The more people are paid, the more they can spend. When people spend more, industries profit.
Higher wages mean less people need government help such as Medicaid, food stamps, and federally subsidized housing.
However, when the minimum wage increases, employers may cut down on their number of employees.
When the lowest wages are raised, that tends to raise other wages as well.
So if the federal government decided to increase the minimum wage by $1/hr, what could be some economic affects of that?
I already thought of the fact that people will get paid more, but I can't think of any more. Can you help?
3 answers
Oh wow, I never even thought of that. Thanks! :)
You are welcome.