What are your thoughts about minimum wage legislation? What kind of a price-control policy is this? Who gains? Who loses? Are there alternatives to this legislation for achieving the same policy objectives? What role do demand and supply elasticities play in determining outcomes?
ELASTICITY AND THE MINIMUM WAGE
Minimum wage legislation
This is a law or a body of laws imposed on employers, not allowing them to hire or compensate workers lower than the hourly, weekly, or monthly wage rate set by the government.
As a price-control policy
The price of a worker is basically his salary or his wage. Hence, when a worker is priced high, he is said to be getting a high salary. A low-priced worker is given a low salary or wage by his employer. The minimum wage legislation may be considered as a price control measure because it is basically controlling the price or wage of a worker. It is essentially a floor price because the wage to be given should not be lower than the rate set by the government. It is basically controlling the attempt of an employer to under price a worker by giving a considerably low wage.
Minimum wage legislation is normally a product of an extensive study of the basic needs of a worker, effects on employers, and implications on the economy as a whole. It is supposed to be a solution to an economic problem, not a ...
Elasticity and the minimum wage are examined. The alternatives to this legislation are given.