Another negative effect that would come about because of an increase in the minimum wage is that the unemployment rate will also rise with it. If businesses have to pay more for employees they will have to cut down on the number of employees they have so that they can continue to make a profit. Therefore, because businesses have to fire people in order to make a profit, the unemployment rate will go up.There has been many been many cases that have shown that every minimum wage increases has caused the unemployment rate to go up.Researchers did a study in 2013 and found that a $1 increase in the minimum wage was associated with a 1.48% increase in the unemployment rate, a 0.18% point decrease in the net job growth rate, 4.67 % increase in the teenage unemployment rate, and a 4.01% decrease in the teenage net job growth rate. The increase in unemployment rate could therefore push more people into poverty.
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