Other Factors Taken into

Consideration
1 Wage differentials. Will an increase in the minimum wage
affect over pay scales, e.g. if the lowest get paid more, will
middle ranking workers demand higher wages to
maintain a wage differential.
2 Elasticity of demand. If demand for labour is highly
inelastic, then higher wages may not cause
unemployment.
3 Impact on incentives to get a job. Higher minimum wage
may increase incentive for unemployment to take a job or
increase incentive to increase labour market participation
rates.
4 Impact on wage equality. One aim of minimum wage is to
reduce wage inequality.