Economics Case Study KARACHI UNIVER.pptx

ECONOMICS CAASE STUDY

1. The Impact of Minimum Wage on Employment A Case Study on Seattle’s 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