Minimum Wage Macro-Economic Changes Essay
Task
The chancellor said employers would be forced to pay staff a minimum of £7.20 an hour from next April 2016, and raise wages by 6% a year on average to around £9 an hour by the end of the year 2020.
1. How the changes to minimum wage could possibly affect the unemployment rate
2. What will be the macroeconomic effects of minimum wage change in the economy?
Introduction
In this report I am going to highlight how the increase of the minimum wage could possible affect the unemployment rate and how it will also effect the economy as a whole. I will highlight advantages and disadvantages of the minimum wage being increased and will also explain how the macroeconomic effects of minimum wage may change the economy. In this report I will also …show more content…
From April employers will be forced to pay their employees a minimum of £7.20 per hour, but will the change in minimum wage affect unemployment rates? I believe that the answer is yes. It is said that if the minimum wage is increased by April 2016 it will only increase unemployment rates. If the minimum wage is increased to £7.20 how long until it effects running costs of the employer? I previously worked at the cinema Odeon and was earning £5.74 an hour. If my employer hires ten employees to work for 20 hours of this week they are going to be paying £1148. Now if the minimum wage is increased to £7.20 instead of paying £1148 to ten employees for 20 hours they will be paying £1440 which is a £292 increase in costs. This will mean that the employer will have to pay more for the same quality of work they were receiving. This could impact the organisation as a whole and cause for many price increases. This could also costs many jobs in many organisation to make costs more manageable throughout the business as a whole. I believe the change in minimum wage will most certainly affect unemployment rates. I think that less people will be able to get jobs because employers will not want to employ to save the organisation money. I believe that unemployment rates will be steady when minimum wage is first increased but slowly increase over time in correlation with my theory of employers not wanted to employ as many workers to save
The chancellor said employers would be forced to pay staff a minimum of £7.20 an hour from next April 2016, and raise wages by 6% a year on average to around £9 an hour by the end of the year 2020.
1. How the changes to minimum wage could possibly affect the unemployment rate
2. What will be the macroeconomic effects of minimum wage change in the economy?
Introduction
In this report I am going to highlight how the increase of the minimum wage could possible affect the unemployment rate and how it will also effect the economy as a whole. I will highlight advantages and disadvantages of the minimum wage being increased and will also explain how the macroeconomic effects of minimum wage may change the economy. In this report I will also …show more content…
From April employers will be forced to pay their employees a minimum of £7.20 per hour, but will the change in minimum wage affect unemployment rates? I believe that the answer is yes. It is said that if the minimum wage is increased by April 2016 it will only increase unemployment rates. If the minimum wage is increased to £7.20 how long until it effects running costs of the employer? I previously worked at the cinema Odeon and was earning £5.74 an hour. If my employer hires ten employees to work for 20 hours of this week they are going to be paying £1148. Now if the minimum wage is increased to £7.20 instead of paying £1148 to ten employees for 20 hours they will be paying £1440 which is a £292 increase in costs. This will mean that the employer will have to pay more for the same quality of work they were receiving. This could impact the organisation as a whole and cause for many price increases. This could also costs many jobs in many organisation to make costs more manageable throughout the business as a whole. I believe the change in minimum wage will most certainly affect unemployment rates. I think that less people will be able to get jobs because employers will not want to employ to save the organisation money. I believe that unemployment rates will be steady when minimum wage is first increased but slowly increase over time in correlation with my theory of employers not wanted to employ as many workers to save