Question

Is Minimum Wage a good or a bad idea?

What is Labor Monopsony? Does Minimum Wage help in solving the problem of Monopsony?

Which characteristics will you focus on: lower participation rate or high unemployment?

Answer 1

minimum wage is good to an economy as wage increases employment decrease. As wage decrease employment also increases. For example in a construction their is a necessary of large workers, but their wage is low, they didn't have a job recruitment or selection with having degree or other qualification. They only require capablity and skill to do work. Labor monopsony simply means demand of company or employees to accommodate employers for work demanded by the company. No ,minimum wage would increase workers and can increase labor, this affect profit loss to the buyer of labor. Lower participation rate or higher unemployment depends on several characteristics such as demand, increased labor, education qualification, automation in industries etc are the common