There are a lot of pros and cons to minimum wage. A fixed minimum wage benefits employers, because they can hire low-cost employees, which keeps their production costs low and maximizes profits. It also benefits inexperienced employees who have little to no education, because they know when they enter the workforce that minimum wage is the absolute lowest amount they can expect to earn per hour. Issues with minimum wage arise when it increases, whether through federal and state government mandate or employee demand to earn higher than minimum wages, cutting into company profits. The cost of this established wage affects the cost of production.