National minimum wage

A national minimum wage is a wage that almost all workers are paid.

Positives

• Living standards improve
• More equal distribution of income
• Increase in labour supply
• Reduced discrimination
• Increased worker productivity (more motivated by higher pay)
• The government has to pay less in benefits

Negatives

• May increase unemployment
• UK firms become less competitive (higher costs)
• Smaller businesses are impacted more
• Increased inflation

Evaluation

There is evidence that NMW does not cause unemployment, especially if you increase productivity.

Regional National Minimum Wage

London / SE could have a higher minimum wage due to higher living costs

However:

• People could emmigrate to higher paid areas
• Unfair to be paid differently for the same job
• Increases income equality / legislates divide
• Hard to administrate