Comment on the below response:

The market impacts of increasing the federal minimum wage to $15 per hour can be complex and vary depending on various factors, including the current economic conditions and geography. The market will experience a labor surplus if the minimum wage is raised because of the rise in labor supply and decrease in labor demand. Because they will be paid a salary higher than the equilibrium wage, the proposal will benefit the few workers who will continue to be employed or find jobs because of an enormous surplus. While a proposed increase in the minimum wage can have various impacts on the labor market (Boyle, 2024), for instance, the low-skilled workers who currently earn the minimum wage or just above it may face potential challenges. There is also a risk of reduced job opportunities or hours due to increased labor costs for employers. However, it will result in more unemployment since businesses will find it expensive to pay employees at the new minimum wage, compelling them to fire or hire at a level below equilibrium. An increase can influence the prices of goods and services produced with minimum wage labor in the minimum wage. "It is well established in the international literature that minimum wage increases compress the wage distribution. Firms respond to these higher labor costs by reducing employment, reducing profits, or raising prices." (Lemons, 2004). Not all businesses may raise prices in response to higher labor costs; some may explore alternative strategies to manage the increase.

Since it costs more to acquire a new employee, the idea will affect businesses because it will result in a higher marginal cost of production. The proposal is a good idea because the advantages include potential demand stimulation and higher wages for low-wage workers. Potential job losses, shortened hours, increased automation, and inflation are some drawbacks. The overall effect would rely on variables like how businesses and consumers responded to the wage hike, the status of the economy at the time, and how low-paid workers were distributed among industries and regions.