4.1.6.6 The National Minimum Wage NOTES

What is one primary purpose of setting a national minimum wage?

• To ensure workers are paid at least a certain hourly rate

• To decrease government spending

• To increase the complexity of economic policies

• To reduce the number of businesses

What potential effect does raising the minimum wage have on employment according to some economists?

• It leads to job creation

• It may lead to job losses, especially among low-skilled workers

• It has no impact on employment

• It decreases the number of high-paying jobs

How might businesses react to increased labour costs due to a higher minimum wage?

• By reducing their workforce or cutting hours

• By increasing product quality

• By expanding their operations internationally

• By lowering management salaries

What is a potential disadvantage of raising the minimum wage mentioned in the text?

• More competitive markets

• Inflationary pressures

• Higher employee satisfaction

• Increased investment in technology

According to advocates, how does the minimum wage help reduce poverty?

• By reducing taxes

• By lifting the earnings of low-income workers

• By increasing government subsidies

• By controlling rent prices

What is one advantage of a national minimum wage related to economic growth?

• It reduces the need for social welfare programs

• It stimulates economic growth by boosting consumer spending

• It encourages outsourcing

• It simplifies payroll processing

What could be a consequence of higher minimum wages on consumer prices?

• Decrease in prices due to higher competition

• Increase in prices as businesses pass on higher labour costs

• Stabilization of prices due to government intervention

• Reduction in consumer demand

How might employers react to mandatory increases in minimum wages in terms of staffing?

• By reducing hiring or cutting hours

• By offering more overtime

• By hiring more skilled workers

• By increasing remote work opportunities

What is a social benefit of implementing a national minimum wage?

• It reduces government regulation

• It eliminates the need for unions

• It promotes fairness and equity by setting a wage baseline

• It discourages work in the informal sector

What is a potential negative impact of a higher minimum wage on specific industries?

• Increased global competitiveness

• Potential job losses in industries with narrow profit margins

• Enhanced worker skills

• Increased automation in unrelated sectors