... supply of labour is equal to the demand from the market. The competitive firms want a low price of labour compared to the cost of production but the minimum wage policy increases their price of labour which means that they are less willing to employ individuals, and their demand decreases. However, the supply of labour increases because more individuals are willing to work for a higher wage. This graph shows that the section of the supply curve below the minimum wage is rendered useless by minimum wage legislation. The Labour party's policy does not affect the high decile earners of society but disadvantages the lowest paid workers because it takes away employment opportunities. When the UK's economy is in a downturn, individuals may be willing to accept low-income jobs because it is better than being unemployed. Companies would not be able to produce at their most efficient rate because they would not ...

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