Assignment on Business Economic

Added on - 03 Dec 2019

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Business economic
Table of ContentsINTRODUCTION..........................................................................................................................1MAIN BODY...................................................................................................................................11. How change in minimum wages rate affects the employment rate of the country.................12) What will be the macroeconomic effects, of minimum wage changein the economy?.........................................................................................................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONBusiness economics is the field of economics that deals with various factors related to thebusiness environment, management and strategy formation taking into consideration the variouseconomic theories and quantitative methods. The following report depict on how increase inminimum rate of wages affects the unemployment rate of the country. It also interprets howchange in wages will affect the macroeconomics factors of the economy as the whole.MAIN BODY1. How change in minimum wages rate affects the employment rate of the countryAs per the above case, chancellor wants to raise minimum wages rates by£7.20 an hour by theend of the year 2016. Chancellor also said that every year minimum wages rate should beincreased by 6 percent so that by the end of the year 2020 the minimum wages rate could raise to£9.Increase in minimum wages rate will increases the rate of teenage and young peopleunemployment rate and will decrease the job growth rate. Increase in minimum wages rate willaffects the working of the business organization (Carlin and Soskice, 2005). Expansion ofvarious business organizations will be affected. Organization growth rate will decline. Thereason behind this is that if a company needs to pay more wages to its employee and workersthan in that case expenses of the business organization will increases. Increase in revenue willreduce the profitability margin of the company which in turn affects the company growthstrategy. Due to increase in rate of expenses and decrease in profit margin company will stoprecruiting new employee and workers. They will make efforts to simply train the existingemployee in order to utilize the human resources to the full extent. Reduction in recruitment andselection rate will not provide the opportunities to the teenage and young people between the agegroup of 16-25 years of age the chance to explore their talents. They will be left to no jobsbecause companies are not introducing any new jobs or vacancies.Increase in unemployment rate will also affects the overall position of the country. Increase inminimum wages rates will increase the level of standards of the people (Carroll and Shabana,2010). But at the same time it will increase the rate of unemployment and will decrease the jobgrowth rate. Decrease in employment and job growth rate will overall decreases the growth rateof the country.1
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