A minimum wage results in unemployment and higher costs to consumers for goods.
Some of the drawbacks to establishing a minimum wage rate are it can lead to unemployment, will increase the black market, and sometimes also shows that firm is uncompetitive.
After performing any task, when a person receives a certain amount of remuneration or incentives, those earnings are known as wages. This wage-paying system is coming from an ancient period of time. Whether it was the time period when the barter system was in trend or after the introduction of the currency.
Basically, wages are paid to any person on the basis of their skills, outputs, efforts, and many other things that makes an individual different from others. On the basis of the skills and knowledge, one can demand higher wages also. When the person receives minimum wages, sometimes it can result in cons while sometime it may be in pros.
Therefore, when the wages are minimum, it will result in drawbacks.
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