Effect of Minimum Wage on Employees' Wealth in Retail Companies: Case Study on Tesco

This study investigates the effect of minimum wage on employees' wealth in the context of retail companies, with a focus on Tesco. It examines the significance of minimum wages, potential effects on employees, and recommendations for improving the minimum wage system. The study aims to provide insights into the impact of minimum wage on workers' financial state and living conditions.

Minimum wage

Executive summary
This study is carried out through qualitative data analysis to identify an effect of minimum level
of wage on employees’ wealth in context of retail companies. It is very vital to have right
balance of the wage rate for smooth running of an economy.

Executive summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
Background..................................................................................................................................4
Aim & objectives.........................................................................................................................4
Rationale......................................................................................................................................4
Literature review..............................................................................................................................4
RESEARCH METHODOLOGY....................................................................................................6
DATA ANALYSIS.........................................................................................................................7
FINDINGS.....................................................................................................................................11
Recommendations..........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
APPENDIX....................................................................................................................................14

INTRODUCTION
Title- To identify an effect of minimum level of wage on employees’ wealth in context
of retail companies: Case on Tesco
Background
In the rent years around 3 million people or workers in the Britain are been receiving pay
rise of 4 times higher than the inflation rate from the month of April, after government said that
it will increase an official minimum amount of wage. The present report is based on Tesco,
largest retailer of UK with big superstores and the grocery shops. Furthermore, the report
highlights in depth review of the research problems along with applied methodologies.
Aim & objectives
Aim
To investigate influence of the system of minimum wage on the workers particularly in retail
segment organization: Case study on Tesco
Objectives
 To understand concept of the minimum wage
 To review the significance of minimum wages at the workplace
 To determine potential effect of wage rate system on the working of employees
 To recommend the ways in which the firm can improve its minimum wage system
Rationale
The reason behind this study is to assess effect of the minimum wage on the financial
state and living of workers as this has been seen as critical issue that is been faced by majority of
retail companies in UK.
Literature review
As per Cengiz and et.al. (2019) system of minimum wage referred as the lowest amount
of wage provided to the workers per hour in accordance to mandate by the federal law. It seems
as the legally set price floor which is required to be paid to employees based on the hourly basis

under which the non-exempt workers might not be offered the job. It is recognized as minimum
amount of pay that employer must have to pay to their workers in exchange of the task
performed by then during the specified time frame that could not be decline by the individual
contract and collective agreement.
Lindner and et.al. (2019) reviewed that is very important for an entity to use minimum
wage system as it is seen as the powerful which helps in supporting the work goals and could be
seen as critical element in strengthening of the social protection poverty alleviating impact and
the protection floors. This tool become as relevant as majority of the countries require this
system for boosting domestic growth sources for the purpose of counteracting weakening of the
exports towards crisis hit economy advances. Rising minimum level of wages could help in
rebalancing the growth sources with a limited space. Too lower level reduces relevance of this
system and too high level runs risk of the companies in refusing for complying with the
minimum legislation of wage. Well design of the system could help in supporting goal for
improved income in informal economy & reducing the wage inequality. Growing interest in role
of the minimum wages for promoting the social justice through improving lives of lower paid
employees and in rebalancing the national economies reflects its importance. It is found as
critical to set minimum wages at adequate level, in such way which balances requirement of
workers & their respective families in association with the economic factors for the purpose of
avoiding employment and macro-economic benefits.
In accordance to Bullinger (2017), reviewing impact of minimum wages is seen as main
component of evidence basis system. Findings from the rigorous effect analysis study found their
way back for the government & social partners with informing the subsequent rounds of the
changes and adjustment to system. In case when economy of the country become as unstable.
Sometimes firms avoid for hiring new workers as of minimum wage. The supervisor would
instead pay existing employees for the purpose of working more number of hours than taking on
cost of hiring the minimum wage of employee. This could make difficult for the minimum wage
rate employees in finding the job in poor economy. Unskilled workers without the minimum
amount of wage found as difficult to run its family. Thus, it provides a chance in survival of
family even in case if a parent does not possess the marketable skills. At times when government
increases the minimal rate of wage, it might impact all the workers in the firm who are working

