Recently, minimum wage has increased from $10.25 to $10.45 in Manitoba. As Manitoba has a large population of minimum wage earners, the increasing minimum wage implies numerous effects on different stakeholders in the business.

Firstly, the workers who significantly rely on minimum wage gain benefits from the rising minimum wage as now they earn higher income. However, on the other hand, it is potentially harmful to the firms and the consumers. For firms, especially the restaurant industry as it has the most minimum wage earners, the costs of supplies increase because now they have to pay higher wages to the employees. Hence the firms lose their profits. In order for firms to retain their profits, they have to raise the overall price level. Thus, consumers will encounter higher prices of the goods and services.

Minimum wage should be kept in a level where it is not too high because otherwise eventually the social costs will increase. It may not even benefit the minimum wage workers after all because the increasing general price level applies to them as well. In addition, firms that face higher costs might take various actions to cut down the costs such as the redundancy of employees. Overall, with such a high minimum wage, it is relatively disadvantageous for the stakeholders.

Works Cited:

Batchelor, Megan. “Minimum Wage Increases in Manitoba Tuesday.” Global News. Global News, 1 Oct. 2013. Web. 03 Oct. 2013. <http://globalnews.ca/news/874065/minimum-wage-increases-in-manitoba/>