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... substitute labour for capital and shareholders may move their investment to less labour intensive industries, resulting in higher levels of unemployment. The Government must keep a watchful eye on all of these factors to recognise when the negative effects of the NMW outweigh the positives. When the costs of the minimum wage begin to overshadow the benefits that we have seen up to this point, it is vital that the Government either slows the NMW growth or decreases the wage floor to an economically safer level.
National Minimum Wage
Answer to the question: Can the NMW continue to rise faster than earnings?
Details
| language |  | english |
| wordcount |  | 2401 (cca 6.5 pages) |
| contextual quality |  | N/A |
| language level |  | N/A |
| price |  | free |
| sources |  | 8 |
Table of contents
Page 1 -Intro
Page 2-4 Models and evidence
Page 5 -Conclusion
Preview of the essay: National Minimum Wage
In April 1999, a National Minimum Wage (NMW) was introduced to the UK labour market following the election of Tony Blair’s Labour Government two years earlier. This was the first time that the UK had an economy wide minimum wage and therefore the effects that it would have on the UK labour market were uncertain. Between 1999 and 2002 the minimum wage increased at a similar rate ...... substitute labour for capital and shareholders may move their investment to less labour intensive industries, resulting in higher levels of unemployment. The Government must keep a watchful eye on all of these factors to recognise when the negative effects of the NMW outweigh the positives. When the costs of the minimum wage begin to overshadow the benefits that we have seen up to this point, it is vital that the Government either slows the NMW growth or decreases the wage floor to an economically safer level.
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Economics
/Economics
/Microeconomics
/Comments
Princess R.If I were to be asked in the question posed by the author: if NMW can be as faster as earnings. The answer should be in the negative. Wage inequity will still be a perennial problem throughout the years.