How does a higher minimum wage affect the supply of labor?

A higher minimum wage increases the hourly pay that workers receive for their labor, which can make jobs more attractive to a broader range of individuals. As wages rise, the opportunity cost of not working also increases, prompting more people to seek employment. This higher financial incentive can encourage those who were previously outside the labor market, such as students, caregivers, or retirees, to enter and participate.

Additionally, with more attractive wages, existing workers may also desire to work additional hours or take on more jobs. This overall increase in the supply of labor reflects the responsive behavior of individuals to higher compensation for their work, resulting in a larger pool of workers available for employment.