In an involuntary termination, an employer fires the employee or removes the employee from his or her job. An involuntary termination is usually the result of an employer's dissatisfaction with an employee or an economic downturn.
While a higher minimum wage induces some automation, as well as increased worker productivity and higher prices, it simultaneously increases worker purchasing power. In the end, the costs of the minimum wage will be borne by turnover reductions, productivity increases and modest price increases.
1 In a competitive labor market, an increase in the minimum wage reduces employment and increases unemployment. 2  A minimum wage could increase employment in a monopsony labor market at the same time it increases wages. Compare the impact of a minimum wage on employment in the case where the labor market is perfectly competitive to the case of a monopsony labor market. 2  Discuss the debate among economists concerning the impact of raising the minimum wage.