6.6 The National Minimum Wage

What is the National Minimum Wage

The national minimum wage is the lowest legal wage that employers can pay workers, set by the government

What are the advantages of a national minimum wage

• Reduced poverty

• Increasing worker’s standard of living

• Encouraging higher productivity

What are the disadvantages of a national minimum wage

• Potential for increased unemployment

• Higher costs for business

• Possible inflationary pressures

Why might National Minimum Wage lead to increased unemployment

A national minimum wage may lead to increased unemployment because if the wage is set too high, employers may reduce hiring or lay off workers to manage higher labor costs, particularly in low-skilled job sectors.