Answer to Question #251249 in Economics for saleemaslam

Question

The British Columbia government recently increased the minimum wage from $14.60 per hour to $15.20 per hour. The new minimum wage was implemented as of June 1, 2021. Drawing from what you have learnt on the topic “labour demand” and from related literature, what do you think might be the implications on employment and wages in the Province?

Answer 1

With an increase in the minimum wage, the amount of supply in the labor market will increase, that is, more people will agree to work for a new wage. And the supply will shrink as fewer firms are willing to pay wages of this size.