n     Minimum wages may have the positive effect of:

  n    Reducing low-paid work, which may be unfair and exploitative.

  n    Stimulating economic growth by increasing the purchasing power of workers.

  n    Stimulating economic growth by discouraging labor-intensive industries, thereby encouraging
  more investment in capital and training.

  n    Encouraging many of those who would normally take low-wage jobs to stay in (or return to)
  school and thus to accumulate human capital.







On the other hand, minimum wages may have the negative effects of:

  n    Curbing economic growth by increasing the cost of labor.

  n    Increasing the price of goods and services, since employers may be able to pass on wage costs
  in the form of higher prices, which means that minimum wage may decrease the purchasing power of
  workers, which may also result in the exploitation of the consumer.

  n    Decreasing incentive for some low-skilled workers to gain skills.

  n    Where implemented locally, making labor more expensive than in other areas, which may
  discourage inward investment and encourage local businesses to relocate their operations
  elsewhere.

  n    Cause higher unemployment rates among the low skilled and uneducated labor as the price of
  labor increases to favor the more skilled or machines.

  n    Cause workers laid off because of higher labor costs to consume government assistance thus
  increasing the cost of government

                                               TEZE 1

n    In fact, the power of the minimum wage to kill jobs has been greatly overestimated. Nowadays,
most labor economists will tell you that that minimum wages have at most a tiny impact on
employment.



                                               TEZE 2

n    two-thirds of academic economists at top universities agree with the statement, "a minimum wage
increases unemployment among young and unskilled