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The Impact of Minimum Wage on
Employment
 A Case Study on Seattles Minimum Wage
Increase
Introduction
 Minimum wage policies are widely debated in
economics.
 Some believe higher wages improve worker
income.
 Others argue it leads to unemployment and
business struggles.
Case Study Background
 In 2014, Seattle introduced a law to raise the
minimum wage to $15 per hour.
 The change was phased in over several years.
 Economists studied its effects on employment
and wages.
Positive Effects
 Higher earnings for low-wage workers.
 Reduced reliance on government aid
programs.
 Improved living standards for some
employees.
Negative Effects
 Some businesses reduced employee work
hours.
 Job losses in certain low-wage industries.
 Increased costs led to higher prices in some
sectors.
Economic Concepts Involved
 Supply and Demand: Higher wages may
reduce demand for labor.
 Elasticity of Labor Demand: Businesses adjust
hiring based on wage levels.
 Cost-Push Inflation: Higher wages may lead to
increased prices.
Key Findings from Research
 Some workers benefited from higher wages.
 Certain businesses struggled to afford labor
costs.
 Overall employment impact was mixed.
Lessons for Policymakers
 Minimum wage increases should be gradual.
 Consider industry-specific impacts.
 Monitor employment and price changes over
time.
Conclusion
 The case study highlights both pros and cons
of wage increases.
 A balanced approach is needed in economic
policymaking.
Reference
 Jardim, E., Long, M. C., Plotnick, R., et al.
(2017). "Minimum Wage Increases, Wages,
and Low-Wage Employment: Evidence from
Seattle."
 National Bureau of Economic Research (NBER)
Working Paper No. 23532.
 https://www.nber.org/papers/w23532
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Economics Case Study KARACHI UNIVER.pptx

  • 1. The Impact of Minimum Wage on Employment A Case Study on Seattles Minimum Wage Increase
  • 2. Introduction Minimum wage policies are widely debated in economics. Some believe higher wages improve worker income. Others argue it leads to unemployment and business struggles.
  • 3. Case Study Background In 2014, Seattle introduced a law to raise the minimum wage to $15 per hour. The change was phased in over several years. Economists studied its effects on employment and wages.
  • 4. Positive Effects Higher earnings for low-wage workers. Reduced reliance on government aid programs. Improved living standards for some employees.
  • 5. Negative Effects Some businesses reduced employee work hours. Job losses in certain low-wage industries. Increased costs led to higher prices in some sectors.
  • 6. Economic Concepts Involved Supply and Demand: Higher wages may reduce demand for labor. Elasticity of Labor Demand: Businesses adjust hiring based on wage levels. Cost-Push Inflation: Higher wages may lead to increased prices.
  • 7. Key Findings from Research Some workers benefited from higher wages. Certain businesses struggled to afford labor costs. Overall employment impact was mixed.
  • 8. Lessons for Policymakers Minimum wage increases should be gradual. Consider industry-specific impacts. Monitor employment and price changes over time.
  • 9. Conclusion The case study highlights both pros and cons of wage increases. A balanced approach is needed in economic policymaking.
  • 10. Reference Jardim, E., Long, M. C., Plotnick, R., et al. (2017). "Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle." National Bureau of Economic Research (NBER) Working Paper No. 23532. https://www.nber.org/papers/w23532