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.
IZA Discussion Paper No. 1072 March 2004 ABSTRACT The Effect of the Minimum Wage on Prices It is well established in the international literature that minimum wage increases compress the wages distribution. Firms respond to these higher labour costs by reducing employment, reducing profits, or raising prices.While there are hundreds of studies on the employment effect of the minimum wage, there is less than a handful studies on its profit effects, and only a couple of dozen studies on its price effects.he Department of Labor studies published several studies on the effects of the 1961 and 1967 US minimum wage increases (FLSA, 1965 and 1969) using difference-in-difference estimators to compare US Southern and non-Southern industry prices, assuming a larger minimum wage effect in the first.