What Is The History Of Minimum Wage

What Is Minimum Wagewhat Is The History Of Minimum Wagewhat Are The

What is minimum wage? What is the history of minimum wage? What are the economic effects of minimum wage? Do you believe minimum wage should be increased? Explain from an economic way of thinking what would happen if minimum wage increase. A graph could help illustrate your explanation. Integrated throughout the entire paper the SLU core value that you believe fits this topic. A minimum of 3 reference are required. One can be the required textbook for the course.

Paper For Above instruction

The concept of minimum wage refers to the legally mandated lowest remuneration that employers can pay their workers for labor. Its primary goal is to ensure a basic standard of living for all employees and reduce income inequality. The history of minimum wage varies across countries, but in many, it was introduced during the 20th century as part of broader labor reforms. For example, the United States established its first minimum wage law in 1938 with the Fair Labor Standards Act, aiming to protect workers from exploitation during the Great Depression.

Economically, the implementation of a minimum wage has several effects. It can improve the standard of living for low-income workers, reduce poverty, and stimulate consumption, which in turn can boost economic growth. However, critics argue that setting a minimum wage above the equilibrium wage may lead to higher unemployment, as employers may reduce hiring or replace workers with automation. Additionally, increased labor costs might result in higher prices for goods and services, potentially leading to inflationary pressures.

From an economic perspective, increasing the minimum wage can have both positive and negative effects. A higher minimum wage can increase workers' purchasing power, leading to greater demand in the economy. Conversely, if set too high, it may cause a decrease in employment opportunities, especially for less-skilled workers or those in sectors with thin profit margins. Graphically, this can be represented by a standard supply and demand curve for labor, where the minimum wage is set above the equilibrium wage, creating a surplus of labor – unemployment.

Applying the SLU core value of integrity, it is important to consider the ethical implications of wage policies that balance fair compensation with economic sustainability. While fair wages uphold integrity and fairness in the labor market, excessive increases may threaten the viability of small businesses and overall employment levels, challenging the sustainability of economic growth.

In conclusion, the minimum wage is a complex policy tool with significant economic effects. Its impact depends on the level at which it is set relative to the equilibrium wage, and its effects must be considered carefully to promote both fairness and economic efficiency.

References

• Card, D., & Krueger, A. B. (1995). Myth and measurement: The impact of the minimum wage on employment. The American Economic Review, 85(2), 232-237.
• Mankiw, N. G. (2020). Principles of Economics (9th ed.). Cengage Learning.
• Neumark, D., & Wascher, W. (2008). Minimum wages. MIT Press.
• Schmitt, J. (2013). Why does the minimum wage have no discernible effect on employment? Center for Economic and Policy Research.
• Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. Methuen & Co. Ltd.