Should There Be a Minimum Wage?

Authors Avatar

Should There Be A Minimum Wage?

        The wage rate in an industry is determined by the cross over point of the demand for labour for that industry and the supply of labour for that industry.  The diagram below shows that with supply (S) and demand (D), the equilibrium wage rate is OW and the equilibrium number of workers supplied and demanded is ON.

Now I will list a few arguments for each side of the argument.  For and Against a minimum wage.

For

        The minimum wage is there to elevate the earning of people on low incomes and help to get them out of poverty and back into emplyoment.  This is the main and best reason why people support a minimum wage and is the hardest to argue against.  There is very little you can do to justify paying someone such a small fee per hour, no matter how basic menial and easy the task may be.

Join now!

        By making wages higher you are helping to increase the incentive to work.  Before the minimum wage came along, lots of people were not interested in getting off of benefits back and into employment simply because they would be going into badly paid jobs which didn't really have enough of an incentive to make them want to be coming off of benefits.  This is called voluntary unemployemnt.  Obviously by making a minimum wage which is more than benefits, you are making it worthwhile for people to actually go out and look for a job so they can have a higher ...

This is a preview of the whole essay