Money Wage Rate
The minimum wage can also increase employment levels. Keynesian economics states that the minimum wage could generate a multiplier effect on consumption, as the lowest paid(mainly teenage workers) tend to have a higher marginal propensity to consume.
This can lead to increased employment levels due to higher derived demand for labour. Productivity will also increase if employers seek to gain higher returns from the now higher-paid workers by providing more training.
Reduce labour turnover
Increasing the minimum wage can reduce labour turnover, thus reducing labour costs. The efficiency wage theory states firms may be discouraged to offer lower wages for existing employees, as it can encourage them to quit. It can be costly to hire new workers due to investments in training and the fact that new workers may not be as good.
Paying existing workers higher wages can motivate employees to work harder and be more productive. So demand for workers could remain constant despite of the minimum wage, and increased revenue can encourage firms to take on new workers, increasing employment. As firms are paying their employees higher wages, they may have an incentive to make them more productive by investing in their human capital.
The profit maximising point for the employer is where the MRPL=MCL, and this results in a lower wage rate and lower employment levels than it would be in perfect competition.
Minimum Wage can Increase the number of jobs
In a monopsony, workers are being paid less than their marginal product- they are in effect being exploited. When the minimum wage, is implemented in the market, the monosynist faces horizontal labour supply. The minimum wage becomes the new marginal cost of labour. Therefore the employer must employ more workers until in order for MRPL to match the new MCL.
- Send Money To Iran
- Boy Car Dont Girl Girl Like Like Money
- E Money Directive
- Money Market Account Review
- Grant Money To Purchase Business
United Methodist Church Zimbabwe
