Written Assignment Unit 2 - Microeconomics .docx - Written Assignment Unit 2 Microeconomics Question 1 The majority of the countries around the world

Written Assignment Unit 2 - Microeconomics .docx - Written...

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Written Assignment Unit 2 - Microeconomics Question 1:- The majority of the countries around the world have some form of minimum wage (price floor), and there have been numerous arguments for & against the implementation of minimum wages, and that by increasing the income of low-income workers, the minimum wage can be used as an instrument to reduce and alleviate poverty in addition to inequality. There is also a view that increasing the minimum wage would have a positive effect on household spending, lead to increased GDP and reduce welfare spending by governments. There could also be some negative consequences of increasing the minimum wage, for example, an increase in the prices of consumer goods. However, focussing specifically on the workers, government policymakers argue that these wage increases can improve workers’ productivity as they lead to increases in work effort, reductions in job turnover and more on-the-job training. However, there have also been studies that found that increases in minimum wages without commensurate increases in labor productivity could lead to potential job losses in various sectors. The main reason provided for this is that the poor workers (those who earn less than minimum wage) who are the people
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