Question

Describe the impact of minimum wage on the labor market. Do you agree or disagree with minimum wage? Why?

Answer 1

Minimum wage reduces employment since it is set above market clearing wage. But it raises wages of labour. Given that welfare is measured by money, it means that welfare of employed labour's will rise. The welfare of those who are rendered unemployed reduces. I agree with minimum wage because labour has to be protected from exploitation. No body talks about technology used by capitalists increasing unemployment. But when it comes to minimum wage everybody cries that it will create unemployment. I think this is a unethical