The Negative Impacts Of Raising Minimum Wage

Minimum wage is a relatively new concept in the labour market. It was created with the idea that minimum wage will be a stepping stone into a better paying job in mind. As the years have gone by, minimum wage jobs have evolved from supporting teenagers and giving them the necessary experience in the work field to supporting families. It’s this change in dynamics that fuels the argument that minimum wage should increase to a living wage. What people fail to realize is that minimum wage exists for a reason and should it be increased; the positive impacts are outweighed by the negative impacts in the economy. Raising the minimum wage increases cost of inputs and if we assume that businesses want to maximize profits, the business will find ways to counterattack that increase. However, many consumers that support raises in the …show more content…
The following paragraph explains why raising the minimum wage is a bad idea.
Let’s start off with the impact of raising the minimum wage on the demand and supply curve. The demand curve slopes downwards, hence, when you increase the price of an input, the quantity desired decreases (Van Doren, 2015). Such is the case for minimum wage, when the price to hire inexperienced workers increases, the incentive to hire those workers decreases.
Furthermore, with the increased input costs, employers are also more inclined to reduce