How does minimum wage affect employment?

What impact does raising the minimum wage have on employment rates?

Raising the minimum wage can lead to mixed effects on employment. Some studies suggest it may reduce job opportunities, especially for low-skilled workers, while others indicate it can boost worker productivity and reduce turnover.

Are there any specific studies that support these claims?

Yes, several studies have examined this issue. For instance, a study by the University of California found that increasing the minimum wage did not significantly reduce employment in the fast-food industry.

What about small businesses? How do they cope with higher wages?

Small businesses often face challenges with higher wages, but they may respond by increasing prices, reducing hours, or improving efficiency. Some may also benefit from a more motivated workforce.

Is there a consensus among economists on this topic?

There is no clear consensus. While some economists argue that higher minimum wages lead to job losses, others believe the benefits outweigh the costs, especially in terms of increased consumer spending.