Effects Of Abolish Minimum Wage

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Abolish Minimum Wage

According to the Minimum Wage Review 2015, conducted by the Ministry of Business, Innovation and Employment (MBIE), when the minimum wage was set at $14.75, 74,900 people were impacted. The same study showed that by increasing the minimum wage by only 5.1% to $15.25 an additional 77,800 people would be affected and it would cost the Government $22.82million dollars annually. According to the 2016 Minimum Wage Review, again conducted by MBIE, after the minimum wage was set to $15.25, if they were to increase the minimum wage to $19.25 (still below the recommended living wage of $20.20) approximately 28,000 people would lose their jobs and there would be an increased cost of approximately $543.55million dollars annually.

While we all know that a higher than minimum wage income would go a long way towards raisin economic standards of areas where minimum wage jobs are prevalent, a higher minimum wage could also have adverse effects as well (Laffer, 2016). For employees, minimum wage work translates into income, standard of living, education and taxes which make up our entire economy (Laffer, 2016). For employers, minimum wage creates competitive pressures and productivity, taxes and living standards for investors, suppliers and employers themselves (Laffer, 2016). Minimum wage reduces job growth over several years and for every 10% increase there is a 1-2% reduction in low-skilled employment (Neumark, 2015). However, it’s not just employers and employees
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