at above minimum wages as they would feel de-moralized as the workers would be earning
higher wages.
RESEARCH METHODOLOGY
Research methods
It is a prominent measure which is useful in systematically evaluating the key fundamental
results which are useful in obtaining results. It is further distinguished into quantitative and
qualitative research methods. Qualitative methods is significant in attaining in- depth set of
results (Basias and Pollalis, 2018). The researcher of the study has opt for qualitative research
methods to investigate influence of the system of minimum wage on the workers particularly in
retail segment organization.
Research philosophy
It is associated with the nature and development of the knowledge to gather, analyze and
use data. It is further distinguished into positivism philosophy and interpretivism philosophy.
Interpretivism is reluctantly base upon the principle that integration of the social work world and
human interest into study helps in attaining aims of study. The researcher has opt for
interpretivism philosophy to understand concept of the minimum wage.
Research design
It is an overall strategy which helps in ensuring to attain the key research objectives. It is
further distinguished into exploratory design and descriptive research design. However,
descriptive method helps in investigating one or two variables which is significant in evaluating
the patterns related with study. The researcher of the study has opt for descriptive research
design to review the significance of minimum wages at the workplace.
Data collection
It is useful in measuring key information which helps the researcher to find relevant
answers to research questions. It is further distinguished into primary and secondary source of
data collection (Almalki, 2016). Primary data through questionnaire and secondary data through

journal articles, books, manuals, etc. The researcher has opt for primary and secondary source of
data collection to determine potential effect of wage rate system on the working of employees.
Sampling
The researcher of the study has selected random sampling method where all the people
from the population have got equal set of opportunity to get selected within the sample size. The
researcher has selected 10 employees of the Tesco company.
Data analysis
It is useful to clean, model and transform data to make informed decision. It is further
distinguished into SPSS and thematic analysis. Thematic analysis identifies all the variables and
patterns related with each theme (Creswell and Creswell, 2017). The researcher has opt for
thematic analysis to recommend the ways in which the firm can improve its minimum wage
system.
DATA ANALYSIS
Theme 1: Yes, most participants understand the concept of the minimum wage.
PARTICULARS NUMBER OF
RESPONDENTS
% OF RESPONDENTS
Yes 7 70%
No 2 20%
Maybe 1 10%
TOTAL 10 100%

1 2 3
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.7
0.2
0.1
PARTICULARS
Series2
% OF RESPONDENTS
Interpretation: The analysis of the data from 10 employees of Tesco Company. Among
which 70% established that, a minimum wage is referred to as the low degree of wage which
is to be paid to the employees per hour in exchange of the task performed by then during the
specified time frame.
Theme 2: Highly agreed, minimum level of wages helps in rebalancing the growth sources.
PARTICULARS NUMBER OF
RESPONDENTS
% OF RESPONDENTS
Agreed 3 30%
Highly agreed 5 50%
Disagreed 1 10%
Highly disagreed 1 10%
Neutral 0 0%
TOTAL 10 100%

Agreed Highly
agreed Disagreed Highly
disagreed Neutral
0
0.1
0.2
0.3
0.4
0.5
0.6
30%
50%
10% 10%
0%
Series1
% OF RESPONDENTS
Interpretation: The analysis of the data from 10 employees of Tesco Company. Among
which 50% tends to state that, minimum wage is significant for boosting domestic growth
sources for the purpose of counteracting weakening of the exports towards crisis hit economy
advances. It also leads to better standard of living.
Theme 3: Preventing exploitation of employees is the potential effect of wage rate system on
the working of employees.
PARTICULARS NUMBER OF
RESPONDENTS
% OF RESPONDENTS
Helps in combating
poverty
3 30%
Significant in
ensuring vibrancy
1 10%
Preventing
exploitation of
employees
4 40%
All of the above 2 20%
TOTAL 10 100%

Helps in combating poverty
Significant in ensuring vibrancy
Preventing exploitation of employees
All of the above
0
0.1
0.2
0.3
0.4
0.3
0.1
0.4
0.2
Series1
% OF RESPONDENTS
Interpretation: The analysis of the data from 10 employees of Tesco Company. Among
which 40% tends to state that, wage rate system is useful in preventing the exploitation among the
employees by paying equal wage scale according to the skills and the number of hours worked.
Theme 4: Rise in the labor cost is the key challenges related with the minimum wage.
PARTICULARS NUMBER OF
RESPONDENTS
% OF RESPONDENTS
Rise in the labor cost 6 60%
Unorganized sectors 2 20%
Both 2 20%
TOTAL 10 100%

