National Minimum Wage Essay

Words: 1096
Pages: 5
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Emeline de Narp
Due 09/10/15

Business Economics Coursework

a). “The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law.” (UK government, 2015), which “is enforced by the HM Revenue and Customs” (politics, 2015). The National Minimum Wage owes its creation to a chain of events that took place starting in the 1990s, after “most of the last wages councils were abolished, [and] pay for many workers in a number of sectors was well below what was considered to be a living wage” (politics, 2015). Poverty rose and measures had to be taken. Labour fought continuously for the establishment of a minimum wage to prevent underpayment and abuse of the employees. After the “Labour’s 1997 election manifesto, […] …show more content…
In a perfectly competitive labour market, the equilibrium wage is the wage at which there is a profit maximisation and at which number of jobs demanded equals the number of jobs supplied in any situation. In fact, no matter how much demand or supply of labour vary, the wage increases of decreases so as to reach a situation of perfect balance. For instance, when the demand of labour decreases, the wage, as well as the supply of labour, increase. In the contrary, when the demand increases, the wage and the supply decrease. The same way, supply of labour is a determinant of the equilibrium wage, which signifies that if the supply, or the numbers of workers available, increases, the wage falls but the demand rises as well. On the other hand, if supply decreases, wages rise and demand …show more content…
In fact, a new National Living Wage will be introduced soon under the form of an increase of the National Minimum Wage for those aged 25 and over. George Osborne, Chancellor and First Secretary of State, has announced that “A new compulsory National Living Wage of £9 an hour will be introduced by 2020 [starting with a] first increase … introduced in April 2016 … when workers will receive £7.20 an hour” (Wilkinson, 2015). Several negative and positive impacts on the British employment could take place after this mandatory living
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