Benefits And Disadvantages Of Minimum Wage - 1957 Words

1. Introduction In the past decades a lot of countries have forced companies to pay wages inferior to a certain threshold. This activity has important effects on the labor market and even on the global economy. The average wage levels influence not only the rates of employment, and the living conditions of part of the payroll, also a country’s level of education, how much outsourcing is done to countries where (minimum) wages are lower, and even market prices and therefore rates of inflation. Around the world, and for more than a century now, â€Å"since the first minimum wage law was passed in New Zealand in 1894† [1], economists, policymakers, business owners, and many others, have never ceased debating over the varying advantages and disadvantages of minimum wage laws, and like often in economics, there is no consensus among economists. â€Å"There is a long-standing tension in economics between belief in the advantages of the market mechanism and awareness of its imperfections.†[2]. Supporters of the minimum wage say it increases the standard of living of workers, reduces poverty, reduces inequality, boosts morale and forces businesses to be more efficient.[3] In contrast, opponents of the minimum wage say it increases poverty, increases unemployment (particularly among unskilled or inexperienced workers) and is damaging to businesses.[4][5][6]. The purpose of this paper is to discuss the Pros and Cons of minimum wage policy perspective of Firms, Consumers, Labor force, and theShow MoreRelatedEffects of Increasing Minimum Wage Essay988 Words   |  4 PagesThe idea of having a federal minimum wage is a good one. The idea is to protect low and unskilled workers from discrimination and allow all workers to earn a living wage. The recent debate on the floor, though, is whether or not to raise the minimum wage from the current $7.25 per hour up to $10.10 per hour. 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