Rise in the labor
cost Unorganized
sectors Both
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
60%
20% 20%
Series1
% OF RESPONDENTS
Interpretation: The analysis of the data from 10 employees of Tesco Company. Among
which 60% tends to state that, complying with the minimum wage leads to rise in the labor
cost which leads to low degree of profitability for the company.
Theme 5: Examining key recommendation would you give to improve its minimum wage system.
Interpretation: The analysis of the data from 10 employees of Tesco Company tends to state
that it is important to reduced level of employment and hurting exports. Right balance of the
wage rate for smooth running of an economy is also effective recommendation to improve its
minimum wage system.
FINDINGS
This study evaluates that, minimum wage referred as the lowest amount of wage provided to the
workers per hour in accordance to mandate by the federal law. As per the discussion, wage rate
system is useful in preventing the exploitation among the employees by paying equal wage scale
according to the skills and the number of hours worked. Minimum wages is useful in promoting the
social justice through improving lives of lower paid employees and in rebalancing the national
economies

Recommendations
 When setting up the minimum wage level, makers of policy must takes into consideration
the economic factors. In case minimum amount of the wage is set very high, this might
have large effect on labor costs that an employers need to pay. This leads to trigger in
price inflation, reduced level of employment and hurting exports. The amount of wages
that are very low would constrain in the national household consumption.
 In adjusting the minimum rate of wage, managers should frequently refer to the
productivity of labor. It facilitates the contextual information with regard to the market
value of the goods being produced by average number of the workers within the
premises, giving an existing level of the technology and capital (Totty, 2017). In addition
to this, labor productivity must also be taken into account for regular or routine
adjustments which ensures that the workers receives share of progress or profit.
 While setting minimum wages, Managers should also consider proportion of an employee
who would be impacted by introducing minimum wage or up-rating of existing minimum
value of wage. This type of indicator captures an effect that minimum wage would likely
have on entire wage structure and total bill of wage.
 For managing overall market demand and finding right balance, government should have
strong social and economic reasons for increasing wages in line with that of average level
of productivity growth. This is because paying high to low workers seems to increase
their respective consumption levels and in some conditions results to high aggregate
demand. Thus, it is very vital to have right balance of the wage rate for smooth running
of an economy as a whole because when the wage rate pushed very high, investment &
export might decline & the aggregate demand might be falling with a greater value.
CONCLUSION
It has been summarized that, use minimum wage system is useful in strengthening of the
social protection poverty alleviating. Well design of the system could help in supporting goal for
improved income in informal economy & reducing the wage inequality. reduced level of
employment and hurting exports is effective recommendation to improve minimum wage
system.

REFERENCES
Books and journal
Almalki, S., 2016. Integrating Quantitative and Qualitative Data in Mixed Methods Research--
Challenges and Benefits. Journal of Education and Learning.5(3). pp.288-296.
Basias, N. and Pollalis, Y., 2018. Quantitative and qualitative research in business & technology:
Justifying a suitable research methodology. Review of Integrative Business and Economics
Research. 7. pp.91-105.
Bullinger, L. R., 2017. The effect of minimum wages on adolescent fertility: a nationwide
analysis. American journal of public health. 107(3). pp.447-452.
Cengiz, D. and et.al., 2019. The effect of minimum wages on low-wage jobs. The Quarterly
Journal of Economics. 134(3). pp.1405-1454.
Creswell, J.W. and Creswell, J.D., 2017. Research design: Qualitative, quantitative, and mixed
methods approaches. Sage publications.
Lindner, A. and et.al., 2019. The Effect of Minimum Wages on Low Wage Jobs. The Quarterly
Journal of Economics. 134(3). pp.1405-1454.
Totty, E., 2017. The effect of minimum wages on employment: A factor model
approach. Economic Inquiry. 55(4). pp.1712-1737.

APPENDIX
Name:
Age:
Gender:
Date:
QUESTIONNAIRE
1. Do you understand the concept of the minimum wage?
 Yes
 No
 Maybe
2. Do you agree rising minimum level of wages helps in rebalancing the growth sources?
 Agreed
 Highly agreed
 Disagreed
 Highly disagreed
 Neutral
3. According to you what is the potential effect of wage rate system on the working of
employees?
 Helps in combating poverty
 Significant in ensuring vibrancy
 Preventing exploitation of employees
 All of the above
4. According to you what are the key challenges related with the minimum wage?
 Rise in the labor cost
 Unorganized sectors
 Both
5. What recommendation would you give to improve its minimum wage system?