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Economy is a living organism and system of communicating vessels. You can see different effects of this operation, some of them I presented below. If we raise the minimum wage:
a) labor cost will increase (labor cost must be compensated by the company or transfered further to the customers)
b) higher minimal wage means more money for the employees (higher money for employees means more money to spend and more money on the market. If we increase money on the market the inflation could raise)
c) labor market condition (higher minimal wage means higher cost, companies will think about cost reductions , specially about cutting unproductive positions. Wage increase should be correlated with efficiency increase, otherwise we could spoil labor market)
With higher average wages across markets,helps in the driving economic growth,not only in one country but in the expat's home country.
Yes it will cause inflation too,but in a longer run can enhance the Quality of life and drives growth already a proven factor with Keynes theory.
........inflation economy........
The minimum wage has gained momentum among policymakers as a way to alleviate rising wage and income inequality. Much of the debate over this policy centers on whether raising the minimum wage causes job loss, as well as the potential magnitude of those losses. Recent research shows conflicting evidence on both sides of the issue. In general, the evidence suggests that it is appropriate to weigh the cost of potential job losses from a higher minimum wage against the benefits of wage increases for other workers.
It is easy to be confused about what effects minimum wages have on jobs for low-skilled workers. Researchers offer conflicting evidence on whether or not raising the minimum wage means fewer jobs for these workers. Some recent studies even suggest overall employment could be harmed. This Letter sheds light on the range of estimates and the different approaches in the research that might explain some of the conflicting results. It also presents some midrange estimates of the aggregate employment effects from recent minimum wage increases based on the research literature.
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Contrary to popular belief, raising the minimum wage won’t make everyone richer, but it will make a great deal of poor people poorer—or more accurately, out of work.
When you raise the minimum wage, your employees would be more motivated to work and boost the company's income.
no definite answer, many other factors has effects, raising the minimum wages could be a Borden on the businesses , it depends on other factors, inflation, exchange rates, purchasing power ,the balance of trade, the GDP, governmental projects...and so on...raise wages is not the end, other factors and backfire will a raise and surface.,
Cost Push inflation, unemployement and output below to full employment level and all impacts of inflations
When we raise the minimum wage the capacity to expenditure araise. the effect depend on ecomomy country position.
if the economy at inflation the price will araise.
if the economy at deflatio the demand will araise.
if the economy at good position the welfare happen.
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May increase a small stimulative effect on the economy.
It will increase, by changing the work period making soft adjustment with the workers listening to their requirements,taking their needs into account, by pleasing the work force, the work progress the production increase so the economic ratio increases .
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