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To what extent is the national minimum wage beneficial to society?

Always begin answering questions by providing a definition. This is key in economics. Therefore, start by explaining that the national min. wage is the governments guarentee of a minimum wage per hour that is entitled to an adult over the age of 21. 

 Also key in economics. Diagrams. Therefore, following this definition, provide a diagram, showing the minimum wage's effect on the labour market.

-We must then notice this is a 'To What Extent' question, therefore candidates to give arguments for and against the question. I would reconmend beginning with FOR arugment. 

FOR (benefical)

1. Reduces poverty

2. Reduces income inequality

3.Prevents explotation

4.incentive to work, less strain on welfare & more tax revenues. 

5.Worker may be more productive, due to happier working conditions. May also help stop anti-social behaviour.

next we will focus on the NMW being unbenefical for soceity

Against (unbenefical)

6. Raises prices for firms. lowers demand for workers, but increase supply (refer to diagram). Therefore to cut costs, jobs may be scarficed.

7. Firms may pass higher costs onto consumers (could include another diagram) Increases income equality, since is regressive. And may be inflationary. Can contradict this by noting the price elasticity of demand may not cause this. 

8. Deters FDI, as labour costs are higher. could lead to outsourcing

9.Investment in machinery due to higher labour costs, long run unemployment

-Finally, make a very brief conclusion 

Connor S. GCSE Art tutor, A Level Art tutor, GCSE Economics tutor, A ...

11 months ago

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