Discuss the Advantages and Disadvantages of Having a National Minimum Wage in a Country You Are Familiar With

Discuss the advantages and disadvantages of having a national minimum wage in a country you are familiar with.

HM Revenues & Customs describes the national minimum wage which sets minimum hourly rates that employers must pay their workers (National minimum wage was first introduced in 1999 and subsequent uprating between 1999 and 2012 by the low pay commission. Although it is widely accepted, the Conservative party and many economists claim that it would lose job and reduce economic competitiveness (Politics, 2012). This essay will discuss the advantages and disadvantages of the national minimum wage in the United Kingdom.

It is generally believed that workers are significant benefits from the national minimum wage. First of all, the national minimum wage supports a basic level of wage to workers and ensures the standard life. According to the public service union, adult rate of the national minimum wage was increased from £3.7 in 2000 to £6.19 in 2012. Introduction and uprating of the minimum wage have the direct impact on the low wage workers whose wages have been raised because of new minimum enforcing (Mark B, S. 2003). Workers who lack of highly education and earn wage in labour are often exploited and abused by their employers, and their right will be ensured due to the national minimum wage. As it was first introduced in April 1999, there were at least 1.9 million people who were paid less than the rate of the national minimum wage.

Another advantage is that workers would like to be motivated to work which lead to a more efficient labour market. It has been pointed out (Alan Manning, 2009) that the minimum wage has no any adverse effect on employment during the initial studies of the low pay commission, and the employment rate showed an upward trend, including younger workers. Employees might take the job in order to earn more money and are willing to work harder. It is an important guarantee of social stability that the employment rate raised.

However, the national minimum wage has some disadvantages. Some people believed that employers are most likely to reduce employment opportunities as the wages councils raised wages and the profitability of firms is reduced. Because of paying more for staff, employees maybe cut jobs to save hiring costs. An instance of this is the US suggested that a 10% increase in the minimum wage directly caused 1.4% reduction in employment levels in the 1990s(Politics, 2012). The increase of hiring costs also is directly reducing the net profit of the company.

The national minimum wage has no major influences on wage inequality (Alan Manning, 2009). Although the national minimum raised the low wage workers' income, workers whose wage higher than the lowest standard do not obtain more payment. Dickens and Manning showed that there are small numbers of employees, just about 7%, are affected by the