Question

Why does a.minimum wage exist?

Answer 1

Arguments in favour of a minimum wage mostly hang on the idea that firms have a responsibility to ensure that their workers earn enough to live on. If a firm can’t pay its workers enough to live on, then it isn’t a viable business, because it is dependent on wage subsidies. Of course “enough to live on” depends where you live: the cost of living in London is considerably higher than it is in, say, Newcastle, so a minimum wage that would give a reasonable standard of living in Newcastle is starvation level in London. The campaign for a voluntary Living Wage tries to persuade firms to pay above the current UK minimum wage, which is perceived as being below the real cost of living.

Answer 2

Step-by-step explanation:

If it did not, child labor, for example could be paid just enough to provide food but no shelter or shelter but no food. The poverty line would know no bottom.