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There are probably as many people who strongly support price control (such as the minimum wage...

There are probably as many people who strongly support price control (such as the minimum wage legislature) as there are people who strongly oppose it. The debate on the gains or and costs of government interference with the market mechanism is one of the most rigorous in economic policy discussions. Pick a side and share your convictions. Your post must be at least 5 complete sentences.

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Answer #1

The price control such as minimum wage legislation is a type of price floor. In this case, the government usually sets the minimum wage which is above the equilibrium wage which causes a shortage.

This policy should not be done as due to minimum wage policy, the firms would be willing to demand fewer workers so as to decrease their cost of production and will mostly hire highly skilled labor force and automate the process which is usually handled by the unskilled labor force. This will result in loss of jobs, inequality of income and lowering the standard of living for a large workforce who would be unable to find jobs elsewhere and this will also increase the cost to the government as it will have to provide more welfare schemes to these people which will be financed by increasing the taxes. So, a minimum wage would not increase the standard of living or per capita GDP of the citizens.

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