Pros and Cons of Raising the Minimum Wage
                     PROS AND CONS OF RAISING THE 
MINIMUM WAGE
C
Understanding Minimum 
Wage
Minimum wage refers to the legally established lowest 
amount that employers are required to pay their 
employees for their work. It serves as a baseline wage 
that is intended to ensure that workers receive a fair 
compensation for their labor, covering basic living 
expenses and preventing the exploitation of low-wage 
workers.
Source: www.investopedia.com
Primary purpose of minimum 
wage
The primary purpose of minimum wage is to provide 
workers with a level of income that allows them to 
meet their essential needs. 
It acts as a safeguard against extremely low wages and 
helps reduce poverty and income inequality within a 
society. 
Source: www.investopedia.com
Factors
National and sub-national government entities analyze 
several factors when considering whether to raise or 
maintain the current level of minimum wage. 
As the general increase in prices over time, inflation 
can erode the purchasing power of wages.
Source: www.investopedia.com
Pros of Raising the Minimum 
Wage
The primary argument advanced in favor of raising the 
minimum wage is that higher earnings would improve 
the overall standard of living for minimum wage 
workers by providing them with a more appropriate 
income level to handle the cost of living increases.
Source: www.investopedia.com
Cons of Raising Minimum Wage
Among the disadvantages of increasing the minimum 
wage is the probable consequence of businesses 
increasing prices, thus fueling inflation.
Source: www.investopedia.com
How Does Minimum Wage Affect 
the Economy?
Supporters argue that increasing minimum wage can 
stimulate consumer spending and boost the overall 
economy by putting more money in the hands of low-
wage workers. 
Critics, on the other hand, warn that higher labor costs 
might lead to job cuts, automation, and increased 
prices for goods and services.
Source: www.investopedia.com
Is Minimum Wage the Same for 
All Workers?
No, minimum wage laws often take into account 
different categories of workers. For example, there 
might be different minimum wage rates for adult 
workers, minors, or workers in specific industries.
Source: www.investopedia.com
Does Inflation Impact Minimum 
Wage?
Yes, inflation can erode the purchasing power of 
minimum wage over time. To address this, some 
governments index minimum wage to inflation rates. 
This means that the minimum wage is adjusted 
periodically to ensure that its real value remains 
relatively constant.
Source: www.investopedia.com
How Does Minimum Wage Affect 
Small Businesses?
The impact of minimum wage increases on small 
businesses can vary. Some small businesses might 
struggle to absorb the additional labor costs, potentially 
leading to layoffs or reduced hours. 
Others might adapt by increasing prices or finding 
operational efficiencies to mitigate the impact.
Source: www.investopedia.com
THANK YOU
C