Demand & Supply , Examine the Argument in Favour & Against Minimum Wage Law in Uk Essay

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* BUSINESS DECISION ANALYSIS* * London* *School*of Accountancy & Management Course Instructor: Prof. Armaan Nehal. N. Panchasara (ID no: ST0005944) Masters of Business Administration Assignment: A * (Using Demand & Supply: examine the arguments in favour & against minimum wage law in UK*) * *Total words: 1,402 Demand It refers to the willingness and ability of buyers to purchase goods and services at different prices. Supply It refers to the willingness and ability of sellers to provide goods and services for sale at different prices What* *is minimum wage? A minimum wage is the lowest monthly, daily or hourly that employers may legally pay to their employees or …show more content…
Does not improve the situation of those who suffer from poverty, it benefited some at the expense of the poorest and least productive. It gave a limitation on the freedom of both employers and employees, and can result in the exclusion of certain groups from the labour force. As a labour market is parallel of political-economic protectionism, it excludes low cost competitors from labour markets, hampers firms in reducing wage costs during trade downturns, and generates various industrial-economic inefficiencies as well as unemployment, poverty, and price rises, and generally impairment of functions. Reduction in quantity demanded of workers, either through reduces in the number of hours worked by individuals, or through reduces in the number of jobs. A NMW set above the free-market wage for certain groups raises the marginal cost of employing people - so firms will cut jobs, reduce hours of work for employees and unemployment will rise. Other workers will demand higher wages to maintain pay differentials (this is known as "pay leap-forging"). An increase in the total wage bill may cause cost-push inflation and damage the price competitiveness of UK producers in international markets. Young and low-skilled workers will lose out - firms will tend to employ older workers whose experience is greater. There will be a substitution effect of