Trade unions favour an increase in the national minimum wage rate - Leaving Cert Economics - Question c - 2018

However, a potential negative economic effect is the possibility of job losses. Businesses may face higher wage costs, leading to cutbacks on hiring or even layoffs, especially in small enterprises that may struggle to afford the increased wage rates.

For businesses, an increase in the national minimum wage can enhance productivity. Employees, feeling valued with higher wages, may be more motivated and committed to their work, potentially improving overall efficiency and output.

Conversely, businesses may experience a loss of competitiveness. Higher wage costs can lead to an increase in prices for goods and services, making them less competitive compared to firms that do not have to comply with the same wage structures.

On the consumer side, a positive economic effect could be better quality service and goods. With employees earning more, they may be more inclined to provide better service due to increased job satisfaction and reduced turnover.

However, consumers may also encounter higher prices. As businesses adjust to the increased cost of labor, they may pass these costs onto consumers, leading to higher prices for products and services.