This essay aims to distinguish the correlation between minimum wage and employment rates, from the causal effect of minimum wage on employment. Assumptions of three different theoretic models of labor are analized to discover the economic effects of minimum wage fixation…
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On the other hand, the efficiency wage model of labor observes that increasing the wages for the workers will motivate them to work even harder, while increasing their fear of losing their jobs which are well paying (Ehrenberg and Smith, 94). This boosts the morale of the workers and make them highly motivated while undertaking their duties, an aspect that increases their productivity, and by extension, the productivity of the firm and the whole industry. This way, more employment is created, since improved productivity comes with increased opportunities (Ehrenberg and Smith, 378). Thus, according to the efficiency wage model, fixing the minimum wage, to a level higher than the competitive wage level, will promote productivity and discourage labor turnover, thus increase employment. Therefore, assuming the employment will continue rising as it has happened since June 2009, the empirical researchers need to face the following issues, to distinguish the correlation between minimum wage and employment rates, from the causal effect of minimum wage on employment. First, the empirical researchers should understand the issue of market operations, whereby different types of markets will give different results, when it comes to the relationship between minimum wage and employment. For example, an open competitive market will give different results, compared to a monopsony market, when it comes to the correlation between minimum wage and employment (Ehrenberg and Smith, 112). Secondly, the researchers need to understand the nature of the movement of the wages and the maximum level attainable in minimum wage fixation, before the correlation between the minimum wage and the employment changes from...
This essay critically review the impacts of the introduction of the theoretic concept of minimum wage fixation into the real economy. This concept has had double impacts on employment and the economy at large. While the main idea behind fixing minimum wage that workers should be paid is to make the lives of the workers better, through affording them a substantial income, it may affect the same workers, especially those with low skills negatively
According to the standard competitive model of labor, fixing a minimum wage has the impact of increasing unemployment, through he creation of involuntary unemployment, where individuals can continuously apply concerted efforts o seek for a job but find none
The case is different according to the Monopsony model of labor, which holds that the fixation of minimum wages has the effect of increasing employment, most especially when the wage is being increased from levels lower than the competitive wage, to reach the competitive wage levels
On the other hand, the efficiency wage model of labor observes that increasing the wages for the workers will motivate them to work even harder, while increasing their fear of losing their jobs which are well paying
The minimum wage can only go high, up to the competitive wage level, after which it will start having negative impacts. An increase in wage level from levels lower than the competitive levels has the impact of boosting the morale of the workers and increasing their levels of motivation, thus increasing their productivity, and consequently that of the firms
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At first sight minimum wage seems to be helping the employees; however there are many controversies associated with minimum wage. Proponents argue that minimum wage would prevent employers from exploiting the employees and it will help the employees to reduce their poverty level and increase their living standards.
From a microeconomics perspective, there is enough supporting evidence that minimum wage increases maintain negative outcomes to the economy. In similar accord, thinking from a macro perspective, minimum wage increases create similar negative economic conditions.
Even when the idea was introduced it won an 88% majority endorsement in the UK. (Jowell 2000). This essay will concentrate on the effects of an established minimum wage on women in particular.
This minimum wage rate applies to part-time workers, casual workers, agency workers and home workers.
Almost all the countries in the world have similar kind of minimum wage laws and legislation.
Minimum wage legislation may be interpreted as making it either unlawful for employers to pay workers less than the minimum wage, or unlawful for workers to provide labor or services for less than the minimum.
In that respect it used to stand out from other European countries. France, the Netherlands, Luxembourg, Spain and Portugal have national minimum wages set by the government. The Scandinavian countries along with Belgium and Greece have a national minimum wage set by collective bargaining.
As such, individuals operating such daycare centers face diverse challenges and they ought to overcome them, in a bid to run their affairs smoothly. Such challenges include funding and space. This manuscript will mull over
The minimum wage has been at a constant level of $7.25 an hour for a long time, which necessitates a need for review. It is noteworthy that employees who earn the minimum wage are usually teenagers and young adults trying to kick-start their
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