Effects of minimum wage on microeconomics perspective
In every country the government is usually concerned with the wage system to enable the labor sector not to be discriminated in terms of payment .The government usually accomplishes this by imposing a minimum wage where the employee or a firm does not pay less than the amount authorized by the government. Additionally this law is usually enshrined in the fair labor standards act to ensure that employees’ rights are protected. In scenarios where minimum wage is imposed it may have the following effects in a financial system, where financial issues take center stage like in a microeconomics set up.
Effect on employees
Besides minimum wage having a positive influence on employees where by the income of both the skilled and unskilled workers is boosted. Also minimum wage
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Costco retail store in United States has survived in a competition environment, by deploying a number of measures to curb the competition by stores like Wal-mart and Target which Costco has managed to beat in the past years by a considerable margin. One of the measures taken by Costco is that much of the profit earned by this store is on membership fees rather than other stores which are relying mainly on profitable margins. Price competition in any retail store will determine the success of a store .Costco retail store has subsidized prices of its commodities attracting more buyers and market hence many to prefer Costco instead of other retail stores. Additionally Costco having grown in size has a higher purchasing power with the suppliers and has the ability to negotiate for higher and better transaction ordeals. This makes Costco to stronger as opposed to other companies as it enjoy higher economy of scales due to bulk buying and selling of