Impact Of Minimum Wage On Unemployment - 1305 Words

Impact of minimum wage on unemployment The supply and demand factors show significance towards growth of unemployment. It has been observed that the price floor above equilibrium wage should cause unemployment. There are many people who have provided their arguments against the fact. However, it has been observed that whenever there has been a rise in the minimum wage of workers, unemployment rate goes very high. For example, an organization has to maintain its expenses as well as its incomes. Due to rise of wage, Companies can become more selective. This situation is not appropriate because it excludes the low skilled employees from employment opportunities. Since full-time workers could get affected due to the minimum wage laws, it has been deemed necessary that the increase of minimum wage is not done. Furthermore, with the rise of minimum wage, greater number of people would show their desire to obtain jobs towards the minimum wage however there would be lower number of opportuni ties to get employment. This factor would result in maximum number of unemployment cases. Due to the rise of minimum wage the quantity of the number of low skilled workers would fall and finally it would affect the economic growth and stability of a nation. The graph represented below shows the relationship between minimum wage and unemployment. The graph explains that the relationship between unemployment and minimum wage based on statistical representation. It is therefore clear that withShow MoreRelatedThe Minimum Wage Should Be Legal905 Words   |  4 PagesRise in minimum wage has several impacts apart from unemployment. The minimum-wage workers would have to pay more taxes and receive fewer benefits if they are subjected to rise of minimum wage. The federal marginal rate for tax is 32 percent on an average for low earning members. This would amount to almost one third of the income of a worker. The tax rate is quite high for low paid workers. The rise of minimum wage would also reduce some of the advantages and leverages that the low-wage workersRead MoreImpacts Of A Minimum Wage Hike900 Words   |  4 PagesImpacts to a Minimum Wage Hike in America There has been much controversy over the years on the impacts resulting from an imposed minimum wage and how it relates to the economy. It wasn’t until President Franklin D. Roosevelt signed a Bill enacting the Fair Labor Standards Act of 1938 that American’s gained the right to a minimum threshold by which their labor could be sold. Against much opposition President Roosevelt was for a law that banned oppressive child labor and set the minimum hourly wageRead MoreThe Effects Of Minimum Wage From A Microeconomic Perspective1640 Words   |  7 Pages The Effects of Minimum Wage from a Microeconomic Perspective Nathaniel Fishburne Embry-Riddle Aeronautical University Introduction The first minimum wage law was implemented in New Zealand and Australia in the late 1900s. In 1940s, George J. Stigler founded the first standard model of minimum wage. The model predicts that the if â€Å"minimum wage system is set above equilibrium wage level, it would create unemployment because some previously employed workers will lose their jobs whileRead MoreLink between Higher Minimum Wage and Higher Unemployment1179 Words   |  5 PagesIn theory when an increase in minimum wage increases the cost of low-wage workers firms should want to hire less workers, however in reality this basic theory might be wrong according to Plumer B. (2013) While some studies found a link between higher minimum wage and higher unemployment level many others such as a recent paper from U.C. Berkeley that exploited differences across state borders did not find a link between higher minimum wage and higher unemployment. A study by John Schmitt of theRead MoreThe Effects Of Minimum Wage From A Microeconomic Perspective1670 Words   |  7 Pages The Effects Of Minimum Wage From A Microeconomic Perspective Nathaniel Fishburne Embry-Riddle Aeronautical University Introduction The first minimum wage law was implemented in New Zealand and Australia in the late 1900s. In 1940s, George J. Stigler founded the first standard model of minimum wage. The model predicts that the minimum wage system. It set above equilibrium wage level, would create unemployment because some previously employed labors lose their jobs while some find itRead MoreThe Impact Of National Minimum Wage On South Africa s Income Inequality Essay1525 Words   |  7 PagesThe impact national minimum wage would have on South Africa’s income inequality should it be implemented. South Africa is still considered one of the countries which still consist of high income inequality. Economists argue that inequality is the most unavoidable part of the economic development and that it continues to increase in developing countries due to economic growth (Keeton, 2014). Inequality is a problem in countries such as South Africa, because it shifts the attention from bigger andRead MoreMinimum Wage Of The United States Of America And Australia1031 Words   |  5 Pagesdifferences in the wages set to employees in different countries. The lowest wages set by the law that are fixed to a particular amount which is also defined to be the price floor below which workers shall not sell their labor, has its own effects. The minimum wage law came into force as a matter of social justice amongst the low-wage workers, also to reduce exploitation and see that workers can afford the standard basic living expenses and necessities, not to increase the unemployment rate, indeed toRead MoreMinimum Wage And Its Effect On The Economy1015 Words   |  5 Pagesthe unemployment rate. The increasing of unemployment rate is caused by some reasons, and one of the problem that causes the high unemployment rate is the issue of minimum wage. Depending on the states in U.S., the price of minimum wage is different, but the low minimum wage may cause the economic condition worse. Minimum wage is the lowest wage that an employer is allowed to pay. This wage is regulated by the law, so all workers must follow this rule. According to the book, â€Å"Minimum Wages†, theRead MoreShould Minimum Wage Be Increase?996 Words   |  4 PagesIntroduction Should minimum wage be increase to $15 an hour? That seems to be the million dollar question. Minimum wage is the lowest wage an employee can receive for working. Minimum wage is a contract or legislation by the government or legal authority. How would the increase in minimum wage impact the economy? Summary According to, a news article in the Star Phoenix called â€Å"Pros and cons of a minimum wage increase hourly† (Tyndall, 2015). Tyndall states that, minimum wage is basically the lowestRead MoreThe Issue Of The Minimum Wage1514 Words   |  7 Pages6-8 pages The issue of the minimum wage has recently come to the forefront of the debate on social policy. There is much disagreement over the wisdom of an increase in the minimum wage in the current fragile economic recovery. Some argue that a dramatic increase is what is needed in order to lift the standard of living for those in the bottom of the economic pyramid. Economists reason that the basic principle of supply and demand mandates than an increase in the wage would result in the loss of