SLIDE 6 Essays - Economy, Income Distribution, Labour Law

SLIDE 6 Should we keep the minimum wage law? Some argue that we should abolish it and let the free market decide what to pay their employees. Already we see Small business and corporate franchises paying well over t he minimum wage and that is an example of the free market. The purpose of theminimum wagewas to stabilize the post-depression economy andprotecttheworkersin the labor force. Theminimum wagewas designed to create aminimumstandard of living toprotectthe health and well-being of employees. raising the minimum wage to an excessively high rate would exert inflationary pressure on the economy, but increasing it to keep pace with inflation would only have a minimal effect. By setting a government-specified floor for workers' wages, minimum wage laws tend to disrupt labor supply and demand. SLIDE 5 When government increases minimum wage is causes a shift in demand causing it to decrease. This shift happens simply because businesses cannot pay all the unskilled workers higher wages and stay profitable. When this happens, it interrupts the equilibrium and causes unemployment.