
fair wage

Question 3

Reduce poverty

Answer 3

the wage is able to reduce poverty as it mainly impacts the lowest wages and ensures that these people have enough to live on

Question 4

Reduce male/female wage differentials

Answer 4

reduce male/female wage differentials as women are more likely to take up lower paid jobs (more flexible hours) and so a minimum wage is able to decrease the gaps between men and women

Question 5

Loyal to the business

Answer 5

it may make employees less likely to leave their job as they feel more loyal to the business, which will decrease labour turnover and therefore recruitment/training costs. this will increase profit but is a weak argument since if they are offered a higher wage elsewhere, they will leave

Question 6

More content workforce

Answer 6

more content workforce who will be more motivated and, thus making the business more productive and increasing its profits. however, this assumes all people are motivated by money and this is not necessarily the case

Question 7

‘Unemployment trap’

Answer 7

moreover, a minimum wage provides an incentive to work and prevents the ‘unemployment trap’, where benefits are higher than the wage people would otherwise receive

Question 8

Fair wage

Answer 8

it ensures everyone receives a fair wage and is not exploited by being drastically underpaid