Pros and Cons of minimum wage
The National minimum wage rate is currently £6.19 for workers over 21. The minimum wage was introduced in April 1999 and is the legal minimum that employers can pay for an employee.
Minimum wage is determined through different age groups and whether or not you are an apprentice:
£6.19 Workers aged 21 and over
£4.98 workers 18-20
£3.68 workers 16-17
£2.65 - Apprentice rate
The minimum wage can be seen in a very positive way as it reduces poverty. The minimum wage increases the wages of those who are paid the least. These workers will have an increase in income and therefore reducing poverty. It helps increase productivity. It is said that higher wages can increase the incentive for people to work harder and therefore higher wages may increase labour productivity. Increases the incentives for the unemployed to get a job. There will be a bigger difference between the level of benefits and the income from employment. A minimum wage could increase the number of people working who would be on benefits therefore reducing government spending. Minimum wage helps increase investment, firms will have an increase their incentives to invest and increase labour productivity because labour will be more costly.
However minimum wage has quite a few flaws in it; it will cause large numbers of unemployment in the UK. This is because firms will demand less supply of labour due to the fact they will have to pay employees more for their services. Now this may affect many firms such as hairdressers and cleaning companies. It also causes inflation because firms face an increase in costs which is likely to be passed
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