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Is minimum wage justified? Give evidence to support answer.

Is minimum wage justified? Give evidence to support answer.

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Minimum wage is justified theoretically on the ground that it leds to increase in living standards.. But theoretically it may led to more supply of labour than demand. In other words it may led to unemployment. Empirical evidence supports this view.eg David Newmark and William wascher in their paper minimum wages and employment :A review of evidence from new minimum wage research came to the conclusion that a sizeable around of studies surveyed indicated negative relationship between minimum wages and employment. Hardly any studied showed positive relationship. Grace Lord an and David neumark studied 35 years of govt census data and came to conclusion that it leds to more automation.

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