Question

Most government policy decisions have winners and losers. What are the effects of raising the minimum wage? It is more complex than simply producers lose and workers gain. Who are the winners and who are the losers, and what exactly do they win and lose? To what extent does the policy change achieve its goals?

Short answer

The employees may get motivated, and hence the organization may achieve its goals.

Contrary to this, employees may not work as per expectations and the employer will face the negative side.

Step-by-step solution

Step1. Introduction

Minimum wage is a floor limit imposed on the wages paid to the workers. An employers cannot pay a wage below this limit.

Step2. Explanation

Increasing the minimum wage rate can be beneficial for workers and can be harmful for employers to some extent. As the living standards and working conditions would improve for the employees and o the other hand it would make employers lose because now, they would pay them a certain amount of wage as a minimum wage if they don’t work on minimum standards as well.

But there is no fixed rule that an employer will lose for sure and an employee will win because these are market forces that tend to change every second. Like if the employees get motivated by wage revision or increased wages, they will put more effort to achieve the organizational goals.