Essay On Unemployment And Unemployment

Effects of Wage Rise on Unemployment and Poverty
There has been serious debate on the effect of raising the minimum wage on unemployment. A review of literature highlights on two opposing arguments on this phenomenon, where raising the minimum wage level is accounted to increase unemployment. Supporters of raising the minimum wage assume that it would raise the income of the working poor, and can possibly decrease destitution levels. It is likely that a minimum rise would the modest effect on unemployment resulting to a slight increase, decrease in unemployment or no change at all. This is a literature review discussion highlighting on the three possible situations.
Wage Rise and Higher Unemployment Argument
Despite the fact that, conventional

These individuals with low aptitudes are deserted, as there is more focus on highly skilled laborers. In the study the authors conceptualize a model that focuses on workers ' efficiency, depending on skills and human capital connected with job training, and this lays ground to further understand how minimum wage influences job training. Organizations seek to leverage the increase in wages by focusing on training incentives for those who bring better 'return '. Low wage workers may tend to transition over occupations more frequently than other laborers and this results to wage growth for those earning minimum wage.
Conclusion
Contingent upon the labor market conditions, a rise in minimum wage can raise or lower the unemployment rate. Policymakers should consider the likely response of workers and employers. Employers are hesitant to recruit more employees when there is a rise in wage levels, and a few workers may look for a higher paying occupation in the same industry or another. Regardless, it is noteworthy that the wage level should not be punitive to employers or make employees live undignified when they cannot cater for their fundamental