In the long-run, the increase in supply of labor leads to an increase in the firms’ demand function because capital expands as firms take advantage of the cheaper work force. This causes the wages in the labor market to return back to the initial
There should not be an increase in minimum wage because it is unhealthy to the economy in the long run and it will be the major cause of job loss, increase in inflation, competition, and the price level of goods and services. Many argue that an increase in minimum wage will help guide low skilled workers out of poverty and assist them into having a better career. That is not necessarily true, Many economists can agree that minimum wage jobs such as cashiers, host or a hostess are not jobs that meant to support a family. If anything by raising the minimum wage, it will put more people in poverty than guide them out of poverty. A raise in minimum wage will cause loss of jobs, an increase in the inflation rate, increase in
• Lower Government Acquisitions: Economic growth makes higher assessment incomes and there is less need to use funds on profits. For example, unemployment benefits. Subsequently, it serves to diminish obtaining. Likewise, it assumes a part in decreasing obligation to GDP degrees. DISADVANTAGES Long term financial development puts an awful effect on the inhabitants of any nation.
Having a wide gap between the upper and lower class doesn’t benefit the economy instead has a negative impact on it. For example, according to the Washington Post, “As income inequality grows, more and more resources are concentrated in the hands of the wealthiest. So, the idea goes, the wealthiest are better able to steer policies in directions that protect inequality at the expense of growth”. Because most of the wealth is in the hands of individuals who are at the top they have the power to do things their way. On the other hand, consumer spending plays a role in the economic growth of a country.
He does not believe that it will solve the , present and worrying issue of poverty in the country. It is Hassett's opinion that a wage increase will in fact cause more of a problem and burden the economy greatly . Hassett, also states, it would be a mistake to raise the minimum wage, as it will have a reverse effect. It will cause higher unemployment as a reaction to companies closing sectors, and making present employees redundant. Also , he is of the belief , companies will not hire younger, unskilled labor because, with the increased wage it would become costly.
The more people that are unemployed, the less money being used to buy things which hurts the economy. When people don’t have jobs or are scared about losing their jobs, it affects the way they buy things (consumer confidence, their will to or not to spend their money) which in return, hurts the economy. If the minimum wage is increased then certain businesses won’t be able
If minimum wage is increased the result will be more people getting laid off from work. This will increase the unemployment rate, and it will make it more difficult to find available jobs. Strain argues that workers who earn the minimum wage are generally not the primary breadwinners in their households. When these workers are the secondary earners there is no need to raise the minimum wage. Raising minimum wage will make it more expensive for businesses to hire young workers for low-skill
Immigration comes along with population and opportunities for countries and individuals at the same time. Therefore, it puts both positive and negative effects on individuals as well as on countries, in following paragraphs, so let’s discuss all the positives and negatives of immigration for both sides. Various positives a aspects are found for countries like revenue, cheap labour, skilled and motivated workforce, etc. One of the major advantages is likely the revenue from provided services. According to Kerr and Kerr (2011), Immigrants contribute to enhance the GDP growth rate known as “immigration surplus method “.
It boost the overall productivity and intellect of the labor force. It helps to be sure that a country is competitive in world markets. I will try to find how countries developed and their growth level increased by their education level and how we can implement it in other less developed countries or regions to achieve economic growth. Economic growth will bring at the same
In conclusion, income inequality is a global issue that cause by many factor. Income inequality must to reduce in order to improve economic growth. Economic growth happen when many people spend money. When income inequality is large that means only small part of people are able to consume. It brings little effect to the economic growth as compare to the total spending of whole population.