national minimum wage

• What are the two opposing viewpoints that will be discussed regarding the enactment of a national minimum wage policy?

  The for and against points
• What is one of the key reasons why governments impose a minimum wage?

  Reducing poverty and the gap between rich and poor
• In a basic labor market diagram, where does the government set the minimum wage to be effective?

  Above the equilibrium wage level
• How does a minimum wage impact those who are paid very low wages?

  It boosts their earnings and incomes
• What does the implementation of a wage floor above the equilibrium incentivize?

  It creates an incentive to work
• What is one of the fiscal benefits to the government of implementing minimum wages?

  Reduced benefits payments and increased tax revenue
• How might workers' morale be affected by getting a higher minimum wage?

  It could lead to higher productivity
• How might firms respond to the higher cost of employing workers due to a minimum wage?

  Boost workers' human capital
• How can a minimum wage counter negative outcomes imposed by a monopsonist employer?

  Wages will be higher and employment potentially higher
• What is a major potential negative consequence of a minimum wage?

  Unemployment
• What term do classical economists use for the unemployment caused by a minimum wage?

  Classical unemployment or real wage unemployment
• Why is unemployment likely to be caused by a minimum wage?

  Supply of labor exceeds demand at that wage
• Which demographic is likely to struggle the most with a minimum wage?

  The youth
• What is the main purpose of government intervention in labor markets through a national minimum wage?

  To redistribute income and make outcomes more equitable
• Why might the youth struggle the most because of a minimum wage?

  Lack of experience, skills, and productivity
• What is the 'hysteresis impact' regarding youth unemployment due to minimum wage?

  Difficulty gaining skills leading to long-term unemployment
• What should be questioned to evaluate the unemployment impact of a minimum wage?

  The elasticity of demand and supply of labor
• How might workers already earning above minimum wage be affected?

  They may demand higher wages to maintain pay differential
• What is a risk to the economy caused by workers demanding higher wages?

  It can increase business costs and potentially inflation
• What are some potential risks for businesses due to higher minimum wages?

  Bankruptcy or relocation
• Why might the UK economy lose its competitiveness due to minimum wage?

  Firms translate higher costs into higher prices
• What is one argument against a national minimum wage regarding regional differences?

  It may not account for regional cost of living
• Why might the government see a hit from implementing a minimum wage?

  It employs many low-paid workers
• What is the function of a minimum wage as a wage floor?

  It prevents wages from falling below a level
• Why might workers demand higher wages when a minimum wage is introduced?

  To maintain the wage differential
• What kind of power do monopsonies have?

  Wage making power
• What is the term used to describe the fiscal benefits a government receives from a minimum wage?

  Fiscal dividend